LXXXIII. THE VETO MESSAGE HISSED IN THE SENATE GALLERIES
The Senate chamber, and its galleries, were crowded to their utmost capacity to hear the reading of the veto message, and to witness the proceedings to which it would give rise. The moment the reading was finished hisses broke forth, followed by applauses. Both were breaches of order, and contempts of the Senate; but the hisses most so, as being contemptuous in themselves, independent of the rule which forbids them, and as being also the causes of the applauses, which are only contemptuous by virtue of the rule which forbids manifestations of satisfaction as well as of dissatisfaction at any thing done in the Senate: and because a right to applaud would involve a right to judge; and, by implication, to condemn as well as to approve. The President of the Senate heard a disturbance, and gave the raps on the table to restore order: but Mr. Benton, who was on the look-out for the outrage, was determined that it should not go off with raps upon the table: he thought there ought to be raps on the offenders, and immediately stood up and addressed the Chair.
"Mr. President, there were hisses here, at the reading of the presidential message. I heard them, sir, and I feel indignant that the American President shall be insulted. I have been insulted by the hisses of ruffians in this gallery, when opposing the old Bank of the United States. While I am here, the President shall never be insulted by hisses in this hall. I ask for no such thing as clearing the galleries, but let those who have made the disturbance be pointed out to the sergeant-at-arms, and be turned out from the galleries. Those who have dared to insult our form of government--for in insulting this message they have insulted the President and our form of government--those ruffians who would not have dared to insult the King, surrounded by his guard, have dared to insult the American President in the American Senate; and I move that the sergeant-at-arms be directed to take them into custody."
This motion of Mr. Benton was opposed by several senators, some because they did not hear the disturbance, some because it was balanced, being as much clapping as hissing; some because they were in doubt about the power to punish for a contempt; and some from an amiable indisposition to disturb the people who had disturbed the Senate, and who had only yielded to an ebullition of feeling. This sort of temporizing with an outrage to the Senate only stimulated Mr. Benton to persevere in his motion; which he did until the object was accomplished. The Register of Debates shows the following remarks and replies; which are given here to show the value of perseverance in such a case, and to do justice to the Senate which protected itself:
"Mr. RIVES regretted that any disturbance had taken place. He doubted not but the senator thought he heard it, but must say, in all sincerity, he did not hear the hiss. At all events, it was so slight and of short duration, that the majority of the Senate scarcely heard it. He hoped that no proceedings of this kind would take place, and that this manifestation of disturbance, when so deep an interest was felt, and which was so immediately quieted, would be passed over. The general opinion of the senators around him was, that the honorable senator was mistaken.
"Mr. BENTON. I am not mistaken--I am not.
"Mr. RIVES. He hoped they would pass it by, as one of those little ebullitions of excitement which were unavoidable, and which was not offered to insult this body, or the President of the United States.
"Mr. BENTON heard the hisses, and heard them distinctly; if a doubt was raised on it, he would bring the matter to a question of fact, 'true or not true.' No man should doubt whether he heard them or not. He came here this day prepared to see the American President insulted by bank bullies; and he told his friends that it had been done, and that they never could proceed in action on a bank, when the American Senate would not be insulted, either by hissing on one side, or clapping on the other. He told them, if it was done, as sure as the American President should be insulted this day, by bank ruffians, just so sure he should rise in his place and move to have those disturbers of the honor and dignity of the Senate brought to the bar of the Senate. He would not move to clear the galleries, for a thousand orderly people were there, who were not to be turned out for the disturbance of a few ruffians. He would tell the senator from Virginia that he (the senator) should hang no doubt on his declaration; and if it were doubted, he would appeal to senators near him. [Mr. WALKER. I will answer, most directly, that I heard it, and I believe the same bully is going on now.] A national bank (continued Mr. B.) is not, as yet, our master, and shall not be; and he would undertake to vindicate the honor of the Senate, from the outrages perpetrated on it by the myrmidons of a national bank. Were the slaves of a national bank to have the privilege of insulting the Senate, just as often as a vote passed contrary to their wishes? It was an audacity that must be checked--and checked before they went with arms in their hands to fire on those who gave votes contrary to their wishes, or assassinate them on their way home. He put the whole at defiance--the entire bank, and its myrmidons.
"Mr. PRESTON said if any thing had occurred in the gallery out of order, it should be strictly inquired into and punished. He himself did not hear the manifestations of disapprobation, alluded to by the senators on the other side; but it was sufficient for him that the senators heard it, or supposed that they heard it. [Mr. BENTON. We did not suppose we heard it; we knew it.] In this case (continued Mr. P.), a formal investigation should take place. It was a contempt of the Senate, and, as a member of the Senate, he desired to see an investigation--to see the charge fixed on some person, and if properly sustained, to see punishment awarded. Manifestations of praise or censure were eminently wrong, and eminently dangerous; and it was due to every member of the Senate that they should preserve the dignity of the body by checking it. He hoped, therefore, if a formal motion was made, it would be discovered who had caused the disturbance, and that they would be properly punished.
"Mr. BUCHANAN said this was a very solemn and momentous occasion, which would form a crisis, perhaps, in the politics of the country; and he should hope, as he believed that every American citizen present in the galleries would feel the importance of this crisis, and feel deeply sensible of the high character to which every man, blessed with birth in this free country, should aim. He heard, distinctly heard, the hiss referred to by the senator from Missouri [Mr. BENTON], but he was bound to say it was not loud and prolonged, but was arrested in a moment, he believed partly from the senator rising, and partly from the good sense and good feeling of the people in the galleries. Under these circumstances, as it only commenced and did not proceed, if he had the power of persuasion, he would ask the senator from Missouri to withdraw his motion.
"[Mr. BENTON. I never will, so help me God.]
"He thought it better, far better, that they proceed to the important business before them, under the consideration that they should not be disturbed hereafter; and if they were, he would go as far as the senator from Missouri in immediately arresting it. He would much rather go on with the business in hand.
"Mr. LINN reminded the Senate that when the bank bill had passed the Senate there was a loud manifestation of approbation in the gallery, of which no notice was taken. He believed on the present occasion there was approbation as well as hisses; but both were instantly suppressed. He had distinctly heard both. No doubt it was the promptness with which his colleague had got up to check the disturbance, which had prevented it from going further. He had no doubt some law ought to be passed making it punishable to commit any outrage of this kind on either House of Congress.
"Mr. MERRICK thought with the senator from Pennsylvania, that this was a very solemn occasion. There had been tokens of assent and dissent. The President of the Senate at the moment rapped very hard till order was restored. The disorder was but momentary. He trusted some allowance would be made for the excitement so natural on the occasion.
"Mr. KING suggested the difficulty that might arise out of pursuing the matter further. He had witnessed something of the kind once before, and when the offender was brought to the bar, great embarrassment was created by not knowing how to get rid of him. He thought it would be better to pass over the matter and proceed to the consideration of the message, or to the appointment of a time for its consideration.
"The CHAIR explained that having heard some noise, without considering whether it was approbation or disapprobation, he had called the Senate to order; but could not say that he had or had not heard hisses.
"Mr. RIVES explained that he did not mean to say the senator from Missouri did not hear the hisses, but that he himself did not hear them, and he believed many gentlemen around him did not hear any. But as the senator from Missouri had avowedly come prepared to hear them, no doubt he did, more sensitively than others. He would ask the senator to be satisfied with the crush which the mother of monsters had got, and not to bear too hard on the solitary bank ruffian, to use his own expression, who had disapproved of the monster's fate. He hoped the senator would withdraw the motion.
"Mr. LINN observed that the senator from Virginia, by his own remarks, doubting that there were any hisses, had forced the senator from Missouri to persist in having the proof. However, he now understood that point was settled; and the object being accomplished, he hoped his colleague would withdraw the motion.
"Mr. PRESTON again expressed his concurrence in the propriety of the motion, and hoped effectual steps would be taken to prevent the recurrence of such a scene.
"Mr. ALLEN made some appropriate remarks, and concluded by stating that he understood the offender was in custody, and expressed his sorrow for having done what he was not at the time aware was an offence; as, therefore, all the ends had been accomplished which his friend had in view when he refused to withdraw his motion, he hoped he would now withdraw it.
"Mr. WALKER said, when the senator from Missouri [Mr. BENTON] pledged himself not to withdraw his motion to arrest the individual who had insulted the Senate and the country by hissing the message of the President of the United States, that pledge arose from the doubt expressed by the senator from Virginia [Mr. RIVES] whether the hissing had taken place. That doubt was now solved. When the senator from Missouri appealed to his friends as to the truth of the fact stated by him, he [Mr. WALKER] had risen, and pointed to that portion of the gallery from which the hissing proceeded. Our assistant Sergeant-at-Arms had proceeded to that quarter of the gallery designated by him [Mr. W.], and this officer had now in his possession one of the offenders, who acknowledged his indecent conduct, and who was prepared to point out many of those who had joined him. The object of the senator was, therefore, now accomplished; the fact of the indecorum was established, and the offender, as moved by the senator from Missouri, was now in custody. This, Mr. W. hoped, would be sufficient punishment, especially as Mr. W. understood the offender expressed his penitence for the act, as one of sudden impulse. As, then, the formal trial of this individual would occupy much time, Mr. W. hoped the matter would be dropped here, and let us proceed, as required by the Constitution, to consider the message of the President returning the bank bill, with his objections. This message, Mr. W. said, he regarded as the most important which ever emanated from an American President, and under circumstances the most solemn and imposing. The President, in perfect and glorious consistency with a long life of usefulness and honor, has placed his veto upon the charter of a National Bank, and, Mr. W. said, his heart was too full of gratitude to the Giver of all good for this salvation of the country, and rescue of the Constitution, to engage in the business of inflicting punishment upon an individual, said to be respectable, and who had in part atoned for his offence by the expression of his repentance. Let him go, then, and sin no more, and let us proceed to the consideration of that Veto Message, which he, Mr. W. had confidently predicted at the very commencement of this session, and recorded that opinion at its date in the journals of the day. Many then doubted the correctness of this prediction, but, he, Mr. W. whilst he stated at the time that he was not authorized to speak for the President of the United States, based his conviction upon his knowledge of Mr. TYLER as a man and a senator, and upon his long and consistent opposition to the creation of any such bank, as was now proposed to be established.
"Mr. BENTON said he had been informed by one of the officers of the Senate [Mr. BEALE] that one of the persons who made the disorder in the gallery had been seized by him, and was now in custody and in the room of the Sergeant-at-Arms. This the officers had very properly done of their own motion, and without waiting for the Senate's order. They had done their duty, and his motion had thus been executed. His motion was to seize the disorderly, and bring them to the bar of the Senate. One had been seized; he was in custody in an adjoining room; and if he was still acting contemptuously to the Senate, he should move to bring him to the bar; but that was not the case. He was penitent and contrite. He expressed his sorrow for what he had done, and said he had acted without ill design, and from no feelings of contempt to the President or Senate. Under these circumstances, all was accomplished that his motion intended. The man is in custody and repentant. This is sufficient. Let him be discharged, and there is an end of the affair. His motion now was that the President direct him to be discharged. Mr. B. said he had acted from reflection, and not from impulse, in this whole affair. He expected the President to be insulted: it was incident to the legislation on national bank charters. When they were on the carpet, the Senate, the President, and the American people must all be insulted if the bank myrmidons are disappointed. He told his family before he left home, that the Senate and the President would be insulted by hisses in the gallery this day, and that he would not let it pass--that it would be an insult, not merely to the President and Senate, but to the whole American people, and to their form of government--and that it should not pass. He came here determined to nip this business in the bud--and to prevent an insult to the President in this chamber from being made a precedent for it elsewhere. We all know the insolence of the national bank party--we know the insolence of their myrmidons--we know that President Tyler, who has signed this veto message, is subject to their insults--beginning here, and following him wherever he goes. He [Mr. B.] was determined to protect him here, and, in doing so, to set the example which would be elsewhere followed. He repeated: an insult to the President for an official act, was not an insult to the man, but to the whole American people, and to their form of government. Would these bank myrmidons insult a king, surrounded by his guards? Not at all. Then they should not insult an American President with impunity whenever he was present. In the Senate or out of it, he would defend the President from personal outrage and indignity. As to the numerous and respectable auditory now present, his motion did not reach them. He had not moved to clear the galleries; for that would send out the respectable audience, who had conducted themselves with propriety. The rule of order was "to clear the galleries;" but he had purposely avoided that motion, because the disorder came from a few, and the respectable part of the audience ought not to suffer for an offence in which they had no share. Mr. B. said the man being in custody, his motion was executed and superseded; its object was accomplished, and, he being contrite, he would move to discharge him.
"The President of the Senate ordered him to be discharged."
LXXXIV. RESIGNATION OF MR. TYLER'S CABINET
This event, with the exception of Mr. Webster who was prevailed upon to remain, took place on the 11th day of September--being two days after the second veto message--the one on the fiscal corporation bill--had been sent to the House of Representatives. It was a thing to take place in consequence of the President's conduct in relation to that bill; but the immediate cause, or rather, the circumstance which gave impulse to the other causes, was the appearance of a letter from Washington city in the New York Herald in which the cabinet was much vituperated--accused of remaining in their places contrary to the will of the President, and in spite of the neglects and slights which he put upon them with a view to make them resign. Appearing in that paper, which had come to be considered as the familiar of the President, and the part in relation to the slights and neglects being felt to be true, it could not escape the serious attention of those to whom it referred. But there was something else in it which seemed to carry its origin directly to the President himself. There was an account of a cabinet meeting in it, in which things were told which were strictly confidential between the President and his ministers--which had actually occurred; and which no one but themselves or the President could have communicated. They conferred together: the conviction was unanimous that the President had licensed this communication: and this circumstance authorized them to consider the whole letter as his, of course by subaltern hand. To this letter Mr. Ewing alluded in his letter of resignation when he said to the President: "The very secrets of our cabinet councils made their appearance in an infamous paper, printed in a neighboring city, the columns of which were daily charged with flattery of yourself and foul abuse of your cabinet." There was no exception in the letter in favor of any one. All were equally included: all took their resolutions together (Mr. Granger excepted who was not present), and determined to resign at once, and in a body, and to publish their reasons--the circumstances under which they acted justifying, in their opinion, this abrupt and unceremonious separation from their chief. All carried this resolve into effect, except Mr. Webster, who was induced to re-consider his determination, and to remain. The reasons for this act should be given, so far as they are essential, in the words of the retiring ministers themselves: and, accordingly here they are; and first from Mr. Ewing:
"This bill, framed and fashioned according to your own suggestions, in the initiation of which I and another member of your cabinet were made by you the agents and negotiators, was passed by large majorities through the two Houses of Congress, and sent to you, and you rejected it. Important as was the part which I had taken, at your request, in the origination of this bill, and deeply as I was committed for your action upon it, you never consulted me on the subject of the veto message. You did not even refer to it in conversation, and the first notice I had of its contents was derived from rumor. And to me, at least, you have done nothing to wipe away the personal indignity arising out of the act. I gathered, it is true, from your conversation, shortly after the bill had passed the House, that you had a strong purpose to reject it; but nothing was said like softening or apology to me, either in reference to myself or to those with whom I had communicated at your request, and who had acted themselves and induced the two Houses to act upon the faith of that communication. And, strange as it may seem, the veto message attacks in an especial manner the very provisions which were inserted at your request; and even the name of the corporation, which was not only agreed to by you, but especially changed to meet your expressed wishes, is made the subject of your criticism. Different men might view this transaction in different points of light, but, under these circumstances, as a matter of personal honor, it would be hard for me to remain of your counsel, to seal my lips and leave unexplained and undisclosed where lies in this transaction the departure from straightforwardness and candor. So far indeed from admitting the encouragement which you gave to this bill in its inception, and explaining and excusing your sudden and violent hostility towards it, you throw into your veto message an interrogatory equivalent to an assertion that it was such a bill as you had already declared could not receive your sanction. Such is the obvious effect of the first interrogatory clause on the second page. It has all the force of an assertion without its open fairness. I have met and refuted this, the necessary inference from your language, in my preceding statement, the correctness of which you I am sure will not call in question."
