BANK OF THE UNITED STATES.*

MR. PRESIDENT, though I am entirely satisfied with the general view taken by the chairman of the committee,† and with his explanation of the details of the bill, yet there are a few topics upon which I desire to offer some remarks; and if no other gentleman wishes at present to address the Senate, I will avail myself of this opportunity.

A considerable portion of the active part of life has elapsed, since you and I, Mr. President, and three or four other gentlemen, now in the Senate, acted our respective parts in the passage of the bill creating the present Bank of the United States. We have lived to little purpose, as public men, if the experience of this period has not enlightened our judgments, and enabled us to revise our opinions, and to correct any errors into which we may have fallen, if such errors there were, either in regard to the general utility of a national bank, or the details of its constitution. I trust it will not be unbecoming the occasion, if I allude to your own important agency in that transaction. The bill incorporating the bank, and giving it a constitution, proceeded from a committee in the House of Representatives, of which you were chairman, and was conducted through that House under your distinguished lead. Having recently looked back to the proceedings of that day, I must be permitted to say, that I have perused the speech by which the subject was introduced to the consideration of the House, with a revival of the feeling of approbation and pleasure with which I heard it; and I will add, that it would not, perhaps, now be easy to find a better brief

A Speech delivered in the Senate on the 25th of May, 1832, on the Bill for renewing the Charter of the Bank of the United States.

+ Mr. Dallas.

Mr. Calhoun, at that time Vice-President of the United States.

synopsis than that speech contains, of those principles of currency and of banking, which, since they spring from the nature of money and of commerce, must be essentially the same at all times, in all commercial communities. The other gentlemen now with us in the Senate, all of them, I believe, concurred with the chairman of the committee, and voted for the bill. My own vote was against it. This is a matter of little importance; but it is connected with other circumstances, to which I will for a moment advert. The gentlemen with whom I acted on that occasion had no doubts of the constitutional power of Congress to establish a national bank; nor had we any doubts of the general utility of an institution of that kind. We had, indeed, most of us, voted for a bank, at a preceding session. But the object of our regard was not whatever might be called a bank. We required that it should be established on certain principles, which alone we deemed safe and useful, made subject to certain fixed liabilities, and so guarded, that it could neither move voluntarily, nor be moved by others, out of its proper sphere of action. The bill, when first introduced, contained features to which we should never have assented, and we accordingly set ourselves to work, with a good deal of zeal, in order to effect sundry amendments. In some of these proposed amendments, the chairman, and those who acted with him, finally concurred. Others they opposed. The result was, that several most important amendments, as I thought, prevailed. But there still remained, in my opinion, objections to the bill, which justified a persevering opposition, till they should be removed.

The first objection was to the magnitude of the capital. In its original form, the bill provided for a capital of thirty-five millions, with a power in Congress to increase it to fifty millions. This latter provision was struck out on the motion of a very intelligent gentleman from New York, and I believe, Sir, with your assent. But I was of opinion that a capital of thirty-five millions was more than was called for by the circumstances of the country. The capital of the first bank was but ten millions; and it had not been shown to be too small; and there certainly was no good ground to say, that the business or the wants of the country had grown, in the mean time, in the proportion of

* Mr. Cady.

thirty-five to ten. But the state of things has now become changed. A greatly increased population, and a greatly extended commercial activity, especially in the West and Southwest, evidently require an enlarged capacity in the national bank. The capital, therefore, is less disproportionate to the occasion than it was sixteen years ago; and whatever of disproportion may be thought still to exist will be constantly decreasing. The augmentation of banking capital in State institutions is by no means a reason for reducing the capital of this bank. At first view, there might appear to be some reason in such a suggestion; but I think further reflection on the duties expected to be performed by the bank, in relation to the general currency of the country, will show that suggestion not to be well founded. On the whole, I am disposed to continue the capital as it is.

There was another objection. The bill had divided the stock into shares of one hundred dollars each, not of four hundred dollars each, as in the first bank; and it had established such a scale of voting by the stockholders, as showed it to be quite practicable for a minority in interest to control all elections, and to seize on the entire direction of the bank. It was on this very ground, and under the apprehension of this very evil, that the last attempt to amend the bill, made by me, proceeded. That attempt was a motion to diminish the number of shares, by raising the amount of each from one hundred dollars to four hundred.

