pository of the public moneys. To these charges, the House of Representatives, in which the administration had a very large majority on other matters, replied, by a vote of 110 to 46, that the public moneys were safe in the Bank; and by a vote of 106 to 84 extending its charter for twenty years. The Senate concurred in the last measure by a vote of 28 to 20. It was promptly vetoed by the President. neces As the re-election of General Jackson, with a largely increased majority of the House in his favor, for a second term, which would not expire until after the termination of the charter of the Bank, precluded all expectation of its renewal, the necessity of filling up the vacuum which was so soon to be created by the withdrawal of $35,000,000 of banking capital, of $21,355,724 of notes, and $22,671,431 of deposits, making a total circulation of $44,027,155,— equalling fully one-third of the amount of that of all the Banks in the country, sarily attracted the attention of the legislatures of the several States. It was natural that each one should feel called upon to make provision for a portion of the capital and circulation that were so soon to be withdrawn. In this way, without perception of its process, a sentiment in favor of the creation of Banks got hold of the community, a sentiment of all others the most to be dreaded, for the reason that their creation to supply an anticipated deficiency of the currency, and not for the purpose of loaning capital, is always attended by the most disastrous consequences. After a people have for a long time been habituated to a sound currency, they are in a condition most favorable for the imposition of an unsound one. The precedents of the past are accepted as a guide for the present, so that adventurers who in such a state of the public mind can obtain authority for the issue of paper money are likely to reap a rich harvest. The currency, from 1826 to 1830, whether furnished by the National or State institutions, had suffered so few fluctuations that its value was assumed as a matter of course. In 1830, there were 329 Banks, including the National one, in operation in the country, having a share capital equalling $145,192,268. Their note circulation, at the time, equalled $61,328,898; their deposits, $55,559,928: making a total circulation of $116,888,826. The number of Banks in the United States on the 1st of January, 1820, equalled 307; their share capital $137,110,641; their note circulation, $44,863,344; their deposits, $35,950,479: making a total circulation of $80,813,823. The rate of increase of the number of Banks in the ten years equalled 7 per cent; that of their capital, 6 per cent; that of their circulation, including notes and deposits, 47 per cent. The rate of increase of the circulation undoubtedly corresponded very nearly to that of the production and trade of the country. It is a significant fact in favor of the general soundness, that this increase was not accompanied by any considerable increase in the number of Banks, or in the amount of their nominal capital. The increased demand for money was met by the existing institutions, by an increase of their reserves. So long as this is the case, the money market will always be in great measure free from disturbance. Those who supply the banking accommodations, so long as they are not distracted or interfered with by any new or hostile elements, will always proportion their operations to their means. Their nominal may have no relation whatever to their available capital. The rapid creation of new Banks is always followed by great monetary disturbances, for the reason that their issues do not proceed regularly and normally, bearing a proper relation to the wants of the public, but to the real or fancied interests of those who control them. There are no means of ascertaining the rate of increase of the number, capital, and operations of the Banks from Jan. 1, 1830, to Jan. 1, 1834. We are indebted to Mr. Gallatin's "Considerations on the Currency" for their number, capital, and circulation, at the former date. His estimates, which were made with great care, are probably very near the mark. In 1832, Congress directed the Secretary of the Treasury to procure and publish, annually, statements of the number of Banks in each State, with the amount of their capital, and of the nature and extent of their operations. The returns first obtained and published were those which represented their number and condition on the 1st of January, 1834. Since that time, similar statements have been annually made. At the date last named, the number of Banks in operation equalled 506, against 329 on the 1st day of January, 1830,-the time that General Jackson began his attack upon the United States Bank, and his "experiments for the reformation of the cur rency." The rate of increase in their number during the four years equalled 53 per cent. The amount of their capital increased, in the same time, from $145,192,268 to $200,005,944, or at the rate of 37.7 per cent. Their circulation increased from $61,328,878 to $94,839,570, or at the rate of 54.6; their deposits, from $55,559,928 to $75,666,986, or at the rate of 36.2 per cent. The increase of their circulation, including notes and deposits, equalled 45.2 per cent. The preceding statements show the magnitude of the inflation which had taken place so early as Jan. 1, 1834. The period from 1830 to 1834 was distinguished by no remarkable advance in the industries or commerce of the country. It is not probable that any greater rate was required from 1830 to 1834 than from 1820 to 1830. At the rate of increase during the latter period, the number of Banks which would have been in operation on the 1st day of January, 1834, would have been 338; their share capital, $151,190,380; their note circulation, $70,330,348; their deposits, $63,404,856. The excess of increase in the number of the Banks equalled 168; of their capital, $48,815,664; of their note circulation, $24,509,222; of their deposits, $12,262,130. It will be seen that the excess of circulation was in great part made up of notes. The inflation must in a great measure have been caused by new Banks, which were set on foot mostly in small towns. The circulation of such necessarily consisted of notes. The inflation, which began so soon as it was seen that the attack upon the Bank might succeed, became excessive in the early part of 1833. It was then in a condition to be greatly affected by any untoward event. This speedily came, in October of that year, in the order for the removal of the public moneys then held by the Bank, on deposit, to the amount of about $10,000,000. The transfer at that time of so large a sum from one institution to others could not have taken place without creating great disturbance, even had the act been a