Register of Debates in Congress

JUNE 2, 1834.]

of 1791:

But

consequent liability which it incurred, with all other na-him, the question put by Sir Henry Parnell, whether he tional institutions, to undergo the supervision of the power meant to ask for a renewal of the bank charter before a which created it. On this point he quoted General Ham-committee of the House had investigated the affairs of the ilton, and showed that that eminent man, when he was bank. He declared that there should be full inquiry; and first recommending a bank of the United States, in the full inquiry there was, without limitation, restriction, conyear 1791, openly asserted the right and the duty of the dition, or formality, on the part of the bank. Mr. B. said Government to examine the institution as often as it it was the right and the duty of Congress to act in the thought fit, and declared that an objection to such an ex-same way towards the Bank of the United States. amination would imply mismanagement. Here he read Even if no misconduct was imputed to it, it would be the following paragraph from General Hamilton's report right to examine, and see if no misconduct had occurred. It should be a prelimiary step of prudence and precaution, "If the paper of a bank is permitted to insinuate itself before such large powers should be granted again. into all the revenues and receipts of a country; if it is there was misconduct imputed to it; and dropping all even to be tolerated as the substitute for gold and silver, other imputations, he would point out the one which stood in all the transactions of business, it becomes, in either first on the list of inquiries ordered by the House of Repview, a national concern of the first magnitude. As such, resentatives-which was alluded to in the resolution which the ordinary rules of prudence require that the Govern- he proposed to submit, if the postponement took place ment should possess the means of ascertaining, whenever which he moved for-and which went to ascertain whether it thinks fit, that so delicate a trust is executed with fidel- the Bank of the United States was the author of the disity and care. A right of this nature is not only desirable tresses which had prevailed in the country during the as it respects the Government, but it ought to be equally past winter? This he held to be a most vital inquiry, and so to all those concerned in the institution, as an addition-one that should never be abandoned until the true authors al title to public and private confidence, and as a thing of that distress were made known to the people. An im which can only be formidable to practices that imply mis- mense number of memorials presented to Congress, management.' charged it upon the President; a great number of others. All this has happened, said Mr. B. The paper of the charged it upon the bank. The truth of these charges Bank of the United States has insinuated itself into the the people ought to know; and certainly the bank ought receipts and revenue of the country; it has become a sub-not shrink from the evidence of its own books. A strong stitute for gold and silver; it has entered into all the trans- presumptive case of guilt was made out against it; and actions of business between man and man; and, thereby, that presumption was ripening into full proof and absothis bank has become a national concern, and a concern lute conviction, under the conduct of the bank in refusing of the first magnitude. The branch of the Government to submit to the test of its own books. The Government immediately representing the people, have thought fit to directors, in their memorial addressed to Congress, had order an investigation into the affairs of the bank, and strongly inculpated the bank, and gone into a statement that investigation has been resisted and defeated by the of facts to show that the directors refused every proposi bank. In the language of General Hamilton, this resist- tion to conduct the curtailment of the bank debts on a ance implies mismanagement; and that mismanagement plan of equality and impartiality, and put the whole busiought to stimulate the Government to an exertion of allness of the curtailment into the hands of a subaltern com. its powers to enforce the examination to which it is enti-mittee, appointed by the president of the bank alone, and tled. A fourth ground upon which Mr. B. placed the exempted even from the small restraint of reporting to right of the Government to examine the affairs of the the board of directors!-affirming that the late pressure bank, related to the restoration of the deposites and the in the money market had been occasioned by the bank renewal of the charter. If the bank was culpable, it itself-that the curtailment had been conducted by a sewould have no claim to the further keeping of the public cret committee, and had been partial, unequal, and unmoneys, and it ought to submit to have that question of necessary. Mr. B. went on to read several extracts from culpability tried by the evidence of its own books. If it the memorial of the Government directors, to prove what had abused the powers granted to it, it can have no claim he said. At page 16 of their memorial, he read a resofor further favor or confidence. On this point, he took lution submitted by the Government directors to the a decisive stand, independent of the charter, and inde-board, proposing a systematic reduction, to be gradual in pendent of all legal rights, and resting upon the great its operation, and to bear upon all sections of the country, principle, that the Government had a right to know how and all classes of debtors, in the same degree and proporthe bank had been managed during its present existence, tion. This plan, the committee say, would have prebefore it would renew to it another term of existence. vented an oppressive, sectional, and partail curtailment, This was a condition precedent in the hands of the Gov-and would have confined the business of curtailment te ernment. It was a condition which it had a right to pre- the board of directors, and given to every director a voice scribe, and which, under present circumstances, it was in what was done. This plan was rejected! No-worse eminently its duty to prescribe. It had a right to say to than that!-the imperious board refused even to consider the bank, We wish to know how you have exercised the it! and forthwith adopted a series of resolutions for regreat powers we have granted to you, before we renew ducing the business of the institution, and gave authority those powers; we wish to examine your own books, to see to the committee of the offices to modify these resolutions what your conduct has been; and until you submit to that as they should deem expedient, and peremptorily refused examination, we will not entertain, or consider, any prop. to require this committee, thus invested with unlimited osition to renew your extraordinary privileges. This power over the great and delicate business of curtailment was what the Government had a right to say. It was what-refused to require them even to report to the board of was done in England in relation to all great corporations directors! This, Mr. B. considered to be a flagrant -the East India Company, as well as the Bank of Eng- breach of the charter, which expressly enacts that not land. A committee of forty-eight members had thorough-less than seven directors shall constitute a board to transly investigated the affairs of the East India Company be-act business. The reduction of a debt of sixty-odd milfore its charter was renewed; a committee of thirty-two lions, was certainly a piece of business! It was the most members had also thoroughly examined the affairs of the important piece of business ever transacted by the bank; Bank of England before its charter was renewed at the and has been so transacted as to fill this hall with cries of last session of Parliament. Lord Althorp, in the House ruin and distress from various quarters of the country. of Commons, in 1831, felt almost as an imputation upon The Government directors expressly charge, at page

