Without assuming that a corrupt use would be made of this new species of government patronage, a very slight acquaintance with the practice of all political parties, whatever may be their professions, will be sufficient to satisfy any reflecting mind, that all the evil consequences of corruption would flow from its exercise. Have not our political contests too frequently degenerated into a selfish scramble for the offices of the country? Are there not those who sincerely and honestly believe that these offices are legitimate objects of political warfare, and the rightful reward of the victorious party? And disinterested and patriotic as the great body of every political party is admitted to be, the fact is no less true than it is lamentable, that the most devoted and active partizans are very often mere soldiers of fortune, who watch the political signs, and enlist, at the eleventh hour, under the banners of the party most likely to prove successful. Such being, more or less, the composition of all political parties, what would be the probable use made of fifty millions of bank patronage, by a political party which conscientiously held the doctrine that all the offices in the gift of the executive should be divided among the partizans of a successful political leader? Would not the same principle be even more applicable to bank loans? and would not the Treasury of the United States, under the sanctifying influence of party delusion and party infatuation, be literally plundered, by mercenary retainers, bankrupts in fortune, and adventurers in politics. Even if the administration should be ever so much disposed to restrain the abuse of this patronage, it would be utterly impracticable to exercise any efficient control over the great number of bank directors who would be scattered over the Union, and who, upon all the known principles of human nature, it may be confidently predicted, would principally consist of busy and officious political partizans Such would be the depositaries-acting, not under the public eye, but under the protecting mystery of a sort of concealment and secrecy deemed indispensable in banking operations-to whom not only the whole Treasury of the Union would be confided, to be squandered, perhaps, in profligate favouritism, but the tremendous power of putting the whole property of the nation under mortgage; for the redemption of the bills issued at their discretion. To say nothing of the utter insecurity of the public revenues under such a system, a new species of legislative power, unknown to the Constitution, would be committed to these irresponsible bank directors, of which no human sagacity can predict the consequences. the citizens of the country, would be fraught with the most pernicious consequences. In the first place, it is a business to which, in the very nature of things, no Government is adapted, and, least of all,a popular Government. There is no employment of capital that requires a more vigilant and skilful superintendence. Nothing but the ever active motive of individual interest can supply the watchfulness necessary to secure a banking institution against the grossest frauds and impositions. In pecuniary transactions, few men are to be found who will serve others, in cases involving the exercise of discretionary power, with the same fidelity that they would serve themselves; and, when we consider the strong motives, both of private friendship and political attachment, which would operate on the directors of a Government bank, to bestow its favours without impartiality or prudence, it requires but little sagacity to foresee that enormous losses would be annually sustained by the insolvency of the Govt.debtors. All Governments have found it expedient to place the public Treasury under the guardianship of a high and confidential officer, aided, in the enforcement of a rigid responsibility, by a system of checks and counterchecks, operating upon all the subordinate officers concerned in collecting and disbursing the public revenue. Such is our own system. No discretion is vested in the chief officer of the Treasury, much less in those that are subordinate, in the appropriation of a single dollar of the public money. "No money can be drawn from the Treasury but in consequence of appropriations made by law." How far these wise and provident safeguards, and this constitutional barrier, would be prostrated by placing not only the public revenue, but the public credit, at the disposal of some hundreds of bank directors in various parts of the Union, is a very grave question for the consideration of the House. Our own experience has demonstrated the great danger of having large masses of the community indebted to the government. It was a deep conviction of this danger that induced Congress to abolish the system of credit sales in the disposition of public lands. Congress has been compelled to yield to the pressing importunities of the purchasers of these lands, by granting them not only repeated indulgencies, but by remitting some millions of the debt. What, then, would be the situation of the government, with a debt of fifty millions diffused throughout the country, and due to it from the most active, enterprising, and influential classes of the community? Nothing that has not happened can be more certain, than that every unfavorable vicissitude in trade, every period of commercial distress and embar A just analysis of the operation of granting loans by rassment, would give rise to importunate and clamorous this government bank, in exchange for the notes of pri- calls for indulgence, and for an injudicious extension of vate individuals, will show that it involves the exercise, discounts, which no administration would have the firmon the part of the directors, of the two fold power of ness to resist. Every one who has witnessed the urgenappropriating the public revenue in the most danger-cy and unanimity with which the representatives of the ous of all