Of the cause assigned for the President's change in relation to the bill, namely Mr. Botts' letter, Mr. Ewing thus expresses himself:
"And no doubt was thrown out on the subject (veto of the fiscal corporation bill) by you, in my hearing, or within my knowledge, until the letter of Mr. Botts came to your hands. Soon after the reading of that letter, you threw out strong intimations that you would veto the bill if it were not postponed. That letter I did and do most unequivocally condemn, but it did not effect the constitutionality of the bill, or justify you in rejecting it on that ground; it could affect only the expediency of your action; and, whatever you may now believe as to the scruples existing in your mind, in this and in a kindred source there is strong ground to believe they have their origin."
Mr. Badger, Secretary of the Navy:
"At the cabinet meeting held on the 18th of August last (the attorney-general and the postmaster-general being absent), the subject of an exchange bank, or institution, was brought forward by the President himself, and was fully considered. Into the particulars of what passed I do not propose now to enter. It will be sufficient to say that it was then distinctly stated and understood that such an institution met the approbation of the President, and was deemed by him free of constitutional objections; that he desired (if Congress should deem it necessary to act upon the subject during the session) that such an institution should be adopted by that body, and that the members of his cabinet would aid in bringing about that result; and Messrs. Webster and Ewing were specially requested by the President to have a communication upon the subject with certain members of Congress. In consequence of what passed at this meeting, I saw such friends in Congress as I deemed it proper to approach, and urged upon them the passage of a bill to establish such an institution, assuring them that I did not doubt it would receive the approbation of the President. The bill was passed, as the public know, and was met by the veto. Now, if the President, after the meeting of the 18th August, had changed his mind as to the constitutional power of Congress, and had come to doubt or deny what he had admitted in that meeting (which is the most favorable interpretation that can be put upon his conduct), it was, in my opinion, a plain duty on his part to have made known to the gentlemen concerned this change of sentiment--to have offered them an apology for the unpleasant situation in which they were placed by his agency--or, at least, to have softened, by a full explanation of his motives, his intended veto of a measure in promoting the success of which they, at his request, had rendered their assistance. But this the President did not do. Never, from the moment of my leaving his house on the 18th, did he open his lips to me on the subject. It was only from the newspapers, from rumor, from hearsay, I learned that he had denied the constitutionality of the proposed institution, and had made the most solemn asseverations that he would never approve a measure which I knew was suggested by himself, and which had been, at his own instance, introduced into Congress. It is scarcely necessary to say that I have not supposed, and do not now suppose, that a difference merely between the President and his cabinet, either as to the constitutionality or the expediency of a bank, necessarily interposes any obstacles to a full and cordial co-operation between them in the general conduct of his administration; and therefore deeply as I regretted the veto of the first bill, I did not feel myself at liberty to retire on that account from my situation. But the facts attending the initiation and disapproval of the last bill made a case totally different from that--one it is believed without a parallel in the history of our cabinets; presenting, to say nothing more, a measure embraced and then repudiated--efforts prompted and then disowned--services rendered and then treated with scorn or neglect. Such a case required, in my judgment, upon considerations, private and public, that the official relations subsisting between the President and myself should be immediately dissolved."
Mr. BELL, Secretary at War.
"I called to see the President on official business on the morning (Monday, 16th August) before the first veto message was sent in. I found him reading the message to the Secretary of the Treasury. He did me the honor to read the material passages to me. Upon reading that part of it which treats of the superior importance and value of the business done by the late bank of the United States in furnishing exchanges between the different States and sections of the Union, I was so strongly impressed with the idea that he meant to intimate that he would have no objection to a bank which should be restricted in dealing in exchanges, that I interrupted him in the reading, and asked if I was to understand, by what he had just read, that he was prepared to give his assent to a bank in the District of Columbia, with offices or agencies in the States, having the privilege, without their assent, to deal in exchanges between them, and in foreign bills. He promptly replied that he thought experience had shown the necessity of such a power in the government. I could not restrain the immediate expression of my gratification upon hearing this avowal. I said to the President at once, that what I had feared would lead to fatal dissension among our friends, I now regarded as rather fortunate than otherwise; that his veto of the bill then before him (the first one), would lead to the adoption of a much better one. I also congratulated him upon the happy circumstance of the delay which had taken place in sending in his veto message. The heat and violence which might have been expected if the veto had been sent in immediately upon the passage of the bill, would now be avoided. Time had been given for cool reflection, and as the message did not exclude the idea of a bank in some form, no unpleasant consequences would be likely to follow. He expressed his great surprise that there should be so much excitement upon the subject; said that he had had his mind made up on the bill before him from the first, but had delayed his message that there should be time for the excitement to wear off; that nothing could be more easy than to pass a bill which would answer all necessary purposes; that it could be done in three days. The next day, having occasion to see the President again, he requested me to furnish him with such information as the war department afforded of the embarrassments attending the transfer and disbursement of the public revenue to distant points on the frontier, in Florida, &c. He at the same time requested me to draw up a brief statement of my views upon the subject, showing the practical advantages and necessity of such a fiscal institution as he had thought of proposing. Such information as I could hastily collect from the heads of the principal disbursing bureaus of the department I handed to him on the evening of the same day, knowing that time was of the utmost importance in the state in which the question then was. He received the statements I gave him with manifest indifference, and alarmed me by remarking that he began to doubt whether he would give his assent (as I understood him) to any bank."
This was Mr. Bell's first knowledge of the second bill--all got from the President himself, and while he was under nervous apprehension of the storm which was to burst upon him. He goes on to detail the subsequent consultations with his cabinet, and especially with Mr. Webster, as heretofore given; and concludes with expressing the impossibility of his remaining longer in the cabinet.
Mr. CRITTENDEN, the attorney-general, resigned in a brief and general letter, only stating that circumstances chiefly connected with the fiscal agent bills, made it his duty to do so. His reserve was supposed to be induced by the close friendly relation in which he stood with respect to Mr. Clay. Palliation for Mr. Tyler's conduct was attempted to be found by some of his friends in the alleged hostility of Mr. Clay to him, and desire to brow-beat him, and embarrass him. No doubt Mr. Clay was indignant, and justly so, at the first veto, well knowing the cause of it as he showed in his replies to Mr. Rives and Mr. Archer: but that was after the veto. But even then the expression of his indignation was greatly restrained, and he yielded to his friends in twice putting off his speech on that first veto, that he might not disturb Mr. Tyler in his preparation of the second bill. The interest at stake was too great--no less than the loss of the main fruits of the presidential election--for him to break voluntarily with Mr. Tyler. He restrained himself, and only ceased his self-restraint, when temporizing would no longer answer any purpose; and only denounced Mr. Tyler when he knew that he had gone into the embraces of a third party--taken his stand against any national bank as a means of reconciling himself to the democracy--and substituted "a secret cabal" (which he stigmatized as "a kitchen cabinet") in place of his constitutional advisers.
Two days after the appearance of those letters of resignation, the whole of which came out in the National Intelligencer, Mr. Webster published his reasons for not joining in that act with his colleagues: and justice to him requires this paper to be given in his own words. It is dated September 13th, and addressed to Messrs. Gales and Seaton, the well reliable whig editors in Washington.
"Lest any misapprehension should exist, as to the reasons which have led me to differ from the course pursued by my late colleagues, I wish to say that I remain in my place, first, because I have seen no sufficient reasons for the dissolution of the late cabinet, by the voluntary act of its own members. I am perfectly persuaded of the absolute necessity of an institution, under the authority of Congress, to aid revenue and financial operations, and to give the country the blessings of a good currency and cheap exchanges. Notwithstanding what has passed, I have confidence that the President will co-operate with the legislature in overcoming all difficulties in the attainment of these objects; and it is to the union of the whig party--by which I mean the whole party, the whig President, the whig Congress, and the whig people--that I look for a realization of our wishes. I can look nowhere else. In the second place, if I had seen reasons to resign my office, I should not have done so, without giving the President reasonable notice, and affording him time to select the hands to which he should confide the delicate and important affairs now pending in this department."
Notwithstanding the tone of this letter, it is entirely certain that Mr. Webster had agreed to go out with his colleagues, and was expected to have done so at the time they sent in their resignations; but, in the mean while, means had been found to effect a change in his determination, probably by disavowing the application of any part of the New York Herald letter to him--certainly (as it appears from his letter) by promising a co-operation in the establishment of a national bank (for that is what was intended by the blessings of a sound currency and cheap exchanges): and also equally certain, from the same letter, that he was made to expect that he would be able to keep all whiggery together--whig President Tyler, whig members of Congress, and whig people, throughout the Union. The belief of these things shows that Mr. Webster was entirely ignorant of the formation of a third party, resting on a democratic basis; and that the President himself was in regular march to the democratic camp. But of all this hereafter.
The reconstruction of his cabinet became the immediate care of the President, and in the course of a month it was accomplished. Mr. Walter Forward, of Pennsylvania, was appointed Secretary of the Treasury; the department of War was offered to Mr. Justice McLean of the Supreme Court of the United States, and upon his refusal to accept the place, it was conferred upon John C. Spencer, Esq., of New York; Mr. Abel P. Upshur, of Virginia, was appointed Secretary of the Navy--Hugh S. Legare, Esq., of South Carolina, Attorney-General--Charles A. Wickliffe, Esq., of Kentucky, Postmaster-General. This cabinet was not of uniform political complexion. Mr. Webster had been permanently of that party which, under whatsoever name, had remained antagonistic to the democracy. Mr. Forward came into public life democratic, and afterwards acted with its antagonists: the same of Mr. Wickliffe and Mr. Spencer: Mr. Upshur a whig, classed with Mr. Calhoun's political friends--Mr. Legare the contrary, and democratic, and distinguished for opposition to nullification, secession, and disunion.
Chapter LXXXV
REPUDIATION OF MR. TYLER BY THE WHIG PARTY: THEIR MANIFESTO: COUNTER MANIFESTO BY MR. CALEB CUSHING.
The conduct of Mr. Tyler in relation to a national bank produced its natural effect upon the party which had elected him--disgust and revolt. In both Houses of Congress individual members boldly denounced and renounced him. He seemed to be crushed there, for his assailants were many and fierce--his defenders few, and feeble. But a more formal act of condemnation, and separation was wanted--and had. On the 11th day of September--the day of the cabinet resignations, and two days after the transmission of the second veto message--the whigs of the two Houses had a formal meeting to consider what they should do in the new, anomalous, and acephalous condition in which they found themselves. The deliberations were conducted with all form. Mr. Senator Dixon of Rhode Island and Mr. Jeremiah Morrow of Ohio--both of them men venerable for age and character--were appointed presidents; and Messrs. Kenneth Rayner of North Carolina, Mr. Christopher Morgan of New York, and Richard W. Thompson of Indiana--all members of the House--were appointed secretaries. Mr. Mangum of North Carolina, then offered two resolutions:
"1. That it is expedient for the whigs of the Senate and House of Representatives of the United States to publish an address to the people of the United States, containing a succinct exposition of the prominent proceedings of the extra session of Congress, of the measures that have been adopted, and those in which they have failed, and the causes of such failure; together with such other matters as may exhibit truly the condition of the whig party and whig prospects.
"2. That a committee of three on the part of the Senate, and five on the part of the House, be appointed to prepare such address, and submit it to a meeting of the whigs on Monday morning next, the 13th inst., at half past 8 o'clock."
Both resolutions were unanimously adopted, and Messrs. Berrien of Georgia, Tallmadge of New York, and Smith of Indiana were appointed on the part of the Senate; and Messrs. Everett of Vermont, Mason of Ohio, Kennedy of Maryland, John C. Clark of New York, and Rayner of North Carolina, on the part of the House.
At the appointed time the meeting reassembled, and the committee made their report. Much of it was taken up with views and recommendations in relation to the general policy of the party: it is only of what relates to the repudiation of Mr. Tyler that this history intends to speak: for government with us is a struggle of parties: and it is necessary to know how parties are put up, and put down, in order to understand how the government is managed. An opening paragraph of the address set forth that, for twelve years the whigs had carried on a contest for the regulation of the currency, the equalization of exchanges, the economical administration of the finances, and the advancement of industry--all to be accomplished by means of a national bank--declaring these objects to be misunderstood by no one--and the bank itself held to be secured in the presidential election, and its establishment the main object of the extra session. The address then goes on to tell how these cherished hopes were frustrated:
"It is with profound and poignant regret that we find ourselves called upon to invoke your attention to this point. Upon the great and leading measure touching this question, our anxious endeavors to respond to the earnest prayer of the nation have been frustrated by an act as unlooked for as it is to be lamented. We grieve to say to you that by the exercise of that power in the constitution which has ever been regarded with suspicion, and often with odium, by the people--a power which we had hoped was never to be exhibited on this subject, by a whig President--we have been defeated in two attempts to create a fiscal agent, which the wants of the country had demonstrated to us, in the most absolute form of proof, to be eminently necessary and proper in the present emergency. Twice have we, with the utmost diligence and deliberation, matured a plan for the collection, safe-keeping and disbursing of the public moneys through the agency of a corporation adapted to that end, and twice has it been our fate to encounter the opposition of the President, through the application of the veto power. The character of that veto in each case, the circumstances in which it was administered, and the grounds upon which it has met the decided disapprobation of your friends in Congress, are sufficiently apparent in the public documents and the debates relating to it. This subject has acquired a painful interest with us, and will doubtless acquire it with you, from the unhappy developments with which it is accompanied. We are constrained to say, that we find no ground to justify us in the conviction that the veto of the President has been interposed on this question solely upon conscientious and well-considered opinions of constitutional scruple as to his duty in the case presented. On the contrary, too many proofs have been forced upon our observation to leave us free from the apprehension, that the President has permitted himself to be beguiled into an opinion that, by this exhibition of his prerogative, he might be able to divert the policy of his administration into a channel which should lead to new political combinations, and accomplish results which must overthrow the present divisions of party in the country; and finally produce a state of things which those who elected him, at least, have never contemplated. We have seen from an early period of the session, that the whig party did not enjoy the confidence of the President. With mortification we have observed that his associations more sedulously aimed at a free communion with those who have been busy to prostrate our purposes, rather than those whose principles seemed to be most identified with the power by which he was elected. We have reason to believe that he has permitted himself to be approached, counselled and influenced by those who have manifested least interest in the success of whig measures. What were represented to be his opinions and designs have been freely and even insolently put forth in certain portions, and those not the most reputable, of the public press, in a manner that ought to be deemed offensive to his honor, as it certainly was to the feelings of those who were believed to be his friends. In the earnest endeavor manifested by the members of the whig party in Congress to ascertain specifically the President's notions in reference to the details of such a bill relating to a fiscal agent as would be likely to meet his approbation, the frequent changes of his opinion, and the singular want of consistency in his views, have baffled his best friends, and rendered the hope of adjustment with him impossible."