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Restoration of the Deposites.

[JUNE 2, 1834

17 of their memorial, that "We attribute to them the ex- subject to the control of Congress! this creature of our cessive curtailment in the business of the institution, which own creation, over which we had ample control! Yes, has been so sudden and oppressive, and which was not ample control! that was the word! this fiscal agent, which necessary, either to the extent to which it was carried, or was responsible to Congress, not to the President! and in the manner in which it was made to bear on the com- which was right in resisting all amenability to the Presi munity." Having read these extracts, Mr. B. comment-dent, because it was to Congress that the charter made it ed upon them as containing a direct charge, first, of a responsible! This was the language, in this Senate, for breach of the charter in committing the proper business four months! What is it now? Why, that it is not Conof the board to a subaltern committee of three members; gress, but the Judiciary, to which it is liable. It is the and, secondly, of a partial, sectional, unnecessary, and court-the court-to which it will submit. She will go oppressive curtailment of the debts of the institution. to law with Congress, but will not submit to be examined These were the charges; charges made by the Govern- by a committee. Congress may send a scire facias, but ment directors, and not in newspapers, but in a memorial no committee of investigation. Such is the new refuge, to Congress. True, these directors have been rejected or subterfuge of the bank. When the President asks for by the Senate; but, equally true, the House of Repre-information through the Government directors, his ausentatives had ordered an inquiry into the conduct of the thority is resisted, because the bank is responsible to Conbank, and have put this charge of the Government di- gress, and not to him! When Congress asks the same rectors at the head, and in the very front, of the subjects information, then Congress is resisted, because the bank to be inquired into by their committee. True again, that is responsible to the Judiciary, and not to Congress! Such the charter reserves to either House of Congress the right, are the contradictions, such the subterfuges, such the through a committee, to inspect the books, and to exam tricks played off in our faces, and in the view of the whole ine the proceedings of the bank, to see whether the American people. In the face of such evidences of guilt charter has been violated. But what has happened?-in the face of such a strong presumptive case to convict The committee of the House, sent to Philadelphia to in- the bank of being the author of the distresses which have spect the books, and examine the proceedings of the been complained of in the memorials to Congress, is it bank, have been resisted and repulsed! They return right to give her marks of favor and confidence? Is it without accomplishing their mission! and a loud cry is right either to restore to her the keeping of the public set up in one general chorus, by the bank, and all its moneys, or to grant her a renewal of her charter? Mr. friends, in Congress and out of Congress, that the Gov- B. thought not, and that the proper course for the Senate ernment must go to law with the bank! that the directors to follow was indicated in the resolution which he had are not bound to criminate themselves! that a scire facias read, and which he would submit for the consideration must issue, and then they will answer in court! Thus re- and action of the Senate, if the present proceedings should fusing to abide the evidence of their own books! Thus be postponed. refusing to let a committee of Congress inspect their books, Mr. CLAY asked the yeas and nays on the motion; and examine their proceedings, to ascertain whether the which were ordered, and are as follows, to wit: bank was innocent, or guilty, of a wanton oppression of YEAS.-Messrs. Benton, Brown, Forsyth, Grundy, the community, during the past winter. Mr. B. said, Hill, Kane, King of Alabama, Linn, Morris, Shepley, that since the distresses of the South Sea scheme in Eng-White, Wilkins, Wright.-13. land, at the commencement of the last century, there had NAYS.-Messrs. Bell, Bibb, Black, Calhoun, Chamnot been in any country so loud and pervading a cry of bers, Clay, Clayton, Ewing, Frelinghuysen, Hendricks, distress, as has been heard in this country during four or Kent, McKean, Mangum, Naudain, Poindexter, Porter, five months past. The cries of the English people had Prentiss, Preston, Robbins, Robinson, Silsbee, Smith, been carried to Parliament, as the cries of the American Southard, Swift, Tipton, Tomlinson, Tyler, Waggaman, people have been brought to Congress. What did the Webster.-29. English Parliament do? Immediately raised a committee; So the motion to postpone was disagreed to. sent them to examine the directors of the South Sea Com- Mr. BENTON then moved to strike out all after the pany; received their report; ordered all the directors to enacting clause of Mr. CLAY's resolutions, and insert, as an the bar; interrogated them in the face of all England; amendment, the bill reported in the House of Represent. convicted them of practices which had distressed, alarm-atives by the Committee of Ways and Means, providing ed, and injured the community; and sent them to jail, for the deposite of the public moneys in the State banks, loaded with the curses of an outraged kingdom. This is and making regulations for its security in those instituwhat Parliament did in a similar case to what has now tions. In support of his motion