perfectly legal and proper one. As it was considered highly revolutionary as well as injurious, a great shock was given to public confidence, and great monetary stringency was the necessary result. People did not dare to lend, or Banks to discount, till matters assumed a more satisfactory shape. The act was strongly opposed by the best men of the President's own party. Both Mr. Van Buren and Mr. Wright believed it was ill-advised, and doubted its legality. Mr. Duane, then Secretary of the Treasury, refused to execute the order of the President. He was removed, and his place filled by a more supple tool, who was in time further rewarded for his servility, by being made Chief Justice of the Supreme Court of the United States. This appointment was undoubtedly made in view of the reversal, should occasion offer, of the decisions of Judge Marshall affirming the constitutionality of the Bank; and of the establishment, by judicial authority, of the doctrines of Mr. Jefferson as to the nature of our government. As great distress everywhere followed the removal of the deposits, delegation after delegation, representing the various interests of the country, waited upon the President, to state their condition, and solicit his favorable action. moval was his act, the distress complained of was in a measure charged upon him; and as he was influenced in all he had done by no higher motive than to gratify an old pique, or to revenge himself upon the Bank for having stood in the way of rewarding his partisans,' he could not conceive these delegations to 1 To find places for the hungry crew that followed in his train, General Jackson, soon after his accession, sought to procure the removal of Mr. Jeremiah Mason from the presidency of the branch Bank at Portsmouth, New Hampshire. The charges made against Mr. Mason were that "small and safe loans had been refused to business men in Portsmouth, while at the same time large sums were located out of the State at greater risks." These charges were examined into by the parent Bank, and found to be utterly groundless. The evidence seemed entirely satisfactory to the Secretary of the Treasury. Not so to General Jackson he was determined upon revenge. Mason was an "old Federalist," for whom Isaac Hill, a famous New Hampshire politician holding an important office under government, and one of General Jackson's most trusted advisers, entertained the greatest hatred. He inflamed the mind of the President with artful representations that the action of the Bank in this matter was evidence of a great combination of capitalists, headed by the Bank, in opposition to him: : "That the reader," says Parton, " may see the movements of this gentleman,” [Isaac Hill] "as they appeared to General Jackson, and that he may fully understand the process by which the administration were brought into collision with the parent Bank, I will present here a brief condensation of the papers and letters relating to the Portsmouth affair, in the order in which they were produced. The correspondence began in June, and ended in October. I believe myself warranted in the positive assertion, that this correspondence relating to the desired removal of Jeremiah Mason was the direct and real cause of the destruction of the Bank. If the Bank had been complaisant enough to remove a faithful servant, General Jackson, I am convinced, would never have opposed the rechartering of the institution." — Life of General Jackson, by James Parton, vol. iii. p. 260. An earlier affront, undoubtedly, still rankled in General Jackson's bosom: "An incident," to quote further from Parton, "occurred during the stay of General Jackson at New Orleans, which was afterwards supposed to have made be governed by any higher motives than his own. He regarded all presentations of the conditions of the country as insults to himself, and was prompt to repay them in kind. Among the delegations was one representing the bankers and merchants of New York, having upon it six thousand names, asking that the deposits might be restored. This delegation was headed by Mr. James G. King, of New York, a man of the highest respectability and character, and of stately manners; whose consequence was not a little increased by being a son of the celebrated Rufus King, — one of the most honored in the catalogue of our great names. The following description of the reception with which this delegation met is taken from Parton's Life of Jackson: - "The adventures of one of these deputations, a friendly informant, who witnessed their interview with the President, enables me to relate. The petition of the New York merchants, bearing six thousand signatures, was intrusted to the care of a deputation of great bankers and great merchants, headed by Mr. James G. King. When these worthy gentlemen entered the office of the President, at the White House, they discovered him seated at a table writing, with a long pipe in his mouth, which rested on the table, and revealed the intensity of the President's interest in his work by the volumes of smoke which gushed from its blackened bowl. "Excuse me a moment, gentlemen,' said the President, half rising, and bowing to the group. Have the goodness to be seated.' "In a few minutes he pushed back his paper, rose, and said, "Now, gentlemen, what is your pleasure with me?' "The members of the deputation were introduced to the President by the gentleman whose recollections of the scene I am now recording. Mr. King then began, in his usual deliberate and dig a lasting impression upon his mind, and to have been a remote cause of important events. He came into collision with the Bank of the United States. Desiring to take with him to Florida a sum of money, with which to defray the first expenses of organizing his government, he sent an aid-de-camp to the branch of the United States Bank at New Orleans to learn whether the Bank would advance ten or fifteen thousand dollars on a draft to be drawn by General Jackson upon the Department of State. The messenger returned with the reply, that the branch Bank had no authority to advance money upon drafts. The mother Bank, said the cashier, had expressly forbidden him to negotiate drafts. The aide-de-camp remonstrated, and pointed out the inconvenience that might result from the refusal; but the cashier was immovable, as he was bound to be." - Life of Andrew Jackson, vol. ii. p. 596. Such were the causes, or rather the occasion, which led to General Jackson's famous war upon the Bank of the United States, which aroused the fiercest personal and political animosities, and which was so disastrous in its consequences to the whole nation. It could never have become such a potent element of strife, but from its relation to the great questions which concerned the nature and powers of the central government. |