together with the unexpected income from the new tariff, accounts in part for the immense popularity of the man; and justifies the strong expression of Daniel Webster, who said, on one occasion, that Alexander Hamilton raised the public credit of the United States from the dead.

During twenty years, the term of its charter, the operation of the first United States Bank appears to have been healthful and beneficent. It furnished a paper money secured by government stocks and by cash that was current at a uniform value all over the country; its loans, under the circumstances of the time, gave a sharp spur to industry and commerce; while its dividends to stockholders never fell below eight, and frequently rose to ten per cent. It is not to be wondered at, therefore, that as the time approached for the charter to expire, the stockholders were anxious for a renewal. They applied for such renewal, offering to pay the government a million and a quarter for the privilege of continuance. It was alleged against the bank, on the other hand, that the stock was now largely owned by foreigners, which was true; and that the directors had sometimes made, or withheld, loans, for party purposes, which was doubtful. The real cause of the opposition to the renewal of the charter was this: Instead of the three State banks in existence when the national institution was chartered, there were now (1811) eighty-eight State banks, in some of which the States as such held stock. These banks and their friends supposed that it would be for their interest that the national bank should go out of being; that, in that case, they should obtain the cus

tody and management of the national funds, and furnish the country the currency, which the national institution had furnished. The charter was defeated, in the House by one vote, and in the Senate by the casting vote of the Vice-President, George Clinton. The bank was obliged to wind up its affairs. It did so speedily and honestly. This was in 1811.

Undoubtedly the paper, of the first national bank was very good money, and certainly superior to the bills of the new State banks, for the creation of which there was a sort of mania in the country so soon as it was ascertained that the national institution could not be rechartered. Many of these went into operation on the strength of little or no bona fide capital. They issued their notes freely, and the chasm caused by the withdrawal of the national circulation was soon filled up, and more too. As a necessary consequence, the whole circulating medium became depreciated, and the currency came into dreadful 'disorder throughout the country. In the fall of 1814, there was a general stoppage of all the banks in the United States, except those in New England. The notes of the New York city banks were ten per cent. below par; those of Philadelphia, eighteen; of Baltimore, twenty; of Pittsburg, twenty-five. All this illustrates the simple financial truth, that money is not a commodity of which an unlimited quantity can be absorbed by business, but is an instrument for a certain specific purpose,namely, to facilitate the exchange of existing commodities and of services all ready to be exchanged, and only waiting for the presence of the medium to consummate the transfer; and whenever more

than enough for this purpose is put out, whether it be specie or paper, the depreciation of the whole mass is inevitable; on the same principles precisely as, when the market is permanently overstocked with sewing-machines, there will be an inevitable decline in their value. Money is good for the purpose for which it was invented, and useless for any other. So are sewing-machines. When more of either is offered than enough to serve their respective purposes, in the then circumstances of society, decline in the value of both is a matter of necessity. In 1814 there was not only too much money to do the work which money was needed at that time to do, but, also, much of it was of very inferior quality. There was no sufficient genuine value behind the paper to support it.

In this state of things Mr. Dallas, then Secretary of the Treasury, recommended to Congress the establishment of a new United States Bank, modelled after the first, with a charter for twenty years, with a capital stock of $35,000,000, the bank to pay the government a bonus of a million and a half for the privilege of coming into being. It was thought that a strong central and national institution, on which the State banks, now increased in number to two hundred and forty-six, might lean for support, would enable them shortly to resume specie payments, and to go on thereafter on better principles. The bill organizing the bank was engineered through the House by John C. Calhoun. It went into operation in 1816, just after the close of the last war with England, when the reviving enterprise and enlarged business of peace seemed to open up before it a prosperous career.

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The new bank was not, however, at first, fortunate in its management. It pushed its paper into circulation with reckless eagerness. In the course of one month it increased its discounts from three to twenty millions, and in nine months its discount line was thirty-three millions. The results were what might have been expected,-prices universally high, a spirit of speculation everywhere rife, and gold leaving the country by shiploads. The bank soon fell, into difficulties, and public opinion turned more or less against it. Although under the abler and more. careful management, first of Langdon Cheves, and then of Nicholas Biddle, the bank recovered its stability, it never enjoyed quite the same confidence and credit as the first bank.

This was not wholly its own fault; for in 1829, seven years before its charter was to expire, Andrew Jackson commenced his famous contest with the bank, which he kept up without intermission till the charter expired in 1836. Under this presidential and consequent congressional fire, the bank can hardly be said to have had a fair chance. Andrew Jackson had sworn its death by the 'tarnal-his usual oath — and Andrew Jackson was not a man to be thwarted. In his annual message in 1829, he gave the directors fair warning that there would be "constitutional difficulties" in the way of their securing any extension of their privileges, and in 1832 he vetoed the bill to recharter the bank. The next step was to remove from the custody and management of the bank the public moneys. Three years before the charter expired he requested Mr. McLane, the Secretary of the Treasury, to remove the national funds

from the custody of the bank, and to place them in certain selected State banks. Mr. McLane declined to order the removal. Whereupon Mr. Duane of New York was appointed to the treasury. But Mr. Duane, no more than his predecessor, could see his way clear to remove the deposits. When made to understand that it was the determination of the President to have them removed at all hazards, he explicitly refused to lend himself for the purpose. The President removed Mr. Duane, and appointed Roger B. Taney, the late Chief Justice, as Secretary of the Treasury. He proved more flexible to the will of power, and immediately gave the required order. The consequences of this step in the circumstances were immense and mischievous. The discount line of the bank was at the moment over $60,000,000. The public deposits were $10,000,000. The sudden withdrawal of this sum affected credit and disarranged business to a remarkable degree, and caused intense excitement all over the Union.

The next movement in the "great experiment," as it was sarcastically called in the politics of the day, was the issue of the famous specie-circular, which directed the receivers of the public money to take nothing but gold and silver in payment of the public lands. Speculators and others had been making large purchases of western lands, expecting to pay in paper money. The specie-circular came upon them like a clap of thunder. Their consternation was vast, and the circular, coming as it did, shortly after the removal of the deposits, made confusion worse confounded.

General Jackson went out of office, and the second