"The plan of an exchange bank, such as was reported after the first veto, the President is understood by more than one member of Congress to whom he expressed his opinion, to have regarded as a favorite measure. It was in view of this opinion, suggested as it is in his first veto, and after using every proper effort to ascertain his precise views upon it, that the committee of the House of Representatives reported their second bill. It made provision for a bank without the privilege of local discounting, and was adapted as closely as possible to that class of mercantile operations which the first veto message describes with approbation, and which that paper specifically illustrates by reference to the 'dealings in the exchanges' of the Bank of the United States in 1833, which the President affirms 'amounted to upwards of one hundred millions of dollars.' Yet this plan, when it was submitted to him, was objected to on a new ground. The last veto has narrowed the question of a bank down to the basis of the sub-treasury scheme, and it is obvious from the opinions of that message that the country is not to expect any thing better than the exploded sub-treasury, or some measure of the same character, from Mr. TYLER. In the midst of all these varieties of opinion, an impenetrable mystery seemed to hang over the whole question. There was no such frank interchange of sentiment as ought to characterize the intercourse of a President and his friends, and the last persons in the government who would seem to have been intrusted with his confidence on those embarrassing topics were the constitutional advisers which the laws had provided for him. In this review of the position into which the late events have thrown the whig party, it is with profound sorrow we look to the course pursued by the President. He has wrested from us one of the best fruits of a long and painful struggle, and the consummation of a glorious victory; he has even perhaps thrown us once more upon the field of political strife, not weakened in numbers, nor shorn of the support of the country, but stripped of the arms which success had placed in our hands, and left again to rely upon that high patriotism which for twelve years sustained us in a conflict of unequalled asperity, and which finally brought us to the fulfilment of those brilliant hopes which he has done so much to destroy."
Having thus shown the loss, by the conduct of the President, of all the main fruits of a great victory after a twelve years' contest, the address goes on to look to the future, and to inquire what is to be the conduct of the party in such unexpected and disastrous circumstances? and the first answer to that inquiry is, to establish a permanent separation of the whig party from Mr. Tyler, and to wash their hands of all accountability for his acts.
"In this state of things, the whigs will naturally look with anxiety to the future, and inquire what are the actual relations between the President and those who brought him into power; and what, in the opinion of their friends in Congress, should be their course hereafter. On both of these questions we feel it to be our duty to address you in perfect frankness and without reserve, but, at the same time, with due respect to others. In regard to the first, we are constrained to say that the President, by the course he has adopted in respect to the application of the veto power to two successive bank charters, each of which there was just reason to believe would meet his approbation; by his withdrawal of confidence from his real friends in Congress and from the members of his cabinet; by his bestowal of it upon others notwithstanding their notorious opposition to leading measures of his administration, has voluntarily separated himself from those by whose exertions and suffrages he was elevated to that office through which he reached his present exalted station. The existence of this unnatural relation is as extraordinary as the annunciation of it is painful and mortifying. What are the consequences and duties which grow out of it? The first consequence is, that those who brought the President into power can be no longer, in any manner or degree, justly held responsible or blamed for the administration of the executive branch of the government; and that the President and his advisers should be exclusively hereafter deemed accountable."
Then comes the consideration of what they are to do? and after inculcating, in the ancient form, the laudable policy of supporting their obnoxious President when he was 'right,' and opposing him when he was 'wrong'--phrases repeated by all parties, to be complied with by none--they go on to recommend courage and unity to their discomfited ranks--to promise a new victory at the next election; and with it the establishment of all their measures, crowned by a national bank.
"The conduct of the President has occasioned bitter mortification and deep regret. Shall the party, therefore, yielding to sentiments of despair, abandon its duty, and submit to defeat and disgrace? Far from suffering such dishonorable consequences, the very disappointment which it has unfortunately experienced should serve only to redouble its exertions, and to inspire it with fresh courage to persevere with a spirit unsubdued and a resolution unshaken, until the prosperity of the country is fully re-established, and its liberties firmly secured against all danger from the abuses, encroachments or usurpations of the executive department of the government."
This was the manifesto, so far as it concerns the repudiation of Mr. Tyler, which the whig members of Congress put forth: it was answered (under the name of an address to his constituents) by Mr. Cushing, in what may be called a counter manifesto: for it was on the same subject as the other, and counter to it at all points--especially on the fundamental point of, which party the President was to belong to! the manifesto of the whig members assigning him to the democracy--the counter manifesto claiming him for the whigs! In this, Mr. Cushing followed the lead of Mr. Webster in his letter of resignation: and, in fact, the whole of his pleading (for such it was) was an amplification of Mr. Webster's letter to the editors of the National Intelligencer, and of the one to Messrs. Bates and Choate, and of another to Mr. Ketchum, of New York. The first part of the address of Mr. Cushing, is to justify the President for changing his course on the fiscal corporation bill; and this attempted in a thrust at Mr Clay thus:
"A caucus dictatorship has been set up in Congress, which, not satisfied with ruling that body to the extinguishment of individual freedom of opinion, seeks to control the President in his proper sphere of duty, denounces him before you for refusing to surrender his independence and his conscience to its decree, and proposes, through subversion of the fundamental provisions and principles of the constitution, to usurp the command of the government. It is a question, therefore, in fact, not of legislative measures, but of revolution. What is the visible, and the only professed, origin of these extraordinary movements? The whig party in Congress have been extremely desirous to cause a law to be enacted at the late session, incorporating a national bank. Encountering, in the veto of the President, a constitutional obstacle to the enactment of such a law at the late session, a certain portion of the whig party, represented by the caucus dictatorship, proceeds then, in the beginning, to denounce the President. Will you concur in this denunciation of the President?"
This was the accusation, first hinted at by Mr. Rives in the Senate, afterwards obscurely intimated in Mr. Webster's letter to the two Massachusetts senators; and now broadly stated by Mr. Cushing; without, however, naming the imputed dictator; which was, in fact, unnecessary. Every body knew that Mr. Clay was the person intended; with what justice, not to repeat proofs already given, let the single fact answer, that these caucus meetings (for such there were) were all subsequent to Mr. Tyler's change on the bank question! and in consequence of it! and solely with a view to get him back! and that by conciliation until after the second veto. In this thrust at Mr. Clay Mr. Cushing was acting in the interest of Mr. Webster's feelings as well as those of Tyler; for since 1832 Mr. Clay and Mr. Webster had not been amicable, and barely kept in civil relations by friends, who had frequently to interpose to prevent, or compose outbreaks; and even to make in the Senate formal annunciation of reconciliation effected between them. But the design required Mr. Clay to be made the cause of the rejection of the bank bills; and also required him to be crippled as the leader of the anti-administration whigs. In this view Mr. Cushing resumes:
"When Lord Grenville broke up the whig party of England, in 1807, by the unseasonable pressure of some great question, and its consequent loss, 'Why,' said Sheridan, 'did they not put it off as Fox did? I have heard of men running their heads against a wall; but this is the first time I ever heard of men building a wall, and squaring it, and clamping it, for the express purpose of knocking out their brains against it.' This bon mot of Sheridan's will apply to the whig party in Congress, if, on account of the failure of the bank bill at the late session, they secede from the administration, and set up as a Tertium Quid in the government, neither administration nor opposition."
Having presented this spectacle of their brains beaten out against a wall of their own raising, if the whig party should follow Mr. Clay into opposition to the Tyler-Webster administration, Mr. Cushing took the party on another tack--that of the bird in the hand, which is worth two in the bush; and softly commences with them on the profit of using the presidential power while they had it:
"Is it wise for the whig party to throw away the actuality of power for the current four years? If so, for what object? For some contingent possibility four years hence? If so, what one? Is the contingent possibility of advancing to power four years hence any one particular man in its ranks, whoever he may be, and however eminently deserving, a sufficient object to induce the whig party to abdicate the power which itself as a body possesses now?"
And changing again, and from seduction to terror, he presents to them, as the most appalling of all calamities, the possible election of a democratic President at the next election through the deplorable divisions of the whig party.
"If so, will its abdication of power now tend to promote that object? Is it not, on the contrary, the very means to make sure the success of some candidate of the democratic party?"
Proceeding to the direct defence of the President, he then boldly absolves him from any violation of faith in rejecting the two bank bills. Thus:
"In refusing to sign those bills, then, he violated no engagement, and committed no act of perfidy in the sense of a forfeited pledge."
And advancing from exculpation to applause, he makes it an act of conscience in Mr. Tyler in refusing to sign them, and places him under the imperious command of a triple power--conscience, constitution, oath; without the faculty of doing otherwise than he did.
"But, in this particular, the President, as an upright man, could do no otherwise than he did. He conscientiously disapproved those bills. And the constitution, which he was sworn to obey, commands him, expressly and peremptorily commands him, if he do not approve of any bill presented to him for his signature, to return it to the House of Congress in which it originated. 'If he approve he shall sign it: if not, he SHALL return it,' are the words of the constitution. Would you as conscientious men yourselves, forbid the President of the United States to have a conscience?"
Acquittal of the President of all hand in the initiation of the second bill, is the next task of Mr. Cushing, and he boldly essays it.
"The President, it is charged, trifled with one or more of the retiring secretaries. Of what occurred at cabinet meetings, the public knows and can know nothing. But, as to the main point, whether he initiated the fiscal corporation bill. This idea is incompatible with the dates and facts above stated, which show that the consideration of a new bill was forced on the President by members of Congress. It is, also, incompatible with the fact that, on Tuesday, the 17th of August, as it is said by the Secretary of War, the President expressed to him doubt as to any bill."
Now what happened in these cabinet meetings is well known to the public from the concurrent statement of three of the secretaries, and from presidential declarations to members of Congress, and these statements cover the main point of the initiation of the second bill by the President himself; and that not on the 18th, but the 16th of August, and not only to his cabinet but to Mr. Stuart of Virginia the same evening; and that it was two days afterwards that the two members of Congress called upon him (Messrs. Sergeant and Berrien), not to force him to take a bill, but to be forced by him to run his own bill through in three days. Demurring to the idea that the President could be forced by members of Congress to adopt an obnoxious bill, the brief statement is, that it is not true. The same is to be said of the quoted remark of the Secretary at War, Mr. Bell, that the President expressed to him a doubt whether he would sign any bank bill--leaving out the astonishment of the Secretary at that declaration, who had been requested by the President the day before to furnish facts in favor of the bill; and who came to deliver a statement of these facts thus prepared, and in great haste, upon request; and when brought, received with indifference! and a doubt expressed whether he would sign any bill. Far from proving that the President had a consistent doubt upon the subject, which is the object of the mutilated quotation from Mr. Bell--it proves just the contrary! proves that the President was for the bill, and began it himself, on the 16th; and was laying an anchor to windward for its rejection on the 17th! having changed during the night.
The retirement of all the cabinet ministers but one, and that for such reasons as they gave, is treated by Mr. Cushing as a thing of no signification, and of no consequence to any body but themselves. He calls it a common fact which has happened under many administrations, and of no permanent consequence, provided good successors are appointed. All that is right enough where secretaries retire for personal reasons, such as are often seen; but when they retire because they impeach the President of great moral delinquency, and refuse to remain with him on that account, the state of the case is altered. He and they are public officers; and officers at the head of the government; and their public conduct is matter of national concern; and the people have a right to inquire and to know the public conduct of public men. The fact that Mr. Webster remained is considered as overbalancing the withdrawal of all the others; and is thus noticed by Mr. Cushing:
"And that, whilst those gentlemen have retired, yet the Secretary of State, in whose patriotism and ability you have more immediate cause to confide, has declared that he knows no sufficient cause for such separation, and continues to co-operate cordially with the President in the discharge of the duties of that station which he fills with so much honor to himself and advantage to the country."
Certainly it was a circumstance of high moment to Mr. Tyler that one of his cabinet remained with him. It was something in such a general withdrawing, and for such reasons as were given, and was considered a great sacrifice on the part of Mr. Webster at the time. As such it was well remembered a short time afterwards, when Mr. Webster, having answered the purposes for which he was retained, was compelled to follow the example of his old colleagues. The address of Mr. Cushing goes on to show itself, in terms, to be an answer to the address of the whig party--saying:
"Yet an address has gone forth from a portion of the members of Congress, purporting to be the unanimous act of a meeting of THE whigs of Congress, which, besides arraigning the President on various allegations of fact and surmises not fact, recommends such radical changes of the constitution."
The address itself of the whig party is treated as the work of Mr. Clay--as an emanation of that caucus dictatorship in Congress of which he was always the embodied idea. He says:
"Those changes, if effected, would concentrate the chief powers of government in the hands of that of which this document (the whig address) itself is an emanation, namely a caucus dictatorship of Congress."
This defence by Mr. Cushing, the letters of Mr. Webster, and all the writers in the interests of Mr. Tyler himself, signified nothing against the concurrent statements of the retiring senators, and the confirmatory statements of many members of Congress. The whig party recoiled from him. Instead of that "whig President, whig Congress, and whig people," formed into a unit, with the vision of which Mr. Webster had been induced to remain when his colleagues retired--instead of this unity, there was soon found diversity enough. The whig party remained with Mr. Clay; the whig Secretary of State returned to Massachusetts, inquiring, "where am I to go?" The whig defender of Mr. Tyler went to China, clothed with a mission; and returning, found that greatest calamity, the election of a democratic President, to be a fixed fact; and being so fixed, he joined it, and got another commission thereby: while Mr. Tyler himself, who was to have been the Roman cement of this whig unity, continued his march to the democratic camp--arrived there--knocked at the gate--asked to be let in: and was refused. The national democratic Baltimore convention would not recognize him.
LXXXVI. THE DANISH SOUND DUES
This subject was brought to the attention of the President at this extra session of Congress by a report from the Secretary of State, and by the President communicated to Congress along with his message. He did not seem to call for legislative action, as the subject was diplomatic, and relations were established between the countries, and the remedy proposed for the evil stated was simply one of negotiation. The origin and history of these dues, and the claims and acquiescences on which they rest, are so clearly and concisely set forth by Mr. Webster, and the amelioration he proposed so natural and easy for the United States, and the subject now acquiring an increasing interest with us, that I draw upon his report for nearly all that is necessary to be said of it in this chapter; and which is enough for the general reader. The report says:
"The right of Denmark to levy these dues is asserted on the ground of ancient usage, coming down from the period when that power had possession of both shores of the Belt and Sound. However questionable the right or uncertain its origin, it has been recognised by European governments, in several treaties with Denmark, some of whom entered into it at as early a period as the fourteenth century; and inasmuch as our treaty with that power contains a clause putting us on the same footing in this respect as other the most favored nations, it has been acquiesced in, or rather has not been denied by us. The treaty of 1645, between Denmark and Holland, to which a tariff of the principal articles then known in commerce, with a rule of measurement and a fixed rate of duty, was appended, together with a subsequent one between the same parties in 1701, amendatory and explanatory of the former, has been generally considered as the basis of all subsequent treaties, and among them of our own, concluded in 1826, and limited to continue ten years from its date, and further until the end of one year, after notice by either party of an intention to terminate it, and which is still in force.
"Treaties have also been concluded with Denmark, by Great Britain, France, Spain, Portugal, Russia, Prussia and Brazil, by which, with one or two exceptions in their favor, they are placed on the same footing as the United States. There has recently been a general movement on the part of the northern powers of Europe, with regard to the subject of these Sound dues, and which seems to afford to this government a favorable opportunity, in conjunction with them, for exerting itself to obtain some such alteration or modification of existing regulations as shall conduce to the freedom and extension of our commerce, or at least to relieve it from some of the burdens now imposed, which, owing to the nature of our trade, operate, in many instances, very unequally and unjustly on it in comparison with that of other nations.