happened in our America. Mr. B. would not ask what Mr. BENTON proceeded to state several reasons, and Congress had done. That question was yet to be tried to urge many considerations in favor of adopting it. He in the House of Representatives; he would not anticipate deprecated the spirit which seemed to have broken out the issue; it was not his business to do so. But what had against State banks, and said that it augured badly for the the Senate done? Had it ascertained the truth of the rights of the States. The strongest current of consolidacharges made by the Government directors, before they tion which was now observable in the Union, was that were rejected? Not at all! Had they ascertained the which sat in favor of the Federal bank and against the truth of these charges before they proposed to restore the State banks, and threatened to consolidate all moneyed public deposites to the keeping of the bank? Not at all! power, and with it all political power, in favor of a great Nothing is inquired into-nothing ascertained-all taken central institution, independent of the States, and able, for false or frivolous that is alleged against the bank; and by its own avowal, to crush the State institutions at its even her cry adopted, of, Go to law! Mr. B. remarked pleasure. He said this spirit against the State banks was upon this cry for a scire facias, so suddenly adopted in the an impulsion of modern origin-unknown to the fathers Senate here. It had broken out to-day, and now resounded of the republic, and to the early history of the countryfrom all quarters. Whence this cry? It comes from and strongest now where the spirit of consolidation was Philadelphia! It is brought back by the minority of strongest, and where the defence of State rights was thank committee; it is put in their report; and forth-weakest. At the commencement of this Federal Govwith, it becomes the cry of the whole bank party. But ernment, said Mr. B., there was no Federal bank, and all what a contradiction is exhibited, and exhibited here to the public moneys were kept in State banks, or drawn our faces! What a change in a few brief days! For four direct, and as fast as they were received, out of the hands months we heard nothing else but of this responsible bank, of receivers and collectors. General Hamilton, when

JUNE 2, 1834.]

Restoration of the Deposites.

[SENATE.