There was yet one other provision of the bill, which was regarded as unnecessary and objectionable. That was, the power reserved to the government of appointing five of the directors. We had no experience of our own of the effect of such government interference in the direction of the bank; and in other countries it had been found that such connection between government and banking institutions produced nothing but evil. The credit of banks has generally been very much in proportion to their independence of government control. While acting on true commercial principles, they are useful both to government and people; but the history of the principal moneyed institutions of Europe has demonstrated, that their efficiency and stability consist very much in their freedom from all subjection to State interests and State necessities. The real safety to the

public lies in the restraints and liabilities imposed by law, and in the interest which the proprietors themselves have in a judicious management of the affairs of the corporation. I will only say, on this part of the subject, that it is unquestionably true, that the successful career of this institution commenced, when its stock, leaving the hands of speculation, came to be owned, for the common purposes of investment, by such as were in possession of capital to invest, and when the proprietors exercised their proper discretion in constituting their part of the direction with a single view of giving to the bank a safe and competent administration.

The question now is, Sir, whether this institution shall be continued. We ought to treat it as a great public subject; to consider it, like statesmen, as it regards the great interests of the country, and with as little mixture as possible of all minor motives.

The influence of the bank, Mr. President, on the interests of the government, and the interests of the people, may be consid ered in several points of view. It may be regarded as it affects the currency of the country; as it affects the collection and disbursement of the public revenue; as it respects foreign exchanges; as it respects domestic exchanges; and as it affects, either generally or locally, the agriculture, commerce, and manufactures of the Union.

First, as to the currency of the country. This is, at all times, a most important political object. A sound currency is an essential and indispensable security for the fruits of industry and honest enterprise. Every man of property or industry, every man who desires to preserve what he honestly possesses, or to obtain what he can honestly earn, has a direct interest in maintaining a safe circulating medium; such a medium as shall be a real and substantial representative of property, not liable to vibrate with opinions, not subject to be blown up or blown down by the breath of speculation, but made stable and secure by its immediate relation to that which the whole world regards as of a permanent value. A disordered currency is one of the greatest of political evils. It undermines the virtues necessary for the support of the social system, and encourages propensities destructive of its happiness. It wars against industry, frugality, and economy; and it fosters the evil spirits of extravagance and

speculation. Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them with paper money. This is the most effectual of inventions to fertilize the rich man's field by the sweat of the poor man's brow. Ordinary tyranny, oppression, excessive taxation, these bear lightly on the happiness of the mass of the community, compared with a fraudulent currency, and the robberies committed by depreciated paper. Our own history has recorded for our instruction enough, and more than enough, of the demoralizing tendency, the injustice, and the intolerable. oppression on the virtuous and well disposed, of a degraded paper currency, authorized by law, or in any way countenanced by government.

We all know, Sir, that the establishment of a sound and uniform currency was one of the great ends contemplated in the adoption of the present Constitution. If we could now fully explore all the motives of those who framed and those who supported that Constitution, perhaps we should hardly find a more powerful one than this. The object, indeed, is sufficiently prominent on the face of the Constitution itself. It cannot well be questioned, that it was intended by that Constitution to submit the whole subject of the currency of the country, all that regards the actual medium of payment and exchange, whatever that should be, to the control and legislation of Congress. Congress can alone coin money; Congress can alone fix the value of foreign coins. No State can coin money; no State can fix the value of foreign coins; no State (nor even Congress itself) can make any thing a tender but gold and silver, in the payment of debts; no State can emit bills of credit. The exclusive power of regulating the metallic currency of the country would seem necessarily to imply, or, more properly, to include, as part of itself, a power to decide how far that currency should be exclusive, how far any substitute should interfere with it, and what that substitute should be. The generality and extent of the power granted to Congress, and the clear and well-defined. prohibitions on the States, leave little doubt of an intent to rescue the whole subject of currency from the hands of local legislation, and to confer it on the general government. But, notwithstanding this apparent purpose in the Constitution, the truth is, that the currency of the country is now, to a very great