"The ancient tariff of 1645, by which the payment of these dues was regulated, has never been revised, and by means of the various changes which have taken place in commerce since that period, and of the alteration in price in many articles therein included, chiefly in consequence of the settlement of America, and the introduction of her products, into general commerce, it has become quite inapplicable. It is presumed to have been the intention of the framers of that tariff to fix a duty of about one per centum ad valorem upon the articles therein enumerated, but the change in value of many of those commodities, and the absence of any corresponding change in the duty, has, in many instances, increased the ad valorem from one per centum to three, four, and even seven; and this, generally, upon those articles which form the chief exports of the United States, of South America, and the West India Islands: such as the articles of cotton, rice, raw sugar, tobacco, rum, Campeachy wood, &c. On all articles not enumerated in this ancient tariff it is stipulated by the treaty of 1701 that the 'privileged nations,' or those who have treaties with Denmark, shall pay an ad valorem of one per cent.; but the value of these articles being fixed by some rules known only to the Danish government, or at least unknown to us, this duty appears uncertain and fluctuating, and its estimate is very much left to the arbitrary discretion of the custom house officers at Elsinore.
"It has been, by some of the public writers in Denmark, contended that goods of privileged nations, carried in the vessels of unprivileged nations, should not be entitled to the limitation of one per centum ad valorem, but should be taxed one and a quarter per centum, the amount levied on the goods of unprivileged nations; and, also, that this limitation should be confined to the direct trade, so that vessels coming from or bound to the ports of a nation not in treaty with Denmark should pay on their cargoes the additional quarter per cent.
"These questions, although the former is not of so much consequence to us, who are our own carriers, are still in connection with each other, of sufficient importance to render a decision upon them, and a final understanding, extremely desirable. These Sound dues are, moreover, in addition to the port charges of light money, pass-money, &c., which are quite equal to the rates charged at other places, and the payment of which, together with the Sound dues, often causes to vessels considerable delay at Elsinore.
"The port charges, which are usual among all nations to whose ports vessels resort, are unobjectionable, except that, as in this case, they are mere consequences of the imposition of the Sound dues, following, necessarily, upon the compulsory delay at Elsinore of vessels bound up and down the Sound with cargoes, with no intention of making any importation into any port of Denmark, and having no other occasion for delay at Elsinore than that which arises from the necessity of paying the Sound dues, and, in so doing, involuntarily subjecting themselves to these other demands. These port duties would appear to have some reason in them, because of the equivalent; while, in fact, they are made requisite, with the exception, perhaps, of the expense of lights, by the delay necessary for the payment of the Sound dues.
"The amount of our commerce with Denmark, direct, is inconsiderable, compared with that of our transactions with Russia, Sweden, and the ports of Prussia, and the Germanic association on the Baltic; but the sum annually paid to that government in Sound dues, and the consequent port charges by our vessels alone, is estimated at something over one hundred thousand dollars. The greater proportion of this amount is paid by the articles of cotton, sugar, tobacco, and rice; the first and last of these paying a duty of about three per cent. ad valorem, reckoning their value at the places whence they come.
"By a list published at Elsinore, in 1840, it appears that between April and November of that year, seventy-two American vessels, comparatively a small number, lowered their topsails before the castle of Cronberg. These were all bound up the Sound to ports on the Baltic, with cargoes composed in part of the above-named products, upon which alone, according to the tariff, was paid a sum exceeding forty thousand dollars for these dues. Having disposed of these cargoes, they returned laden with the usual productions of the countries on the Baltic, on which, in like manner, were paid duties on going out through the Sound, again acknowledging the tribute by an inconvenient and sometimes hazardous ceremony. The whole amount thus paid within a period of eight months on inward and outward bound cargoes, by vessels of the United States, none of which were bound for, or intended to stop at, any port in Denmark, except compulsorily at Elsinore, for the purpose of complying with these exactions, must have exceeded the large sum above named."
This is the burden, and the history of it which Mr. Webster so succinctly presents. The peaceful means of negotiation are recommended to obtain the benefit of all the reductions in these dues which should be granted to other nations; and this natural and simple course is brought before the President in terms of brief and persuasive propriety.
"I have, therefore, thought proper to bring this subject before you at this time, and to go into these general statements in relation to it, which might be carried more into detail, and substantiated by documents now at the department, to the end that, if you should deem it expedient, instructions may be given to the representative of the United States at Denmark to enter into friendly negotiations with that government, with a view of securing to the commerce of the United States a full participation in any reduction of these duties, or the benefits resulting from any new arrangements respecting them which may be granted to the commerce of other states."
This is the view of an American statesman. No quarrelling, or wrangling with Denmark, always our friend: no resistance to duties which all Europe pays, and were paying not only before we had existence as a nation, but before the continent on which we live had been discovered: no setting ourselves up for the liberators of the Baltic Sea: no putting ourselves in the front of a contest in which other nations have more interest than ourselves. It is not even recommended that we should join a congress of European ministers to solicit, or to force, a reduction or abolition of these duties; and the policy of engaging in no entangling alliances, is well maintained in that abstinence from associated negotiation. The Baltic is a European sea. Great powers live upon its shores: other great powers near its entrance: and all Europe nearer to it than ourselves. The dues collected at Elsinore present a European question which should be settled by European powers, all that we can ask being (what Denmark has always accorded) the advantage of being placed on the footing of the most favored nation. We might solicit a further reduction of the dues on the articles of which we are the chief carriers to that sea--cotton, rice, tobacco, raw sugar; but solicit separately without becoming parties to a general arrangement, and thereby making ourselves one of its guarantees. Negotiate separately, asking at the same time to be continued on the footing of the most favored nation. This report and recommendation of Mr. Webster is a gem in our State papers--the statement of the case condensed to its essence, the recommendation such as becomes our geographical position and our policy; the style perspicuous, and even elegant in its simplicity.
I borrow from the Boston Daily Advertiser (Mr. Hale the writer) a condensed and clear account of the success of Mr. Webster's just and wise recommendations on this subject:
"He recommended that 'friendly negotiations' be instituted with the Danish government, 'with a view to securing to the United States a full participation in any reduction of these duties, or the benefits resulting from any new arrangements respecting them, which may be granted to the commerce of other states.'
"This recommendation was doubtless adopted; for the concluding papers of the negotiation appear among the documents communicated to Congress. The Danish government made a complete revision of the ancient tariff, establishing new specific duties on all articles of commerce, with one or two exceptions, in which the one per cent. ad valorem duty was retained.
"The duties were not increased in any instance, and on many of the articles they were largely reduced; on some of them as large a discount as 83 per cent. was made, and a great number were reduced 50 per cent. Of the articles particularly mentioned by Mr. Webster as forming the bulk of the American commerce paying these duties, the duty on raw sugar was reduced from 9 stivers on 100 pounds to 5 stivers; on rice (in paddy) the duty was reduced from 15 stivers to 6 stivers. On some other articles of importance to American commerce the duties were reduced in a larger proportion; on some dyewoods the reduction was from 30 stivers to 8, and on others from 36 to 12, per thousand pounds; and on coffee the reduction was from 24 to 6 stivers per 100 pounds, thereby making it profitable to ship this article directly up the Baltic, instead of to Hamburgh, and thence by land across to Lubec, which had previously been done to avoid the Sound dues.
"It was also provided that no unnecessary formalities should be required from the vessels passing through the Sound. The lowering of top-sails, complained of by Mr. Webster, was dispensed with. We mention this circumstance because a recent article in the New York Tribune speaks of this formality as still required. It was abolished thirteen years ago. A number of other accommodations were also granted on the part of Denmark in modification of the harshness of former regulations. The time for the functionaries to attend at their offices was prolonged, and an evident disposition was manifested to make great abatements in the rigor of enforcing as well as in the amount of the tax.
"These concessions were regarded as eminently favorable, and as satisfactory to the United States. Mr. Webster cordially expressed this sentiment in a letter to Mr. Isaac Rand Jackson, then our Chargé d'Affaires for Denmark, bearing date June 25, 1842, and also in another letter, two days later, to Mr. Steen Billé, the Danish Chargé d'Affaires in the United States. In the former letter Mr. Webster praised Mr. Jackson's 'diligence and fidelity in discharging his duties in regard to this subject.'"
Greatly subordinate as the United States are geographically in this question, they are equally, and in fact, duly and proportionably so in interest. Their interest is in the ratio of their distance from the scene of the imposition; that is to say, as units are to hundreds, and hundreds to thousands. Taking a modern, and an average year for the number of vessels of different powers which passed this Sound and paid these duties--the year 1850--and the respective proportions stand thus: English, 5,448 vessels; Norwegian, 2,553; Swedish, 1,982; Dutch, 1,900; Prussian, 2,391; Russian, 1,138; American, 106--being about the one-fiftieth part of the English number, and about the one-twentieth part of the other powers. But that is not the way to measure the American interest. The European powers aggregately present one interest: the United States sole another: and in this point of view the proportion of vessels is as two hundred to one. The whole number of European vessels in a series of five years--1849 to 1853--varied from 17,563 to 21,586; the American vessels during the same years varying from 76 to 135. These figures show the small comparative interest of the United States in the reduction, or abolition of these dues--large enough to make the United States desirous of reduction or abolition--entirely too small to induce her to become the champion of Europe against Denmark: and, taken in connection with our geographical position, and our policy to avoid European entanglement, should be sufficient to stamp as Quixotic, and to qualify as mad, any such attempt.
LXXXVII. LAST NOTICE OF THE BANK OF THE UNITED STATES
For ten long years the name of this bank had resounded in the two Halls of Congress. For twenty successive sessions it had engrossed the national legislature--lauded, defended, supported--treated as a power in the State: and vaunted as the sovereign remedy for all the diseases to which the finances, the currency, and the industry of the country could be heir. Now, for the first time in that long period, a session passed by--one specially called to make a bank--in which the name of that institution was not once mentioned: never named by its friends! seldom by its foes. Whence this silence? Whence this avoidance of a name so long, so lately, and so loudly invoked? Alas! the great bank had run its career of audacity, crime, oppression, and corruption. It was in the hands of justice, for its crimes and its debts--was taken out of the hands of its late insolvent directory--placed in the custody of assignees--and passed into a state of insolvent liquidation. Goaded by public reproaches, and left alone in a state of suspension by other banks, she essayed the perilous effort of a resumption. Her credit was gone. It was only for payment that any one approached her doors. In twenty days she was eviscerated of six millions of solid dollars, accumulated by extraordinary means, to enable her to bid for a re-charter at the extra session. This was the last hope, and which had been resolved upon from the moment of General Harrison's election. She was empty. The seventy-six millions of assets, sworn to the month before, were either undiscoverable, or unavailable. The shortest month in the year had been too long for her brief resources. Early in the month of February, her directory issued a new decree of suspension--the third one in four years; but it was in vain to undertake to pass off this stoppage for a suspension. It was felt by all to be an insolvency, though bolstered by the usual protestations of entire ability, and firm determination to resume briefly. An avalanche of suits fell upon the helpless institution, with judgments carrying twelve per cent. damages, and executions to be levied on whatever could be found. Alarmed at last, the stockholders assembled in general meeting, and verified the condition of their property. It was a wreck! nothing but fragments to be found, and officers of the bank feeding on these crumbs though already gorged with the spoils of the monster.
A report of the affairs of the institution was made by a committee of the stockholders: it was such an exhibition of waste and destruction, and of downright plundering, and criminal misconduct, as was never seen before in the annals of banking. Fifty-six millions and three quarters of capital out of sixty-two millions and one quarter (including its own of thirty-five) were sunk in the limits of Philadelphia alone: for the great monster, in going down, had carried many others along with her; and, like the strong man in Scripture, slew more in her death than in her life. Vast was her field of destruction--extending all over the United States--and reaching to Europe, where four millions sterling of her stock was held, and large loans had been contracted. Universally on classes the ruin fell--foreigners as well as citizens--peers and peeresses, as well as the ploughman and the wash-woman--merchants, tradesmen, lawyers, divines: widows and orphans, wards and guardians: confiding friends who came to the rescue: deceived stockholders who held on to their stock, or purchased more: the credulous masses who believed in the safety of their deposits, and in the security of the notes they held--all--all saw themselves the victims of indiscriminate ruin. An hundred millions of dollars was the lowest at which the destruction was estimated; and how such ruin could be worked, and such blind confidence kept up for so long a time, is the instructive lesson for history: and that lesson the report of the stockholders' committee enables history to give.
From this authentic report it appears that from the year 1830 to 1836--the period of its struggles for a re-charter--the loans and discounts of the bank were about doubled--its expenses trebled. Near thirty millions of these loans were not of a mercantile character--neither made to persons in trade or business, nor governed by the rules of safe endorsement and punctual payment which the by-laws of the institution, and the very safety of the bank, required; nor even made by the board of directors, as the charter required; but illegally and clandestinely, by the exchange committee--a small derivation of three from the body of the committee, of which the President of the bank was ex officio a member, and the others as good as nominated by him. It follows then that these, near thirty millions of loans, were virtually made by Mr. Biddle himself; and in violation of the charter, the by-laws and the principles of banking. To whom were they made? To members of Congress, to editors of newspapers, to brawling politicians, to brokers and jobbers, to favorites and connections: and all with a view to purchase a re-charter, or to enrich connections, and exalt himself--having the puerile vanity to delight in being called the "Emperor Nicholas." Of course these loans were, in many instances, not expected to be returned--in few so secured as to compel return: and, consequently, near all a dead loss to the stockholders, whose money was thus disposed of.
The manner in which these loans were made to members of Congress, was told to me by one of these members who had gone through this process of bank accommodation; and who, voting against the bank, after getting the loan, felt himself free from shame in telling what had been done. He needed $4,000, and could not get it at home: he went to Philadelphia--to the bank--inquired for Mr. Biddle--was shown into an ante-room, supplied with newspapers and periodicals; and asked to sit, and amuse himself--the president being engaged for the moment. Presently a side door opened. He was ushered into the presence--graciously received--stated his business--was smilingly answered that he could have it, and more if he wished it: that he could leave his note with the exchange committee, and check at once for the proceeds: and if inconvenient to give an indorser before he went home, he could do it afterwards: and, whoever he said was good, would be accepted. And in telling me this, the member said he could read "bribery" in his eyes.
The loans to brokers to extort usury upon--to jobbers, to put up and down the price of stocks--to favorites, connections, and bank officers, were enormous in amount, indefinite in time, on loose security, or none: and when paid, if at all, chiefly in stocks at above their value. The report of the committee thus states this abuse:
"These loans were generally in large amounts. In the list of debtors on 'bills receivable' of the first of January 1837, twenty-one individuals, firms and companies, stand charged, each with an amount of one hundred thousand dollars and upwards. One firm of this city received accommodations of this kind between August 1835, and November 1837, to the extent of 4,213,878 dollars 30 cents--more than half of which was obtained in 1837. The officers of the bank themselves received in this way, loans to a large amount. In March 1836, when the bank went into operation, under its new charter, Mr. Samuel Jaudon, then elected its principal cashier, was indebted to it, 100,500 dollars. When he resigned the situation of cashier, and was appointed foreign agent, he was in debt 408,389 dollars 25 cents; and on the first of March 1841, he still stood charged with an indebtedness of 117,500 dollars. Mr. John Andrews, first assistant cashier, was indebted to the bank in March 1836, 104,000 dollars. By subsequent loans and advances made during the next three years, he received in all, the sum of 426,930 dollars 67 cents. Mr. Joseph Cowperthwaite, then second assistant cashier, was in debt to the bank in March 1836, 115,000 dollars; when he was appointed cashier in September, 1837, 326,382 dollars 50 cents: when he resigned, and was elected a director by the board, in June 1840, 72,860 dollars, and he stands charged March 3, 1841, on the books with the sum of 55,081 dollars 95 cents. It appears on the books of the bank, that these three gentlemen were engaged in making investments on their joint accounts, in the stock and loan of the Camden and Woodbury railroad company Philadelphia, Wilmington, and Baltimore railroad company, Dauphin and Lycoming coal lands, and Grand Gulf railroad and banking company."