Secretary of the Treasury, kept the public moneys, for it in his time, as when it lately stopped. That bank had the first year of his administration, in these banks, and been a deposite bank for forty-five years, and the Governkept them safely there. When the Federal bank was ment had lost nothing by it, notwithstanding the attempt proposed in 1791, and the keeping of the public moneys lately made to delude the public with a belief that it had was one of the services attributed to it, Mr. Jefferson, just been selected by Mr. Taney, and had immediately then a member of President Washington's cabinet, de- failed, with an immense loss to the United States. nied the necessity of a Federal bank for any such purpose, and openly declared himself in favor of the State banks. lle said that these banks had already done this business for the Government, and done it well, and would no doubt enter into arrangements with the Treasury for doing it permanently, and on better terms than it could be done by the Federal bank. Mr. B. read an extract from Mr. Jefferson's cabinet opinion, delivered to General Washington at the creation of the first Federal bank, to sustain what he said of his opinions. The extract was in these words:

Mr. B. said, it was thus proved, by an experience of twenty years-an experience running through the whole of the administration of Jefferson and Madison, and a part of their predecessors-that the public moneys may be safely kept in the State banks; and that Mr. Jefferson was right, in his cabinet opinion of 1791, when he gave it as his solemn opinion to President Washington, that there was no necessity for chartering a Federal bank to act as the fiscal agent of the Federal Treasury, and that the State banks would enter into arrangements for that purpose, and do the business well!

Mr. B. said it was true that the Federal Government

"The existing banks will, without a doubt, enter into arrangements for lending their agency; and the more fa- had since lost about a million and a half of dollars by State vorably, as there will be a competition among them for it; banks; but that loss took place in a season of universal whereas, the bill delivers us up bound to the national embarrassment, growing out of a state of war and general bank, who are free to refuse all arrangement, but on their stagnation of trade and commerce; a season which cannot own terms, and the public not free, on such refusal, to be made the rule for judging State banks, without exemploy any other bank. That of Philadelphia, I believe, tending it to the Federal bank also; and then it would be now does this business by their post notes, which, by an fatal to that bank, for the United States lost about eleven arrangement with the Treasury, are paid by any other State millions of dollars in sustaining the present Federal bank collector to whom they are presented. This expedient in the same season of embarrassment, and saving that bank alone suffices to prevent the existence of that necessity from sharing the general fate of the State institutions. which may justify the assumption of a non-enumerated This statement, Mr. B. said, was one of those facts which power as a means for carrying into effect an enumerated it was good to prove, and as the proof was in the docuone. The thing may be done, and has been done, and ments of the Senate, he would use it, and extinguish at well done, without this assumption; therefore, it does once this delusive and deceptive comparison between not stand in that degree of necessity, which can honestly State banks and the Federal banks. Mr. B. said, that justify it." every body knew that the Federal bank was on the point Mr. B. said, that what Mr. Jefferson affirmed in 1791, of bankruptcy in the year 1819, and that, although suswas afterwards proved under his own administration, and tained by an immense deposite of public moneys, stated that of Mr. Madison. During the whole of their admin. by Mr. Cheves at eight millions of dollars, it would still strations, a large portion of the public moneys was kept have stopped payment in April, 1819, had it not been for in the State banks, and safely kept there. Mr. Gallatin, the forbearance of the State banks, and the critical arriin answer to a call made by the House of Representatives, val of specie from Kentucky and Ohio. The price which sometime before the expiration of the charter of the first it cost the United States to sustain it at that time, is found bank, showed that the public moneys were then kept in in the history of the three per cent. stock-that stock, twenty different banks, of which nine were the United the final payment of which the bank has lately caused to States Bank and its branches, and eleven were State be deferred in contravention of the will and power of the banks! Mr. B. thought this point so material, that he Government. The history is this: In the year 1817, the would read an extract from Mr. Gallatin's report, to show amount of this three per cent. debt was sixteen millions that he neither overstated nor mistook the facts. He and a quarter, and the selling price of it in market was a then read the names of the State banks employed by Mr. fraction over 60 cents in the dollar. It was evident that Gallatin, and the amount of public money in each. They if the United States entered the market like any other were: the Bank of Columbia, $115,192; the Bank of purchaser, and bought this stock at its real value, for a Alexandria, $61,917; the Bank of Newport, Rhode Island, stock bearing only three per cent. interest was really $55,788; the Bank of Pittsburg, $137,462; Roger Wilworth but little more than 50 per cent., there would be hams's Bank, $53,882; the Bank of Pennsylvania, $92,628; an immense saving, no less than the difference between the Bank of Saco, $28,528; the Manhattan Bank, $188,670; the then market price and the full nominal value, which the Bank of Maine, $50,747; the Marietta Bank, $19,601; the Government would be obliged to pay, if it waited till and the Bank of Kentucky, $91,061. all the other public debt was paid, and then had to take