forms-discretionary loans-and of pledging states, indebted for public lands, have pressed the the responsibility of the Government to an unlimited ex- claims of their citizens for indulgence and remission, tent, for the payment of the debts at the same time crea- must be satisfied, that, if the citizens of all the states ted against it. These are among the highest functions should become indebted much more largely for bank of legislative power, and have been expressly and ex- loans, the government would have scarcely any faculty clusively vested in Congress. Unless, therefore, it be of resistance, when appeals for indulgence should come assumed, that Congress may rightfully transfer the pow- from all quarters of the Union, sustained by the strong ers with which it is invested to these bank directors, it plea of public distress and embarrasment. will be difficult to find any warrant, either in the letter The policy of extending indulgence to the public or spirit of the Constitution, for the creation of this tre- debtors, and of granting more liberal loans to the commendous engine of pecuniary influence. It may, in-munity, would, in the natural course of things, become deed, be doubted, whether all the branches of the legislative authority united, have any constitutional power to lend the public revenue, either to individuals, corporations or states, without reference to the objects to which it shall be applied. But, whatever may be the power of Congress on this subject, it appears to the committee to be inexpedient, in every view of the question, that the Government should be converted into a great money lender. There is no species of trade in which it would be wise for the Government to embark; but of all the variety of pursuits known to human enterprise, that of lending money by the Government to the favourite theme of those who aspired to popular favour. Political parties would come to be divided upon the question of observing towards the public debtors a strict banking policy, indispensable to the maintenance of specie payments, on the one hand, or a liberal government policy, necessarily involving a suspension of specie payments, on the other. And when it is considered that the whole class of debtors, always the most numerous and active portion of the communitv, would be naturally in favor of increasing bank issues, & extending bank indulgences, it can scarcely be doubted that specie payments would be suspended in the first 1830.] BANK OF THE UNITED STATES. great pecuniary exigency, growing out of the embarrass ments in our commerce, or deficiencies in our revenue. The government, therefore, which is under the most sacred obligations to constrain all the banks to maintain specie payments, with a view to the uniformity and soundness of the currency, would, by its own example, perpetuate the great national evil of a fluctuating and depreciated circulating medium. 307 for merchandize, Without the transportation of a single piece of coin, Lexington draws on Charleston, and remits the check to Philadelphia, in payment of her debt there; which operation adjusts the balance between the three points of the tri-angle almost without expense or trouble. Could such facilities be obtained froin any other than an institution having branches in different parts of the Union, acting as co-partners in one concern? Local banks, whatever might be their willingness, could not accommodate in the same manner, and to a like extent." * a seller of exchange at fixed and low rates, and thus prevents extortion by private dealers." "Before this bank went into operation, exchange was from eight to ten per cent. either for or against Charleston, which was a loss to the planter to that amount on all the produce of Georgia and South Carolina, and indeed you might say, all the produce of the southern and western states." * * These evils, which would be so highly probable in time of peace, would be almost certain in the event of war. The temptation to supply the Federal Treasury by the easy process of bank issues, rather than resort to "The discounting of bills on the low terms established the unpopular process of internal taxation, would be too by the branch bank at this place, is a great benefit to the fascinating to be resisted. We should thus experience, agricultural interest, particularly in enhancing the price what every nation has experienced in like circumstan- of cotton and rice; and were the bank to stop its operaces, the manifold evils of a mere paper currency, having tions, there is no saying how far these staples would be no relation to any standard of intrinsic value. In these depressed. The private dealers in exchange would views the committee are fully sustained by the opinion take the place of the bank in that business, and their of Mr. Lowndes, expressed in 1819. These are his profits on bills would be taken out of the pockets of the words "That the destruction of the (United States) planters, as the merchants would always regulate the Bank would be followed by the establishment of paper price they would give for an agricultural production, by money, he firmly believed; he might almost say, he the high or low rates at which they could negociate knew. It was an extremity from which the house would their bills. On account of its connexion with all parts recoil, if now proposed; but if the resolutions on the of the Union, the bank affords this important advantable were passed, it would very soon be proposed.