These enormous loans were chiefly in the year 1837, at the time when the bank stopped payment on account of the "specie circular," the "removal of the deposits," and other alleged misdoings of the democratic administrations: and this is only a sample of the way that the institution went on during that period of fictitious distress, and real oppression--millions to brokers and favorites, not a dollar to the man of business.
Two agencies were established in London--one for the bank, under Mr. Jaudon, to borrow money; the other for a private firm, of which Mr. Biddle was partner, and his young son the London head--its business being to sell cotton, bought with the dead notes of the old bank. Of the expenses and doings of these agencies, all bottomed upon the money of the stockholders (so far as it was left), the committee gave this account:
"When Mr. Jaudon was elected to the place of foreign agent, he was the principal cashier, at a salary of 7,000 dollars per annum. The bank paid the loss on the sale of his furniture, 5,074 dollars, and the passage of himself and family to London, a further sum of 1,015 dollars. He was to devote himself exclusively to the business of the bank, to negotiate an uncovered credit in England, to provide for the then existing debt in Europe, to receive its funds, to pay its bills and dividends, to effect sales of stocks, and generally to protect the interests of the bank and 'the country at large.' For these services he was to receive the commission theretofore charged and allowed to Baring Brothers & Company, equal to about 28,000 dollars per annum. In addition to which, the expenses of the agency were allowed him, including a salary of 1,000 pounds sterling to his brother, Mr. Charles B. Jaudon, as his principal clerk. From the increase of money operations, arising from facilities afforded by the agency, the amount upon which commissions were charged was greatly augmented, so that the sums paid him for his country services up to January, 1841, amounted at nine per cent. exchange to 178,044 dollars 47 cents, and the expenses of the agency to 35,166 dollars 99 cents. In addition to these sums, he was allowed by the exchange committee, an extra commission of one per cent. upon a loan effected in October, 1839, of 800,000 pounds, say $38,755 56; and upon his claim for a similar commission, upon subsequent loans in France and Holland, to the amount of $8,337,141 90, the board of directors, under the sanction of a legal opinion, from counsel of high standing, and the views of the former president, by whom the agreement with Mr. Jaudon was made, that the case of extraordinary loans was not anticipated, nor meant to be included in the original arrangement, allowed the further charge of $83,970 37. These several sums amount to $335,937, 39, as before stated."
A pretty expensive agency, although the agent was to devote himself exclusively to the business of the bank, protecting its interests, and those of "the country at large"--an addition to his mission, this protection of the country at large, which illustrates the insolent pretensions of this imperious corporation. Protect the country at large! while plundering its own stockholders of their last dollar. And that furniture of this bank clerk! the loss on the sale of which was $5,074! and which loss the stockholders made up: while but few of them had that much in their houses. The whole amount of loans effected by this agency was twenty-three millions of dollars; of which a considerable part was raised upon fictitious bills, drawn in Philadelphia without funds to meet them, and to raise money to make runs upon the New York banks, compel them to close again: and so cover her own insolvency in another general suspension: for all these operations took place after the suspension of 1837. The committee thus report upon these loans, and the gambling in stock speculations at home:
"Such were some of the results of the resolution of March, 1835, though it cannot be questioned, that much may be fairly attributed to the unhappy situation of the business and exchanges of the country, concurring with the unfortunate policy pursued by the administration of the bank. Thus the institution has gone on to increase its indebtedness abroad, until it has now more money borrowed in Europe, than it has on loan on its list of active debt in America. To this has been superadded, extensive dealing in stocks, and a continuation of the policy of loaning upon stock securities, though it was evidently proper upon the recharter, that such a policy should be at once and entirely abandoned. Such indeed was its avowed purpose, yet one year afterwards, in March, 1837, its loans on stocks and other than personal security had increased $7,821,541, while the bills discounted on personal security, and domestic exchange had suffered a diminution of $9,516,463 78. It seems to have been sufficient, to obtain money on loan, to pledge the stock of an 'incorporated company,' however remote its operation or uncertain its prospects. Many large loans originally made on a pledge of stocks, were paid for in the same kind of property, and that too at par, when in many instances they had become depreciated in value. It is very evident to the committee, that several of the officers of the bank were themselves engaged in large operations in stocks and speculations, of a similar character, with funds obtained of the bank, and at the same time loans were made to the companies in which they were interested, and to others engaged in the same kind of operations, in amounts greatly disproportionate to the means of the parties, or to their proper and legitimate wants and dealings. The effect of this system, was to monopolize the active means of the institution, and disable it from aiding and accommodating men engaged in business really productive and useful to the community; and as might have been anticipated, a large part of the sums thus loaned were ultimately lost, or the bank compelled, on disadvantageous terms as to price, to take in payment stocks, back lands and other fragments of the estates of great speculators."
The cotton agency seemed to be an ambidextrous concern--both individual and corporation--its American office in the Bank of the United States--the purchases made upon ten millions of its defunct notes--the profits going to the private firm--the losses to the bank. The committee give this history:
"In the course of the investigation the attention of the committee has been directed to certain accounts, which appear on the books as 'advances on merchandise,' but which were, in fact, payments for cotton, tobacco and other produce, purchased by the direction of the then President, Mr. Nicholas Biddle, and shipped to Europe on account of himself and others. These accounts were kept by a clerk in the foreign exchange department, this department being under the charge of Mr. Cowperthwaite, until September 22, 1837, when he was elected cashier, and of Mr. Thomas Dunlap, until March 20, 1840, when he was chosen president. The original documents, necessary to enable the committee to arrive at all the facts in relation to these transactions, were not accessible, having been retained, as was supposed, by the parties interested, as private papers. A succinct view of the whole matter, sufficient to convey to the stockholders a general idea of its character, may be drawn from the report of a committee of the board of directors, appointed on the 21st of July, 1840, for the purpose of adjusting and settling these accounts, and who reported on the 21st of December, 1840, which report with the accompanying accounts, is spread at large upon the minutes. The first transactions were in July, 1837, and appear as advances, to A. G. Jaudon, to purchase cotton for shipment to Baring Brothers & Co. of Liverpool, the proceeds to be remitted to their house in London, then acting as the agents of the bank. The amount of these shipments was 2,182,998 dollars 28 cents. The proceeds were passed to the credit of the bank, and the account appears to be balanced. The results, as to the profit and loss, do not appear, and the committee had no means of ascertaining them, nor the names of the parties interested. In the autumn of 1837, when the second of these transactions commenced, it will be recollected, that Mr. Samuel Jaudon had been appointed the agent of the bank to reside in London. About the same time, a co-partnership was formed between Mr. May Humphreys, then a director of the bank, and a son of Mr. Nicholas Biddle, under the firm of Biddle & Humphreys. This house was established at Liverpool, and thenceforward acted as agents for the sale of the produce shipped to that place which comprised a large proportion of the whole amount. In explanation of these proceedings, the committee annex to their report a copy of a letter dated Philadelphia, December 28, 1840, to the president and directors of the bank, from Mr. Joseph Cabot, one of the firm of Bevan & Humphreys, and who became a director at the election in January, 1838. This letter was read to the board, December 29, 1840, but was not inserted on the minutes.
"This arrangement continued during the years 1837, 1838 and 1839, the transactions of which amounted to 8,969,450 dollars 95 cents. The shipments were made principally to Biddle and Humphreys, were paid for by drafts on Bevan and Humphreys--the funds advanced by the bank, and the proceeds remitted to Mr. Samuel Jaudon, agent of the bank in London. It appears that there was paid to Messrs. Bevan and Humphreys by the bank in Philadelphia during the months of March, April, and May, 1839, the sum of eight hundred thousand dollars, and the account was thus balanced. The committee have reason to believe, that this sum constituted a part or perhaps the whole of the profits derived from the second series of shipments. How, and among whom, it was distributed, they have not been informed, but from the terms of the final settlement, to be adverted to presently, each one will be at liberty to make his own inferences. The third and last account, amounting to 3,241,042 dollars 83 cents, appears on the books, as 'bills on London, advances S. V. S. W.' These letters stand for the name of S. V. S. Wilder, of New York.--Messrs. Humphreys and Biddle, to whom these consignments were made, continued their accounts in the name of Bevan and Humphreys, but without the knowledge of that firm, as appears by Mr. Cabot's letter of December 28, 1840. The result of these last shipments, was a loss of 962,524 dollars 13 cents. Of this amount the sum of 553,908 dollars 57 cents was for excess of payments by Messrs. Humphreys and Biddle to the London agency, beyond the proceeds of sale, with interest thereon. The parties interested, claimed and were allowed a deduction for loss on 526,000 dollars of southern funds, used in the purchase of cotton, when at a discount, the sum of 310,071 dollars 30 cents; and also this sum, being banker's commission to Messrs. Humphreys and Biddle on advances to Samuel Jaudon, agent, 21,061 dollars 86 cents, making 331,133 dollars 16 cents, and leaving to be settled by the parties the sum of 631,390 dollars 97 cents."
Thus, the profit of eight hundred thousand dollars on the first shipments of cotton went to this private firm, though not shown on the books to whom; and the loss of nine hundred and sixty-two thousand five hundred and twenty-four dollars and thirteen cents on the last shipments went to the bank; but this being objected to by some of the directors, it was settled by Mr. Biddle and the rest--the bank taking from them stocks, chiefly of Texas, at par--the sales of the same being slow at a tithe of their face. The bank had also a way of guaranteeing the individual contracts of Mr. Biddle for millions; of which the report gives this account:
"Upon the eighteenth day of August, 1838, the bank guaranteed a contract made by Mr. Nicholas Biddle in his individual capacity, for the purchase of two thousand five hundred bonds of the State of Mississippi, of two thousand dollars each, amounting in the whole to 5,000,000 dollars. The signature of Mr. Thomas Dunlap, then second assistant cashier, was affixed to the guarantee, in behalf of the bank, upon the verbal authority of the president. Upon the 29th of January, 1839, the bank guaranteed to the State of Michigan, the punctual fulfilment of the obligations of the Morris canal and banking company, for the purchase of bonds of that state, to the extent of 3,145,687 dollars 50 cents. for 2,700,000 taken at par, and including interest on the instalments payable every three months up to January, 1843. On the 29th of April, 1839, the bank guaranteed a contract entered into by Mr. Thomas Dunlap in his individual capacity for the purchase of one million of dollars of the 'Illinois and Michigan canal stock.' In regard to these transactions, the committee can find no authority on the minutes of the board, and have been referred to none, by the president, upon whom they called for information."
Unintelligible accounts of large amounts appeared in the profit and loss side of the bank ledger; which, not explaining themselves, the parties named as receiving the money, were called upon for explanations--which they refused to give. Thus:
"In this last account there is a charge under date of June 30, 1840, of $400,000 to 'parent bank notes account,' which has not been explained to the satisfaction of the committee. It must be also mentioned, that among the expenditures of the bank, there is entered, at various dates, commencing May 5, 1836, sums amounting in all to 618,640 dollars 15 cents, as paid on the 'receipts of Mr. N. Biddle,' of 'Mr. N. Biddle and J. Cowperthwaite,' and 'cashier's vouchers.' As the committee were unable to obtain satisfactory information upon the subject of these expenses from the books or officers of the bank, application was made by letter to Mr. N. Biddle and Mr. J. Cowperthwaite, from whom no reply has been received."
These enormous transactions generally without the knowledge of the directory, usually upon the initials of a member of the exchange committee; and frequently upon a deposit of stock in the cash drawer. Besides direct loans to members of Congress, and immense fees, there was a process of entertainment for them at immense expense--nightly dinners at hotels--covers for fifty: and the most costly wines and viands: and this all the time. Besides direct applications of money in elections, the bank became a fountain of supply in raising an election fund where needed, taking the loss on itself. Thus, in 1833, in the presidential election in Kentucky, some politicians went into the branch bank at Lexington, assessed the party in each county for the amount wanted in that county--drew drafts for the amount of the assessment on some ardent friends in the county, received the cash for the drafts from the bank, and applied it to the election--themselves not liable if the assessment was not paid, but the same to go to the profit and loss account of the bank. In such operations as all these, and these are not all, it was easy for the bank to be swallowed up: and swallowed up it was totally.
The losses to the stockholders were deplorable, and in many instances attended with circumstances which aggravated the loss. Many were widows and children, their all invested where it was believed to be safe; and an ascertained income relied on as certain, with eventual return of the capital. Many were unfortunately deceived into the purchase or retention of stock, by the delusive bank reports. The makers of these reports themselves held no quantity of the stock--only the few shares necessary to qualify them for the direction. Foreign holders were numerous, attracted by the, heretofore, high credit of American securities, and by the implications of the name--Bank of the United States; implying a national ownership, which guaranteed national care in its management, and national liability on its winding up. Holland, England, France suffered, but the English most of all the foreigners. The London Banker's Circular thus described their loss:
"The proportion of its capital held by British subjects is nearly four millions sterling; it may be described as an entire loss. And the loss we venture, upon some consideration, to say is greater than the aggregate of all the losses sustained by the inhabitants of the British Islands, from failure of banks in this country, since Mr. Patterson established the banks of England and Scotland at the close of the seventeenth century. The small population of Guernsey and Jersey hold £200,000 of the stock of this U. States Bank. Call it an entire loss, and it is equal to a levy of three or four pounds on every man, woman, and child in the whole community of those islands--a sum greater than was ever raised by taxation in a single year on any people in the whole world. Are these important facts? if facts they be. Then let statesmen meditate upon them, for by their errors and reckless confidence in delusive theories they have been produced."
The credit of the bank, and the price of stock was kept up by delusive statements of profits, and fictitious exhibition of assets and false declarations of surpluses. Thus, declaring a half-yearly dividend of four per centum, January 1st, 1839, with a surplus of more than four millions; on the first of July of the same year, another half-yearly dividend of four per centum, with a surplus of more than four millions; on the 15th of January, the same year, announcing a surplus of three millions; and six weeks thereafter, on the first of January, announcing a surplus of five millions; while the assets of the bank were carried up to seventy-six millions. In this way credit was kept up. The creating of suspensions--that of 1837, and subsequent--cost immense sums, and involved the most enormous villainy; and the last of these attempts--the run upon the New York banks to stop them again before she herself stopped for the last time--was gigantically criminal, and ruinous to itself. Mr. Joseph Cowperthwaite (perfectly familiar with the operation) describes it to the life, and with the indifference of a common business transaction. Premising that a second suspension was coming on, it was deemed best (as in the first one of 1837) to make it begin in New York; and the operation for that purpose is thus narrated:
"After the feverish excitement consequent on this too speedy effort to return to cash payments had in a good degree subsided, another crisis was anticipated, and it was feared that the banks generally would be obliged again to suspend. This was, unhappily, too soon to be realized, for the storm was then ready to burst, but, instead of meeting its full force at once, it was deemed best to make it fall first upon the banks of New York. To effect this purpose, large means were necessary, and to procure these, resort was had to the sale of foreign exchange. The state of the accounts of the bank with its agents abroad did not warrant any large drafts upon them, especially that of the Messrs. Hottinguer in Paris. This difficulty, however, it was thought might be avoided, by shipping the coin to be drawn from the New York banks immediately to meet the bills. Accordingly, large masses of exchange, particularly bills on Paris, which were then in great demand, were sent to New York to be sold without limit. Indeed, the bills were signed in blank, and so sent to New York; and although a large book was thus forwarded, it was soon exhausted, and application was made to the agent of the Paris house in New York for a further supply, who drew a considerable amount besides. The proceeds of these immense sales of exchange created very heavy balances against the New York banks, which, after all, signally failed in producing the contemplated effect. The bills not being provided for, nor even regularly advised, as had uniformly been the custom of the bank, were dishonored; and although the agent in London did every thing which skill and judgment could accomplish, the credit of the bank was gone, and from that day to the present its effects upon the institution have been more and more disastrous."