Such, said Mr. B., was the distribution of the deposites up the certificates in the hands of the holders, all of whom of the public moneys in the time of Mr, Gallatin; more were assignees, and had bought the stock in market at a State banks employed than the whole number of branches low rate, proportioned to its low interest. The Congress and the mother Bank of the United States put together! of 1817 was fully aware of this advantage, and as the In several instances, a State bank was employed in the public Treasury was then full to overflowing, it detersame place in which a branch of the Federal bank was situ-mined to purchase in this stock. On the 3d of March, ated, and some of those employed then are employed now. 1817, an act was passed for that purpose, and the ComOf this class, Mr. B. instanced the Manhattan Bank of New missioners of the Sinking Fund were directed to buy it in York, and stated that the stock of this bank was, at this at a rate not exceeding 65 per cent. The deposites in day, about twenty dollars in the hundred higher than the the Bank of the United States, on that day, were about stock of the United States Bank! And this after all the twelve millions of dollars; on the June following, they efforts which had been made to shake public confidence in were sixteen millions; and the average monthly deposite, the State banks, and especially those of New York. The during the whole existence of the bank, has been Bank of Alexandria, which he said had lately stopped, $6,717,253. The commissioners began to execute the with a small amount of public money in it, and the pay-act. In the course of the year 1817, they bought in ment of which is secured, was also in the list of Mr. Gal- $2,693,092; in 1818, they bought $10,562, and, in 1819, latin's deposite banks, and had double as much money in they bought $158,964. These purchases were made at

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Restoration of the Deposites.

[JUNE 2, 1834

63, 64, and 65 per cent., and the saving to the Govern-doubt that the United States Bank has been instrumental ment was 364, 36, and 35 cents in every dollar, amounting in producing that result, if he will but examine the facts, to near one million of dollars on the whole purchase. the undisputed facts, now before the country. Every And there the purchases stopped. The deposites were great change in the loans made by banks, and in their cir necessary to sustain the Bank of the United States. No culation of notes, operates directly upon the business conmore of the three per cents. were then bought; the price cerns of the community; and the more powerfully do sudafterwards rose above 65, and were finally paid, under den and great changes of this kind operate, as the busi President Jackson's administration, at par! About thir-ness is transacted upon a credit, and not a cash system. teen millions and a quarter of this stock had to be paid at par about the year 1832, which might have been purchased at 65 in 1817, 1818, and 1819. The loss to the Government was about $4,600,000, on the rise in the stock, and about $6,400,000 in the interest paid upon it. The aggregate is eleven millions! And this is the amount, said Mr. B., of the loss actually sustained by the United States in upholding this bank in that season of embarrassment in which so many of the State banks failed, and in which the Federal bank would have failed, if it had not been for the use of the public deposites. This was the loss on one head alone, Mr. B. said. How much the people had lost in consuming the time of Congress in debates about that bank; how much in printing for it; how much in using their money in electioneering against them; how much it might lose on the present stock, it was not for him to say: it was sufficient that he proved a loss of eleven millions in a single operation, as that would overbalance, by seven to one, the whole amount of the loss in the State banks.