—tage to the public: it is always a purchaser and always The subject was too large for an incidental discussion. Gentlemen thought the amount of government paper might be limited, & depreciation prevented, by the rate of interest which should be exacted. Inadequate every where, the security was particularly ineffectual inthe U.S.' But the inevitable tendency of a government bank to involve the country in a paper system, is not, in the opinion of the committee, the greatest objection to it. The powerful, and in the hands of a bad administration, the "If the Bank of the United States were destroyed,the irresistible and corrupting influence which it would ex-local banks would again issue their paper to an excessive ercise over the elections of the country, constitutes an amount; and while a few adventurous speculators would objection more imposing than all others united. No be much benefitted by such an issue, the honest and matter by what means an administration might get into unsuspecting citizens of our country would finally be power, with such a tremendous engine in their hands, the losers. If we look back to what took place in New it would be almost impossible to displace them without York, Pennsylvania, the western states, and even in our some miraculous interposition of Providence. own state, we shall see the grossest impositions comDeeply impressed with the conviction, that the weak mitted by banks, commencing with a few thousand dol point of a free government is the absorbing tendency of lars in specie, buying up newspapers to puff them as executive patronage, and sincerely believing that the specie-paying banks, in order to delude the public,and, proposed bank would invest that branch of the govern- after getting their bills in circulation, blowing up, and ment with a weight of monied influence more danger-leaving the unsuspecting planter and farmer victims of a ous in its character, and more powerful in its operation, fraud, by which they were deprived of the hard earnthan the entire mass of its present patronage, the com-ings of years of honest industry. But, sir, I believe the mittee have felt that they were imperiously called upon, by the highest considerations of public duty, to express the views they have presented, with a frankness and freedom demanded by the occasion. It is, at the same time due to their own feelings, that they should state unequivocally their conviction, that the suggestion of the Chief Magistrate, which they have thus freely examined, proceeded from motives of the most disinterested patriotism, and was exclusively designed to promote the welfare of the country. This is not the mere formal and heartless homage, sometimes offered up to official station, either from courtesy or interest, but a tribute which is eminently due, and cheerfully rendered, to the exalted character of the distinguished individual on whom it is bestowed. Extract of a letter from an intelligent merchant in Charleston, to the Chairman of the Committee of W. and M. on U. S. Bank. bank owes a great deal of the opposition which exists, & has existed, to the fact that it has put down these fraudulent institutions, got up by combinations and conspir acies of speculators; and who, after receiving large div idends, managed to destroy the credit of their own paper, and, by the agency of brokers, bought it up at half its nominal value. "Since I last wrote you, I had a conversation with a gentleman in the confidence of some of the monied men of the north, and he says they are determined to break up the United States' Bank, to enable them to use their money to advantage; as that institution gives so many facilities to the community, as to deprive them of their former profits." "There is another consideration-the distress would be immense, which a refusal to renew the charter would produce among those who are indebted to the institu tion: for I find that to this branch, the planters owe upwards of a million of dollars; and I have no hesitation in saying as safe a debt as is owing to any bank in the Union. But if the bank should wind up its affairs, these "This effect of diminishing the vast difference of exchange between the various points of the country, was evidently produced by the bank. The advantages produced by this institution, in the intercourse between the western and the Atlantic states, can be duly appre-planters could not get credit from other institutions; and ciated only by one who secs, passing before him, the actual operation of the system of exchange it has created. For example-Lexington, in Kentucky, annually accumulates a large surplus of funds to her credit in Charleston, derived froni the sale of horses, hogs, and other live stock, driven to that as well as to other southern markets by her citizens. Philadelphia is indebted to Charleston for exchange remitted, dividends on bank stock, &c, and Lexington is indebted to Philadelphia as the bank can sue in the United States' Court, where judgment is obtained almost at once, property would be greatly depressed, and monied men would buy it up for half its value. Throughout the Union all classes would suffer, except those who should up their money to go into the brokerage business, or buy property at a sacrifice. If I were sure the bank would not be re-chartered, I would convert my property into money, with a view to dealing in exchange. I could make a vast fortune by it." Boston. APPENDIX No. 1.-PRICE CURRENT exhibiting a comparative view New York. 7 adv par 12a14a 20a22a dis New York " 7a 8-dis dis a par par 83a9ad Philadelphia" 17a18 dis Pennsylv'a" 15a16a par do 2 adv 11 dis par Baltimore "19a20 d disa par 20a21 dis dis a par 44" 6a7 ad par par 2 ad par Maryland Virginia 66 Dis. Columb." 10" dis APPENDIX, No. 2.-RATES OF EXCHANGE at which Draughts are sold and Domestic Bills par a H 1830.] BANK OF THE UNITED STATES, 309 of the relative value of Bank Notes in 1816 and in 1829 at various places. Norfolk. 1816 Charleston. Savannah. New Orleans. Louisville. Lexington. Cincinnati Pittsburgh.f 1829 1816 1829 1816 1829 1816 1829 1816 1829 1816 1829 18161829 1816 1829] July 1. Dec.5. July 1. Dec.5. July 1. Dec.5. July 1. Dec. 1. July 1. Dc.5 July 1. Dec. 5. Jul.1 Dc.5 July 1. Dc.5 par Bills Drafts Bills purc'd sold. purc'd par apar par apar purchased or collected, by the Bank of the United States and its Offices of Discount and Deposite, Norfolk. Fayetteville. Charleston Drafts Bills Drafts Bills sold. purc'd sold. pu'd |