"Deemed best to make the storm fall first upon the banks of New York;" and for that purpose to draw bills without limit, without funds to meet them, in such rapid succession as to preclude the possibility of giving notice--relying upon sending the gold which they drew out of the New York banks to Paris, to meet the same bills (all the while laying that exportation of gold to the wickedness of the specie circular), and failing to get the money there as fast as these "race-horse" bills went--they returned dishonored--came rolling back by millions, protested in Paris, to be again protested in Philadelphia. Then the bubble burst. The credit which sustained the monster was gone. Ruin fell upon itself, and upon all who put their trust in it; and certainly this last act, for the criminality of its intent and the audacity of its means, was worthy to cap and crown the career of such an institution.
It was the largest ruin, and the most criminal that has been seen since the South Sea and Mississippi schemes; yet no one was punished, or made to refund. Bills of indictment were found by the grand jury of the county of Philadelphia against Nicholas Biddle, Samuel Jaudon, and John Andrews, for a conspiracy to defraud the stockholders in the bank; and they were arrested, and held to bail for trial. But they surrendered themselves into custody, procured writs of habeas corpus for their release; and were discharged in vacation by judges before whom they were brought. It has been found difficult in the United States to punish great offenders--much more so than in England or France. In the cases of the South Sea and Mississippi frauds, the principal actors, though men of high position, were criminally punished, and made to pay damages. While these delinquencies were going on in the Bank of the United States, an eminent banker of London--Mr. Fauntleroy--was hanged at Tyburn, like a common felon--for his bank misdeeds: and while some plundered stockholders are now (autumn of 1855) assembled in Philadelphia, searching in vain for a shilling of their stock, three of the greatest bankers in London are receiving sentence of transportation for fourteen years for offences, neither in money nor morals, the hundredth part of the ruin and crime perpetrated by our American bank--bearing the name of the United States. The case presents too strong a contrast, and teaches too great a lesson to criminal justice to be omitted; and here it is:
"The firm had been in existence for nearly two centuries. The two elder partners of the firm had been distinguished for munificent charities, for an advocacy of great moral reforms, and an active participation in the religious or philanthropic measures of the day. They had always been liberal givers, had presided at Exeter Hall meetings, built chapels, and generally acted the part of liberal and useful members of society; and one of them, Sir John Dean Paul, was a baronet by descent, and allied to some of the highest nobility of England. He was first cousin to the present Lord Ravensworth, the honorable Augustus and Adolphus Liddell, the rector of St. Paul's, Knightsbridge, the Countess of Hardwicke, Viscountess Barrington, Lady Bloomfield; and, above all, the honorable Mrs. Villiers, sister-in-law to the Earl of Clarendon. These connections, however, in a country where rank and social position have peculiar influence, did not save them from a criminal trial and utter disgrace. One of their customers, in obedience to what he believed to be a duty to society, having personally inquired into the affairs of the firm, proceeded to lay a criminal information against Messrs. Strahan, Paul, and Bates, which led to their indictment and subsequent trial before the criminal court. This gentleman was the Rev. Dr. Griffith, Prebendary of Rochester, a wealthy ecclesiastic and a personal friend of all the partners of the firm, with which he had been a large depositor for many years. On the twenty-fifth of October the trial came on before Mr. Baron Alderson, assisted by Baron Martin and Justice Willes. The defendants appeared in court, attended by Sir Frederick Thesiger, Mr. Ballantyne, Sergeant Byles, and other almost equally eminent counsel. The Attorney-general appeared for the prosecution, and the evidence adduced at the trial, disclosed the following facts: Dr. Griffith, the prosecutor in the proceedings, and who, at the time of the failure of the defendants, had money and securities on deposit with them to the amount of £22,000, about five years ago empowered them to purchase for him on three different occasions, Danish five per cent. bonds to the value of £5,000. The defendants purchased the bonds, upon which they regularly received the dividends, and credited Dr. Griffith with the same on their books. This continued until March, 1854, when Sir John D. Paul, to relieve the embarrassments under which the firm were laboring, sold these securities, together with others with which they were entrusted, and appropriated the proceeds, amounting to over £12,000, to the use of the firm. This, as we have stated, was no offence at common law, and the indictment was preferred upon a statutory provision found in the 7th and 8th of George IV., cap. 29. The rigid severity of the penal law in England on this subject will be better appreciated when we add, that the bonds were replaced by others of equal value, in the June following their misappropriation, just one year previous to the failure of the firm; and that the indictment only charged the defendants with misappropriating them in this single instance, although it was shown that the second set of bonds were again sold for the use of the firm in April, 1855; Dr. Griffith having, in the interval, regularly received his dividends; so that, although the firm might be perfectly solvent at this moment, the fact that they had sold the bonds in March, 1851, even if they had replaced them in June, 1854, and had credited Dr. Griffith with the dividends on them between those dates, would still render them liable to an indictment. The case, therefore, overlooking the final misappropriation of the bonds, and the failure of the firm in 1855, was narrowed down to the single issue--whether they had been sold in 1854 without the consent of Dr. Griffith."
For misappropriating sixty thousand dollars of one of their customers--using it without his consent--these three great London bankers were sentenced to fourteen years' transportation: for misappropriating thirty-five millions, and sinking twenty-one millions more in other institutions, the wrong-doers go free in the United States--giving some countenance among us to the sarcasm of the Scythian philosopher, that laws are cobwebs which catch the weak flies, and let the strong ones break through. The Judge (Mr. Baron Alderson) who tried this case (that of the three London bankers), had as much heart and feeling as any judge, or man ought to have; but he also had a sense of his own duty, and of his obligations to the laws, and to the country; and in sentencing men of such high position, and with whom he had been intimate and social, he combined in the highest degree the feelings of a man with the duties of the judge. He said to the prisoners:
"William Strahan, Sir John Dean Paul, and Robert Makin Bates, the jury have now found you guilty of the offence charged upon you in the indictment--the offence of disposing of securities which were entrusted by your customers to you as bankers, for the purpose of being kept safe for their use, and which you appropriated, under circumstances of temptation, to your own. A greater and more serious offence can hardly be imagined in a great commercial city like this. It tends to shake confidence in all persons in the position you occupied, and it has shaken the public confidence in establishments like that you for a long period honorably conducted. I do very, very much regret that it falls to my lot to pass any sentence on persons in your situation; but yet the public interest and public justice require it; and it is not for me to shrink from the discharge of any duty, however painful, which properly belongs to my office. I should have been very glad, if it had pleased God that some one else now had to discharge that duty. I have seen (continued the learned judge, with deep emotion) at least one of you under very different circumstances, sitting at my side in high office, instead of being where you now are, and I could scarcely then have fancied to myself that it would ever come to me to pass sentence on you. But so it is, and this is a proof, therefore, that we all ought to pray not to be led into temptation. You have been well educated, and held a high position in life, and the punishment which must fall on you will consequently be the more seriously and severely felt by you, and will also greatly affect those connected with you, who will most sensitively feel the disgrace of your position. All that I have to say is, that I cannot conceive any worse case of the sort arising under the act of Parliament, applicable to your offence. Therefore, as I cannot conceive any worse case under the act, I can do nothing else but impose the sentence therein provided for the worst case, namely, the most severe punishment, which is, that you be severally transported for fourteen years."
For the admiration of all in our America--for the imitation of those who may be called to act in the like cases--with the sad conviction that the administration of criminal justice is not equal in our Republic to what it is in the monarchies of Europe: for the benefit of all such, this brief notice of judicial action in an English court against eminent, but culpable bankers, is here given--contrasting so strikingly with the vain attempts to prosecute those so much more culpable in our own country.
LXXXVIII. END AND RESULTS OF THE EXTRA SESSION
This extraordinary session, called by President Harrison, held under Mr. Tyler, dominated by Mr. Clay, was commenced on the 31st of May and ended the 13th of September: seventy-five days' session--and replete with disappointed calculations, and nearly barren of permanent results. The whigs expected from it an easy and victorious course of legislation, and the consolidation of their power by the inauguration of their cherished measures for acting on the people--national bank--paper money national currency--union of bank and state--distribution of public money--bankrupt act--monopoly of office. The democracy saw no means of preventing these measures; but relied upon the goodness of their cause, the badness of the measures to be adopted by the whigs, and the blunders they would commit, to give them eventual victory, and soon to restore parties to their usual relative positions. The defection of Mr. Tyler was not foreseen: his veto of a national bank was not counted upon: the establishment of that institution was considered certain: and the only remedy thought of was in the repeal of the law establishing it. As a public political corporation, that repealability came within the decision of the Supreme Court of the United States in the Dartmouth College case; and being established for the good of the state, it became amenable to the judgment of the State upon the question of good, or evil--to be decided by the political power. Repealability was then the reliance against a national bank; and that ground was immediately taken, and systematically urged--both for the purpose of familiarizing the people with the idea of repeal, and of deterring capitalists from taking its stock. The true service that Mr. Tyler did the democratic party was in rejecting the bank charters (for such they both were, though disguised with ridiculous names). Numerically he weakened the whig ranks but little: potentially not at all--as those who joined him, took office: and became both useless to him, and a reproach. That beau ideal, of a whig unity--"whig President, whig Congress, and whig people"--which Mr. Webster and Mr. Cushing were to realize, vanished: and they with it--leaving Mr. Tyler without whig, and without democratic adherents; but with a small party of his own as long as he was in a condition to dispense office. The legislation of the session was a wreck. The measures passed, had no duration. The bankrupt act, and the distribution act, were repealed by the same Congress that passed them--under the demand of the people. The new tariff act, called revenue--was changed within a year. The sub-treasury system, believed to have been put to death, came to life again. Gold and silver, intended to have been ignored as a national currency, had become that currency--both for the national coffers, and the people's pockets. Of all the measures of that extraordinary session, opening with so much hope, nothing now remains to recall the idea of its existence, but, first--THE HOME SQUADRON! keeping idle watch on our safe coasts, at the cost of a million per annum. Next, THE OCEAN LINE STEAMERS! plundering the country of two millions annually, oppressing fair competition and damaging the character of Congress. And last, not least, THAT ONE HOUR RULE! which has silenced the representatives of the people in the House of Representatives, reduced the national legislation to blind dictation, suppressed opposition to evil measures, and deprived the people of the means of knowing the evil that Congress is doing.
To the democracy it was a triumphant session--triumphant in every thing that constitutes moral and durable triumph. They had broken down the whig party before the session was over--crushed it upon its own measures; and were ready for the elections which were to reverse the party positions. The Senate had done it. The House, oppressed by the hour rule, and the tyrannical abuse of the previous question, had been able to make but little show. The two-and-twenty in the Senate did the work; and never did I see a body of men more effective or brilliant--show a higher spirit or a more determined persistence. To name the speakers, would be to enumerate all--except Mr. Mouton, who not having the English language perfect was limited to his vote--always in place, and always faithful. The Globe newspaper was a powerful assistant, both as an ally working in its own columns, and as a vehicle of communication for our daily debates. Before the session was over we felt ourselves victorious, and only waiting for the day when the elections were to show it. Of all our successes, that of keeping the hour rule, and the previous question out of the American Senate, was the most brilliant, and durably beneficent--rising above party--entering the high region of free government--preserving the liberty of speech--preserving to republican government its distinctive and vital feature, that of free debate; and saving national legislation from unresisted party dictation.
LXXXIX. FIRST ANNUAL MESSAGE OF PRESIDENT TYLER
This message coming in so soon after the termination of the extra session--only two months after it--was necessarily brief and meagre of topics, and presents but few points worthy of historical remembrance. The first subject mentioned was the acquittal of McLeod, which had taken place in the recess: and with which result the British government was content. The next subject was, the kindred matter of the Caroline; on which the President had nothing satisfactory to communicate, but expressed a high sense of the indignity which had been offered to the United States, and evinced a becoming spirit to obtain redress for it. He said:
"I regret that it is not in my power to make known to you an equally satisfactory conclusion in the case of the Caroline steamer, with the circumstances connected with the destruction of which, in December, 1837, by an armed force fitted out in the Province of Upper Canada, you are already made acquainted. No such atonement as was due for the public wrong done to the United Stares by this invasion of her territory, so wholly irreconcilable with her rights as an independent power, has yet been made. In the view taken by this government, the inquiry whether the vessel was in the employment of those who were prosecuting an unauthorized war against that Province, or was engaged by the owner in the business of transporting passengers to and from Navy Island in hopes of private gain, which was most probably the case, in no degree alters the real question at issue between the two governments. This government can never concede to any foreign government the power, except in a case of the most urgent and extreme necessity, of invading its territory, either to arrest the persons or destroy the property of those who may have violated the municipal laws of such foreign government, or have disregarded their obligations arising under the law of nations. The territory of the United States must be regarded as sacredly secure against all such invasions, until they shall voluntarily acknowledge their inability to aquit themselves of their duties to others. And in announcing this sentiment, I do but affirm a principle which no nation on earth would be more ready to vindicate, at all hazards, than the people and government of Great Britain."