Sudden and great expansions of bank loans, and like sudden and great curtailments, must unavoidably produce great plenty, and then great scarcity of money. The ef fect of extending loans, is to induce men to enlarge their business-to engage in new business-to make contracts freely, and payable at longer periods in advance. And if loans are not thus extended beyond what can be safely permitted without a re-action, all may be well. But if a great change is soon made, and the loans are called in, the man of business is called upon to pay before his oper ations have come to maturity, before he has turned his property into cash; or, if his property is disposed of, it remains uncollected on notes or bills of exchange; and these cannot avail him, if the banks are diminishing their loans rapidly. Thus, his means are found not to be available; and money, by this operation, is greatly in demand, is difficult to be obtained, and ruinous sacrifices are the necessary consequence. Thus, the business transactions are disordered, and distress is produced, and ruin follows. In this state, if a general alarm can be produced, the ef Mr. B. said, that having shown that he stood upon fect of every evil influence is greatly increased; and it is Jeffersonian grounds, and upon safe ground, in recom- not strange that distress is great and general. Such a mending the State banks for places of deposite for the scene we have passed through, if indeed we have passed public moneys, he would make a few remarks, particular-entirely through it; and it is the part of wisdom to examly applicable to the amendment which he had offered.ine into the causes by which it has been produced. Has That amendment was a copy of a bill agreed upon in the bank greatly extended its loans, and greatly contractthe Committee of Ways and Means in the House of Rep-ed them, and thus greatly contributed to produce the reresentatives, for regulating the deposite of the public sult which such a course necessarily brings upon us. moneys in the State banks. It was a direct movement to- It appears from the report of the committee of the diwards regulating, by law, the keeping of the public mon-rectors of the bank, that the loan of the bank to the eys. For six months the Union had been filled with a cry business community, excluding the Government, was, in that the purse was in the hands of the President! that he January, 1831, $14,032,057 33 had seized upon the Treasury! that he had all the public money in his own hands! that he was a usurper! à des pot! possessing all power! wielding all authority! brandishing the sword in one hand, and clenching the public purse in the other! This, he said, had been the cry for six months; and unfounded as that cry was-and more unfounded could not be the baseless fabric of a vision-yet, it was charitable to suppose, that those who raised it would be willing to put an end to the evil, real or imaginary, of which they complained. Let them, then, adopt the amendment. If agreed to the principle, they can arrange the details. Let them adopt the amendment. Let them regulate by law, and by law of their own making, and then the lawless state of things of which they complain will immediately cease. If not, let them complain no

more.

[Mr. BENTON was followed by Mr. CLAYTON, Mr. WRIGHT, and Mr. CLAY.]

Mr. SHEPLEY then rose and said

Mr. President: It will, or will not, be proper to make the United States Bank the depository of the public money, as it shall have been found to have fulfilled its duty to the country, or to have violated it. It becomes necessary, then, to determine, before we adopt the resolution, that it has not been guilty of any misconduct; for it cannot be supposed that it ought to be strengthened and aided, by depositing the public money in it, if it has, in any degree, abused its trust. If it has aided and assisted to derange the moneyed concerns, and disturb the business operations of the country for the last few months, that would be cause sufficient to induce us to withhold our confidence. That the business operations have been greatly disturbed, no one denies; and no one will, I think,

and that the same description of loans in
May, 1832, was

70,428,050 72

$26,395,993 39 Showing an increase of loans, or extension of means to borrowers, of $26,395,993 39, in sixteen months.

It appears, by the report of the "Union Committee" of the city of New York, that, on the 1st of December, 1833, being the time of the meeting of Congress, the bank loan was $54,453,000, showing a diminution of the loan from May, 1832, of $15,975,050 72 in nineteen months; and it will be noticed that these results show an increase and diminution of loans, or, in other words, a fluctuation and change in the moneyed operations and business transactions of the community, of $42,370,000 in round numbers-in less than three years. The effect of such a course upon the value of property, has been most clearly and powerfully stated by a Senator from South Carolina, [Mr. CALHOUN,] as follows:

"If we turn our attention to the laws which govern the circulation, we shall find one of the most important to be that, as the circulation is decreased or increased, the rest of the property will, all other circumstances remaining the same, be decreased or increased in value exactly in the same proportion. To illustrate: If a community should have an aggregate amount of property of thirtyone millions of dollars, of which one million constitutes its currency; if that one million be reduced one-tenth part, that is to say, one hundred thousand dollars, the value of the rest will be reduced in like manner one-tenth part, that is, three millions of dollars. And here a very important fact discloses itself, which explains why the cur rency should be touched with such delicacy, and why

JUNE 2, 1834.]

Restoration of the Deposites.

[SENATE.