The finances were in a bad condition, and the President chiefly referred to the report of the Secretary of the Treasury upon them. Of the loan of twelve millions authorized at the previous session, only five millions and a half had been taken--being the first instance, and the last in our financial history in which, in time of peace, our government was unable to borrow money. A deficiency existed in the revenues of the year, and for the ensuing year that deficiency was estimated, would amount to a fraction over fourteen millions of dollars. To meet this large deficit the secretary recommended--first, an extension of the term for the redeemability of the remainder of the authorized loan, amounting to $6,500,000. Secondly, the re-issue of the five millions of treasury notes authorized at the previous session. Thirdly, the remainder ($2,718,570) to be made up by additional duties on imported articles. While recommending these fourteen millions and a quarter to be raised by loans, treasury notes, and duties, the President recommended the land revenue should still remain as a fund for distribution to the States, and was solicitous that, in the imposition of new duties, care should be taken not to impair the mutual assurance for each other's life which the land distribution bill, and the compromise clause contained in the tariff bill of the extra session provided for each other--saying: "It might be esteemed desirable that no such augmentation of the duties should take place as would have the effect of annulling the land proceeds distribution act of the last session, which act it declared to be inoperative the moment the duties are increased beyond 20 per centum--the maximum rate established by the compromise act." This recommendation, so far as it applied to the compromise act, was homage to the dead; and so far as it related to continuing the distribution of the land revenue was, probably, the first instance in the annals of nations in which the chief magistrate of a country has recommended the diversion and gratuitous distribution of a large branch of its revenues, recommending at the same time, money to be raised by loans, taxes, and government notes to supply the place of that given away. The largeness of the deficiency was a point to be accounted for; and that was done by showing the great additional expenses to be incurred--and especially in the navy, for which the new secretary (Mr. Upshur) estimated enormously, and gave rise to much searching discussion in Congress: of which, in its place. But the chief item in the message was another modification of the fiscalities of the extra session, with a new name, and an old countenance upon it, except where it was altered for the worse. This new plan was thus introduced by the President:
"In pursuance of a pledge given to you in my last message to Congress, which pledge I urge as an apology for adventuring to present you the details of any plan, the Secretary of the Treasury will be ready to submit to you, should you require it, a plan of finance which, while it throws around the public treasure reasonable guards for its protection, and rests on powers acknowledged in practice to exist from the origin of the government, will, at the same time, furnish to the country a sound paper medium, and afford all reasonable facilities for regulating the exchanges. When submitted, you will perceive in it a plan amendatory of the existing laws in relation to the Treasury department--subordinate in all respects to the will of Congress directly, and the will of the people indirectly--self-sustaining should it be found in practice to realize its promises in theory, and repealable at the pleasure of Congress. It proposes by effectual restraints, and by invoking the true spirit of our institutions, to separate the purse from the sword; or more properly to speak, denies any other control to the President over the agents who may be selected to carry it into execution, but what may be indispensably necessary to secure the fidelity of such agents; and, by wise regulations, keeps plainly apart from each other private and public funds. It contemplates the establishment of a Board of Control at the seat of government, with agencies at prominent commercial points, or wherever else Congress shall direct, for the safe-keeping and disbursement of the public moneys, and a substitution, at the option of the public creditor, of treasury notes, in lieu of gold and silver. It proposes to limit the issues to an amount not to exceed $15,000,000--without the express sanction of the legislative power. It also authorizes the receipt of individual deposits of gold and silver to a limited amount, and the granting certificates of deposit, divided into such sums as may be called for by the depositors. It proceeds a step further, and authorizes the purchase and sale of domestic bills and drafts, resting on a real and substantial basis, payable at sight, or having but a short time to run, and drawn on places not less than one hundred miles apart--which authority, except in so far as may be necessary for government purposes exclusively, is only to be exerted upon the express condition, that its exercise shall not be prohibited by the State in which the agency is situated."
This was the prominent feature of the message, and appeared to Mr. Benton to be so monstrous and dangerous that it ought not to be allowed to get out of the Senate without a mark of reprobation should be first set upon it. The moment the reading was finished, the usual resolve was offered to print extra copies, when he rose and inveighed against the new fiscality with great vehemence, saying:
"He could not reconcile it to himself to let the resolution pass without making a few remarks on that part of the message which related to the new fiscal agent. Looking at that feature of it, as read, he perceived that the President gave an outline of his plan, leaving it to the Secretary of the Treasury to furnish the details in his report. He (Mr. BENTON) apprehended that nothing in those details could reconcile him to the project, or in any manner meet his approbation. There were two main points presented in the plan, to which he never could agree--both being wholly unconstitutional and dangerous. One was that of emitting bills of credit, or issuing a treasury currency. Congress had no constitutional authority to issue paper money, or emit federal bills of credit; and the other feature is to authorize this government to deal in exchanges. The proposition to issue bills of credit, when under consideration at the formation of the constitution, was struck out with the express view of making this government a hard money government--not capable of recognizing any other than a specie currency--a currency of gold and silver--a currency known and valued, and equally understood by every one. But here is a proposition to do what is expressly refused to be allowed by the framers of the constitution--to exercise a power not only not granted to Congress, but a power expressly denied. The next proposition is to authorize the federal government to deal in and regulate exchanges, and to furnish exchange to merchants. This is a new invention--a modern idea of the power of this government, invented by Mr. Biddle, to help out a national bank. Much as General Hamilton was in favor of paper money, he never went the length of recommending government bills of credit, or dealings in exchange by the United States Treasury. The fathers of the church, Macon, and John Randolph, and others, called this a hard money government: they objected to bank paper; but here is government paper; and that goes beyond Hamilton, much as he was in favor of the paper system. The whole scheme making this government a regulator of exchange--a dealer in exchange--a furnisher of exchange--is absurd, unconstitutional, and pernicious, and is a new thing under the sun.
"Now he (Mr. BENTON) objected to this government becoming a seller of exchange to the country (which is transportation of money), for which there is no more authority than there is for its furnishing transportation of goods or country produce. There is not a word in the constitution to authorize it--not a word to be found justifying the assumption. The word exchange is not in the constitution. What does this message propose? Congress is called upon to establish a board with agencies, for the purpose of furnishing the country with exchanges. Why should not Congress be also called on to furnish that portion of the community engaged in commerce with facilities for transporting merchandise? The proposition is one of the most pernicious nature, and such as must lead to the most dangerous consequences if adopted.
"The British debt began in the time of Sir Robert Walpole, on issues of exchequer bills--by which system the British nation has been cheated, and plunged irretrievably in debt to the amount of nine hundred millions of pounds. The proposition that the government should become the issuer of exchequer notes, is one borrowed from the system introduced in England by Sir Robert Walpole, whose whig administration was nothing but a high tory administration of Queen Anne: and infinitely worse; for Walpole's exchequer bills were for large sums, for investment: this scheme goes down to five dollar notes for common and petty circulation. He (Mr. BENTON) had much to say on this subject, but this was not the time for entering at large into it. This perhaps was not the proper occasion to say more; nor would it, he considered, be treating the President of the United States with proper respect to enter upon a premature discussion. He could not, however, in justice to himself, allow this resolution to pass without stating his objections to two such obnoxious features of the proposed fiscality, looking, as he did, upon the whole thing as one calculated to destroy the whole structure of the government, to change it from the hard money it was intended to be, to the paper money government it was intended not to be, and to mix it up with trade, which no one ever dreamed of. He (Mr. BENTON) had on another occasion stated that this administration would go back not only to the federal times of '98, but to the times of Sir Robert Walpole and Queen Anne, and the evidence is now before us.
"He (Mr. BENTON) had only said a few words on this occasion, because he could not let the proposition to sanction bills of credit go without taking the very earliest opportunity of expressing his disapprobation, and denouncing a system calculated to produce the same results which had raised the funded debt of Great Britain from twenty-one millions to nine hundred millions of pounds. He should avail himself of the first appropriate opportunity to maintain the ground he had assumed as to the identity of this policy with that of Walpole, by argument and references, that this plan of the President's was utterly unconstitutional and dangerous--part borrowed from the system of English exchequer issues, and part from Mr. Biddle's scheme of making the federal government an exchange dealer--though Mr. Biddle made the government act indirectly through a board of bank directors, and this makes it act directly through a board of treasury directors and their agents.
"This is the first time that a formal proposition has been made to change our hard money government (as it was intended to be) into a paper money machine; and it is the first time that there has been a proposal to mix it up with trade and commerce, by making it a furnisher of exchanges, a bank of deposit, a furnisher of paper currency, and an imitator of the old confederation in its continental bills and a copyist of the English exchequer system. Being the first time these unconstitutional and pernicious schemes were formally presented to Congress, he felt it to be his duty to disclose his opposition to them at once. He would soon speak more fully."
The President in his message referred to the accompanying report of the Secretary of the Treasury (Mr. Walter Forward), for the details of his plan; and in looking at these they were found to comprise all the features of a bank of circulation, a bank of deposit, and a bank of discount upon bills of exchange--all in the hands of the government, and they to become the collectors and keepers of the public moneys, and the furnishers of a national paper money currency, in sums adapted to common dealings, both to the people and the federal government. It was a revolting scheme, and fit for instant condemnation, but in great danger of being adopted from the present predominance of that party in all the departments of the government which was so greatly addicted to the paper system.
Chapter XC
THIRD PLAN FOR A FISCAL AGENT, CALLED EXCHEQUER BOARD: MR. BENTON'S SPEECH AGAINST IT: EXTRACTS.
MR. PRESIDENT:--I have said on several occasions since the present administration was formed, that we had gone back not merely to the federal times of General Hamilton, but far beyond them--to the whig times of Sir Robert Walpole, and the tory times of Queen Anne. When I have said this I did not mean it for sarcasm, or for insult, or to annoy the feelings of those who had just gotten into power. My aim was far higher and nobler--that of showing the retrograde movement which our government was making, and waking up the country to a sense of its dangers before it was too late; and to the conviction of the necessity of arresting that movement, and recovering the ground which we have lost. When I had said that we had gone back to the Walpole and Queen Anne times of the British government, I knew full well the extent of the declaration which I had made, and the obligation which I had imposed on myself to sustain my assertion, and I knew that history would bear me out in it. I knew all this; and I felt that if I could show to the American people that we had retrograded to the most calamitous period of British history--the period from which her present calamities all date--and that we were about to adopt the systems of policy which she then adopted, and which has led to her present condition; I felt that if I could do this, I might succeed in rousing up the country to a sense of its danger before it was too late to avoid the perils which are spread before us. The administration of Sir Robert Walpole was the fountain-head of British woes. All the measures which have led to the present condition of the British empire, and have given it more debt and taxes, more paupers, and more human misery than ever before was collected under the sway of one sceptre: all these date from the reigns of the first and second George; when this minister, for twenty-five years, was the ruler of parliament by means of the moneyed interest, and the ruler of kings by beating the tories at their own game of non-resistance and passive obedience to the royal will. The tories ruled under Queen Anne: they went for church and state, and rested for support on the landed interest. The whigs came into power with the accession of George the First: they went for bank and state; and rested for support on the moneyed interest. Sir Robert Walpole was the head of the whig party; and immediately became the favorite of that monarch, and afterwards of his successor; and, availing himself during that long period of power of all the resources of genius, unimpeded by the obstacle of principles, he succeeded in impressing his own image upon the age in which he lived, and giving to the government policy the direction which it has followed ever since. Morals, politics, public and private pursuits, all received the impress of the minister's genius; and what that genius produced I will now proceed to show: I read from Smollet's continuation of Hume:
"This was the age of interested projects, inspired by a venal spirit of adventure, the natural consequence of that avarice, fraud, and profligacy which the MONEYED CORPORATIONS had introduced. The vice, luxury, and prostitution of the age--the almost total extinction of sentiment, honor, and public spirit--had prepared the minds of men for slavery and corruption. The means were in the hands of the ministry: the public treasure was at their devotion: they multiplied places and pensions, to increase the number of their dependents: they squandered away the national treasure without taste, discernment, decency, or remorse: they enlisted an army of the most abandoned emissaries, whom they employed to vindicate the worst measures in the face of truth, common sense, and common honesty; and they did not fail to stigmatize as Jacobites, and enemies to the government, all those who presumed to question the merit of their administration. The interior government of Great Britain was chiefly managed by Sir Robert Walpole, a man of extraordinary talents, who had from low beginnings raised himself to the head of the ministry. Having obtained a seat in the House of Commons, he declared himself one of the most forward partisans of the whig faction. He was endued with a species of eloquence which, though neither nervous nor elegant, flowed with great facility, and was so plausible on all subjects, that even when he misrepresented the truth, whether from ignorance or design, he seldom failed to persuade that part of his audience for whose hearing his harangue was chiefly intended. He was well acquainted with the nature of the public funds, and understood the whole mystery of stockjobbing. This knowledge produced a connection between him and the MONEY CORPORATIONS, which served to enhance his importance."
Such was the picture of Great Britain in the time of Sir Robert Walpole, and such was the natural fruit of a stockjobbing government, composed of bank and state, resting for support on heartless corporations, and lending the wealth and credit of the country to the interested schemes of projectors and adventurers. Such was the picture of Great Britain during this period; and who would not mistake it (leaving out names and dates) for a description of our own times, in our own America, during the existence of the Bank of the United States and the thousand affiliated institutions which grew up under its protection during its long reign of power and corruption? But, to proceed, with English history:
Among the corporations brought into existence by Sir Robert Walpole, or moulded by him into the form which they have since worn, were the South Sea Company, the East India Company, the Bank of England, the Royal Insurance Company, the London Insurance Company, the Charitable Corporation, and a multitude of others, besides the exchequer and funding systems, which were the machines for smuggling debts and taxes upon the people and saddling them on posterity. All these schemes were brought forward under the pretext of paying the debts of the nation, relieving the distresses of the people, assisting the poor, encouraging agriculture, commerce, and manufactures; and saving the nation from the burden of loans and taxes. Such were the pretexts for all the schemes. They were generally conceived by low and crafty adventurers, adopted by the minister, carried through parliament by bribery and corruption, flourished their day; and ended in ruin and disgrace. A brief notice of the origin and pretensions of the South Sea scheme, may serve for a sample of all the rest, and be an instructive lesson upon the wisdom of all government projects for the relief of the people. I say, a notice of its origin and pretensions; for the progress and termination of the scheme are known to everybody, while few know (what the philosophy of history should be most forward to teach) that this renowned scheme of fraud, disgrace, and ruin, was the invention of a London scrivener, adopted by the king and his minister, passed through parliament by bribes to the amount of £574,000; and that its vaunted object was to pay the debts of the nation, to ease the burdens of the subject, to encourage the industry of the country, and to enrich all orders of men. These are the things which should be known; these are the things which philosophy, teaching by the example of history, proposes to tell, in order that the follies of one age or nation may be a warning to others; and this is what I now want to show. I read again from the same historian:
"The king (George I.) having recommended to the Commons the consideration of proper means for lessening the national debt, was a prelude to the famous South Sea act, which became productive of so much mischief and infatuation. The scheme was projected by Sir John Blunt, who had been bred a scrivener, and was possessed of all the cunning, plausibility and boldness requisite for such an undertaking. He communicated his plan to the Chancellor of the Exchequer, as well as to one of the Secretaries of State. He answered all their objections, and the plan was adopted. They foresaw their own private advantage in the execution of the design. The pretence for the scheme was to discharge the national debt, by reducing all the funds into one. The Bank and the South Sea Company outbid each other. The South Sea Company altered their original plan, and offered such high terms to government that the proposals of the Bank were rejected: and a bill was ordered to be brought into the House of Commons, formed on the plan presented by the South Sea Company. The bill passed without amendment or division; and on the 7th day of April, 1720, received the royal assent. Before any subscription could be made, a fictitious stock of £574,000 had been disposed of by the directors to facilitate the passing of the bill. Great part of this was distributed among the Earl Sunderland, Mr. Craggs, Secretary of State, the Chancellor of the Exchequer, the Duchess of Kendall, the Countess of Platen, and her two nieces" (mistresses of the king, &c.)
This is a sample of the origin and pretensions of nearly all the great corporations which were chartered and patronized by the Walpole whigs: all of them brought forward under the pretext of relieving the people and the government--nearly all of them founded in fraud or folly--carried through by corruption--and ending in disgrace and calamity. Leaving out names, and who would not suppose that I had been reading the history of our own country in our own times? The picture suits the United States in 1840 as well as it suited England in 1720: but at one point, the comparison, if pushed a step further, would entirely fail; all these corporation plunderers were punished in England! Though favored by the king and ministry, they were detested by the people, and pursued to the extremity of law and justice. The South Sea swindlers were fined and imprisoned--their property confiscated--their names attainted--and themselves declared incapable of holding any office of honor or profit in the kingdom. The president and cashier of the charitable corporation--(which was chartered to relieve the distresses of the poor, and which swindled the said poor out of £600,000 sterling)--this president and this cashier were pursued into Holland--captured--brought back--criminally punished--and made to disgorge their plunder. Others, authors and managers of various criminal corporations, were also punished: and in this the parallel ceases between the English times and our own. With us, the swindling corporations are triumphant over law and government. Their managers are in high places--give the tone to society--and riot in wealth. Those who led, or counselled the greatest ruin which this, or any country ever beheld--the Bank of the United States--these leaders, their counsellors and abettors, are now potential with the federal government--furnish plans for new systems of relief--and are as bold and persevering as ever in seizing upon government money and government credit to accomplish their own views. In all this, the parallel ceases; and our America sinks in the comparison.