stability and uniformity are such essential qualities: I came distrustful of his neighbor. Those who had debts mean, that a small absolute reduction of the currency due to them, even if they did not want the money, called makes a great absolute reduction of the value of the en- for its payment, because they were unwilling longer to tire property of the community, as we see in the case trust the debtor. Those who had money which they had supposed, where a reduction of one hundred thousand no occasion to use, would neither loan it nor purchase dollars in the currency reduces the aggregate value of property with it-because they were afraid of loss, or of property three millions of dollars, a sum thirty times a fall in price. Those who owned property were afraid greater than the reduction of the currency. From this to sell on a credit, lest the note should prove not to be results an important consideration. If we suppose the good. Such is the natural influence of an alarm or panic; entire currency to be in the hands of one portion of the and when a reflecting people shall examine this matter, community, and the property in the hands of the other they will perceive, that this Senate has much to answer portion, the former, by having the currency in their pos- for in "sounding the alarm," at the very moment when session, might control the value of all the property of the the bank was pressing very heavily upon the business community, and possess themselves of it at their pleasure. community by calling in its loans, and thus causing a Take the case already selected; and suppose that those double evil influence to operate upon it. A political inwho hold the currency diminish it one-half by abstracting fluence may possibly be produced for a time by such a it from circulation; the effect of which would be to re- combination; but can it be supposed, that such a people as duce the circulation to five hundred thousand dollars; the ours will not rise to throw off from it a power which can value of property would also be reduced one-half; that is, thus break up all its safeguards upon property-paralyze fifteen millions of dollars. Let the process be reversed, all its industry-and bring in ruin and distress at its pleasand the money abstracted gradually restored to circula-ure? The people have yet the power to stay the hand tion, and the value of the property would again be in- of oppression, whether in the shape of a bank only, or creased to thirty millions. It must be obvious, that by as combined with an alarm for the constitution and the alternating these processes and purchasing at the point of laws," because an attempt is made to diminish its means the greatest depression, when the circulation is the least, of evil by taking the public money from it; and if they and selling at the point of the greatest elevation, when will not rouse themselves to the effort to throw off the it is the fullest, the supposed moneyed class, who could burden, they must be content to bear it. at pleasure increase or diminish the circulation, by abstricting or restoring it, might also at pleasure control the entire property of the country."

The same remarks which he makes in relation to the currency, are almost as applicable to the loans as to the notes circulated as a currency; because it is the increase of the moneyed power, or its domination, which thus operates upon fixed property. When he supposes the entire currency to be "in the hands of one portion of the community," and shows that it might "control the value of all the property," we have but to substitute the United States Bank for that "one portion;" and if it has the power" to destroy the State banks," and "to control the currency," as it claims to have, then can it "control the value of all the property." And it is too nearly true, to leave any one to doubt its dangerous character. The State banks are not to be feared, because they cannot combine and act as one, any more than all the tradesmen of any one trade can act as one, and thus control the prices of all the articles of that trade.

The Senator from South Carolina [Mr. CALHOUN] seems to regard the bank with favor, only because it acts as a regulator of the operations of the State banks; and the same merit is claimed for it by others-and if it does this, it might be entitled to the merit of one good act; for the mischiefs of a fluctuation in the loans and currency I have freely admitted-nay, I have asserted. But it remains to be proved, that it does act to regulate the State banks. If it regulates them, we should expect them to increase their loans in proportion as the United States Bank did, and to diminish as it diminished. It can act upon the State banks only by letting loose the reins, and by drawing them close again; and if its influence is ever seen in this manner, it will be seen to have acted powerfully du ring the last three years; for, during that time, its changes have been great and sudden.

For the purpose of ascertaining what its influence has been upon the State banks, and whether they are justly chargeable with having, in any degree, contributed to disturb the business of the country, by sudden changes in their business, I have, with the kind assistance of several gentlemen, obtained a statement of the capitals, loans, and circulations, of the State banks in five New England States, and also in the cities of New York and Philadelphia, for the last three years. This result I now exhibit, as follows:

Aggregate statement of the Banks in the State of Maine.

It is thus that the bank is shown to have the power not only to derange the business transactions of the community, but to have used her power for that purpose. The extension of its loans was to place it in a condition to have an increased power, which it could use by withdrawing it, to disturb the operations of business, and induce the people to cry out for relief by a re-charter of the bank. The influence of the bank in this manner has a direct tendency to make every man's property insecure. By June, doubling the loan, the bank raises the value of property, and by causing a scarcity of money, by sudden and great curtailment, it lessens the value-prevents there being a demand for it, and causes a sacrifice of it-perhaps to pay the very debt which it encouraged the man to make to obtain it. No greater mischief can well befall a couny, than to render property insecure and unsafe-and as the bank can bring about at pleasure--and so far as Causing a fluctuation of forty-two millions of dollars in three years could produce such a result, it has been hown that it has done it.

Another cause has, no doubt, contributed to aid in ocioning the distresses of the country. As stated on a rmer occasion, the voice of alarm went out from this all, and again and again was it returned and sent forth, and repeated in the newspapers, until confidence between man and man was destroyed, and every man be