Corporation credit was ruined in Great Britain, by the explosions of banks and companies--by the bursting of bubbles--by the detection of their crimes--and by the crowning catastrophe of the South Sea scheme: it is equally ruined with us, and by the same means, and by the crowning villany of the Bank of the United States. Bank and state can no longer go together in our America: the government can no longer repose upon corporations. This is the case with us in 1841; and it was the case with Great Britain in 1720. The South Sea explosion dissolved (for a long time) the connection there; the explosion of the Bank of the United States has dissolved it here. New schemes become indispensable: and in both countries the same alternative is adopted. Having exhausted corporation credit in England, the Walpole whigs had recourse to government credit, and established a Board of Exchequer, to strike government paper. In like manner, the new whigs, having exhausted corporation credit with us, have recourse to government credit to supply its place; and send us a plan for a federal exchequer, copied with such fidelity of imitation from the British original that the description of one seems to be the description of the other. Of course I speak of the exchequer feature of the plan alone. For as to all the rest of our cabinet scheme--its banking and brokerage conceptions--its exchange and deposit operations--its three dollar issues in paper for one dollar specie in hand--its miserable one-half of one per centum on its Change-alley transactions--its Cheapside under-biddings of rival bankers and brokers:--as to all these follies (for they do not amount to the dignity of errors) they are not copied from any part of the British exchequer system, or any other system that I ever heard of, but are the uncontested and unrivalled production of our own American genius. I repeat it: our administration stands to-day where the British government stood one hundred and twenty years ago. Corporation credit exhausted, public credit is resorted to; and the machinery of an exchequer of issues becomes the instrument of cheating and plundering the people in both countries. The British invent: we copy: and the copy proves the scholar to be worthy of the master. Here is the British act. Let us read some parts of it: and recognize in its design, its structure, its object, its provisions, and its machinery, the true original of this plan (the exchequer part) which the united wisdom of our administration has sent down to us for our acceptance and ratification. I read, not from the separate and detached acts of the first and second George, but from the revised and perfected system as corrected and perpetuated in the reign of George the Third. (Here Mr. Benton compared the two systems through the twenty sections which compose the British act, and the same number which compose the exchequer bill of this administration.)
Here, resumed Mr. B. is the original of our exchequer scheme! here is the original of which our united administration has unanimously sent us down a faithful copy. In all that relates to the exchequer--its design--operation--and mode of action--they are one and the same thing! identically the same. The design of both is to substitute government credit for corporation credit--to strike paper money for the use of the government--to make this paper a currency, as well as a means of raising loans--to cover up and hide national debt--to avoid present taxes in order to increase them an hundred fold in future--to throw the burdens of the present day upon a future day; and to load posterity with our debts in addition to their own. The design of both is the same, and the structure of both is the same. The English board consists of the lord treasurer for the time being, and three commissioners to be appointed by the king; our board is to consist of the Secretary of the Treasury and the Treasurer for the time being, and three commissioners to be appointed by the President and Senate. The English board is to superintend and direct the form and mode of preparing and issuing the exchequer bills; our board is to do the same by our treasury notes. The English bills are to be receivable in all payments to the public; our treasury notes are to be received in like manner in all federal payments. The English board appoints paymasters, clerks and officers to assist them in the work of the exchequer; ours is to appoint agents in the States, with officers and clerks to assist them in the same work. The English paymasters are to give bonds, and be subject to inspection; our agents are to do and submit to the same. The English exchequer bills are to serve for a currency; and for that purpose the board may contract with persons, bodies politic and corporate, to take and circulate them; our board is to do the same thing through its agencies in the States and territories. The English exchequer bills are to be exchanged for ready money; ours are to be exchanged in the same manner. In short, the plans are the same, one copied from the other, identical in design, in structure, and in mode of operation; and wherein they differ (as they do in some details), the advantage is on the side of the British. For example: 1. The British pay interest on their bills, and raise the interest when necessary to sustain them in the market. Ours are to pay no interest, and will depreciate from the day they issue. 2. The British cancel and destroy their bills when once paid: we are to reissue ours, like common bank notes, until worn out with use. 3. The British make no small bills; none less than £100 sterling ($500), we begin with five dollars, like the old continentals; and, like them, will soon be down to one dollar, and to a shilling. 4. The British board could issue no bill except as specially authorized from time to time by act of Parliament: ours is to keep out a perpetual issue of fifteen millions; thus creating a perpetual debt to that amount. 5. The British board was to have no deposit of government stocks: ours are to have a deposit of five millions, to be converted into money when needed, and to constitute another permanent debt to that amount. 6. The British gave a true title to their exchequer act: we give a false one to ours. They entitled theirs, "An act for regulating the issuing and paying off, of exchequer bills:" we entitle ours, "A bill amendatory of the several acts establishing the Treasury department." In these and a few other particulars the two exchequers differ; but in all the essential features--design--structure--operation--they are the same.
Having shown that our proposed exchequer was a copy of the British system, and that we are having recourse to it under the same circumstances: that in both countries it is a transit from corporation credit deceased, to government credit which is to bear the brunt of new follies and new extravagances: having shown this, I next propose to show the manner in which this exchequer system has worked in England, that, from its workings there, we may judge of its workings here. This is readily done. Some dates and figures will accomplish the task, and enlighten our understandings on a point so important. I say some dates and figures will do it. Thus: at the commencement of this system in England the annual taxes were 5 millions sterling: they are now 50 millions. The public debt was then 40 millions: it is now 900 millions, the unfunded items included. The interest and management of the debt were then 1-1/2 millions: they are now 30 millions.
Here Mr. B. exhibited a book--the index to the British Statutes at large--containing a reference to all the issues of exchequer bills from the last year of the reign of George I. (1727) to the fourth year of the reign of her present Majesty (1840). He showed the amounts issued under each reign, and the parallel growth of the national debt, until these issues exceeded a thousand millions, and the debt, after all payments made upon it, is still near one thousand millions. Mr. B. here pointed out the annual issues under each reign, and then the totals for each reign, showing that the issues were small and far between in the beginning--large and close together in the conclusion--and that it was now going on faster than ever.
The following was the table of the issues under each reign:
Geo. I. in 1727 (one year), £370,000 Geo. II. from 1727 to 1760 (33 years), 11,500,000 Geo. III. from 1760 to 1820 (60 years), 542,500,000 Geo. IV. from 1820 to 1831 (11 years), 320,000,000 Will. IV. from 1831 to 1837 (6 years), 160,000,000 Victoria I. from 1837 to 1840 (4 years), 160,000,000 -------------- £1 140,370,000
Near twelve hundred millions of pounds sterling in less than a century and a quarter--we may say three-quarters of a century, for the great mass of the issues have taken place since the beginning of the reign of George III. The first issue was the third of a million; under George II., the average annual issue was the third of a million; under George III., the annual average was nine millions; under George IV. it was thirty millions; under William IV. twenty-three millions; and under Victoria, it is twenty-one millions. Such is the progress of the system--such the danger of commencing the issue of paper money to supply the wants of a government.
This, continued Mr. B., is the fruit of the exchequer issues in England, and it shows both the rapid growth and dangerous perversion of such issues. The first bills of this kind ever issued in that country were under William III., commonly called the Prince of Orange, in the year 1696. They were issued to supply the place temporarily of the coin, which was all called in to be recoined under the superintendence of Sir Isaac Newton. The first bills were put out by King William only for this temporary purpose, and were issued as low as ten pounds and five pounds sterling. It was not until more than thirty years afterwards, and when corporation credit had failed, that Sir Robert Walpole revived the idea of these bills, and perverted them into a currency, and into instruments for raising money for the service of the government. His practice was to issue these bills to supply present wants, instead of laying taxes or making a fair and open loan. When due, a new issue took up the old issue; and when the quantity would become great, the whole were funded; that is to say saddled upon posterity. The fruit of the system is seen in the 900,000,000 of debt which Great Britain still owes, after all the payments made upon it. The amount is enormous, overwhelming, appalling; such as never could have been created under any system of taxes or loans. In the nature of things government expenditure has its limits when it has to proceed upon taxation or borrowing. Taxes have their limit in the capacity of the people to pay: loans have their limit in the capacity of men to lend; and both have their restraints in the responsibility and publicity of the operation. Taxes cannot be laid without exciting the inquiry of the people. Loans cannot be made without their demanding wherefore. Money, i. e. gold and silver, cannot be obtained, but in limited and reasonable amounts, and all these restraints impose limits upon the amount of government expenditure and government debt. Not so with the noiseless, insidious, boundless progress of debt and expenditure upon the issue of government paper! The silent working of the press is unheard heard by the people. Whether it is one million or twenty millions that is struck, is all one to them. When the time comes for payment, the silent operation of the funding system succeeds to the silent operation of the printing press; and thus extravagant expenditures go on--a mountain of debt grows up--devouring interest accrues--and the whole is thrown upon posterity, to crush succeeding ages, after demoralizing the age which contracted it.
The British debt is the fruit of the exchequer system in Great Britain, the same that we are now urged to adopt, and under the same circumstances; and frightful as is its amount, that is only one branch--one part of the fruit--of the iniquitous and nefarious system. Other parts remain to be stated, and the first that I name is, that a large part of this enormous debt is wholly false and factitious! McCulloch states two-fifths to be fictitious; other writers say more; but his authority is the highest, and I prefer to go by it. In his commercial dictionary, now on my table, under the word "funds," he shows the means by which a stock for £100 would be granted when only £60 or £70 were paid for it; and goes on to say:
"In consequence of this practice, the principal of the debt now existing amounts to nearly two-fifths more than the amount actually advanced by the lender."
So that the English people are bound for two-fifths more of capital, and pay two-fifths more of annual interest, on account of their debt than they ever received. Two-fifths of 900,000,000 is 360,000,000; and two-fifths of 30,000,000 is 12,000,000; so that here is fictitious debt to the amount of $1,600,000,000 of our money, drawing $60,000,000 of interest, for which the people of England never received a cent; and into which they were juggled and cheated by the frauds and villanies of the exchequer and funding systems! those systems which we are now unanimously invited by our administration to adopt. The next fruit of this system is that of the kind of money, as it was called, which was considered lent, and which goes to make up the three-fifths of the debt admitted to have been received; about the one-half of it was received in depreciated paper during the long bank suspension which took place from 1797 to 1823, and during which time the depreciation sunk as low as 30 per centum. Here, then, is another deduction of near one-third to be taken off the one-half of the three-fifths which is counted as having been advanced by the lenders. Finally, another bitter drop is found in this cup of indebtedness, that the lenders were mostly jobbers and gamblers in stocks, without a shilling of their own to go upon, and who by the tricks of the system became the creditors of the government for millions. These gentry would puff the stocks which they had received--sell them at some advance--and then lend the government a part of its own money. These are the lenders--these the receivers of thirty millions sterling of taxes--these the scrip nobility who cast the hereditary nobles into the shade, and who hold tributary to themselves all the property and all the productive industry of the British empire. And this is the state of things which our administration now proposes for our imitation.
This is the way the exchequer and funding system have worked in England; and let no one say they will not work in the same manner in our own country. The system is the same in all countries, and will work alike every where. Go into it, and we shall have every fruit of the system which the English people now have; and of this most of our young States, and of our cities, and corporations, which have gone into the borrowing business upon their bonds, are now living examples. Their bonds were their exchequer bills. They used them profusely, extravagantly, madly, as all paper credit is used. Their bonds were sold under par, though the discount was usually hid by a trick: pay was often received in depreciated paper. Sharpers frequently made the purchase, who had nothing to pay but a part of the proceeds of the same bonds when sold. And thus the States and cities are bound for debts which are in a great degree fictitious, and are bound to lenders who had nothing to lend; and such are the frauds of the system which is presented to us, and must be our fate, if we go into the exchequer system.
I have shown the effect of an exchequer of issues in Great Britain to strike paper money for a currency, and as a substitute for loans and taxes. I have shown that this system, adopted by Sir Robert Walpole upon the failure of corporation credit, has been the means of smuggling a mountain load of debt upon the British people, two-fifths of which is fraudulent and fictitious; that it has made the great body of the people tributaries to a handful of fundholders, most of whom, without owning a shilling, were enabled by the frauds of the paper system and the funding system, to lend millions to the government. I have shown that this system, thus ruinous in England, was the resort of a crafty minister to substitute government credit for the exhausted credit of the moneyed corporations, and the exploded bubbles; and I have shown that the exchequer plan now presented to us by our administration, is a faithful copy of the English original. I have shown all this; and now the question is, shall we adopt this copy? This is the question; and the consideration of it implies the humiliating conclusion, that we have forgot that we have a constitution, and we have gone back to the worst era of English history--to times of the South Sea bubble, to take lessons in the science of political economy. Sir, we have a Constitution! and if there was any thing better established than another, at the time of its adoption, it was that the new government was a hard-money government, made by hard-money men, who had seen and felt the evils of government paper, and who intended for ever to cut off the new government from the use of that dangerous expedient. The question was made in the Convention (for there was a small paper money party in that body), and solemnly decided that the government should not emit paper money, bills of credit, or paper currency of any kind. It appears from the history of the Convention, that the first draft of the constitution contained a paper clause, and that it stood in connection with the power to raise money; thus: "To borrow money, and emit bills, on the credit of the United States." When this clause came up for consideration, Mr. Gouverneur Morris moved to strike out the words, "and emit bills," and was seconded by Mr. Pierce Butler. "Mr. Madison thought it sufficient to prevent them from being made a tender." "Mr. Ellsworth thought this a favorable moment to shut and bar the door against paper money. The mischief of the various experiments which had been made, were now fresh in the public mind, and had excited the disgust of all the respectable part of America. By withholding the power from the new government, more friends of influence would be gained to it than by almost any thing else. Paper money can in no case be necessary. Give the government credit, and other resources will offer. The power may do harm, never good." Mr. Wilson said: "It will have a most salutary influence on the credit of the United States, to remove the possibility of paper money. This expedient can never succeed while its mischiefs are remembered; and as long as it can be resorted to, it will be a bar to other resources." "Mr. Butler remarked that paper was a legal tender in no country in Europe. He was urgent for disarming the government of such a power." "Mr. Read thought the words, if not struck out, would be as alarming as the mark of the beast in Revelations." "Mr. Langdon had rather reject the whole plan than retain the three words, 'and emit bills.'" A few members spoke in favor of retaining the clause; but, on taking the vote, the sense of the convention was almost unanimously against it. Nine States voted for striking out: two for retaining.
If there were a thousand constitutional provisions in favor of paper money, I should still be against it--against the thing itself, per se and propter se--on account of its own inherent baseness and vice. But the Constitution is against it--clearly so upon its face; upon its history; upon its early practice; upon its uniform interpretation. The universal expression at the time of its adoption was, that the new government was a hard money government, made by hard money men, and that it was to save the country from the curse of paper money. This was the universal language--this the universal sentiment; and this hard money character of the new government was one of the great recommendations in its favor, and one of the chief inducements to its adoption. All the early action of the government conformed to this idea--all its early legislation was as true to hard money as the needle is to the pole. The very first act of Congress for the collection of duties on imports, passed in the first year of the new government's existence, and enacted by the very men who had framed the Constitution--this first act required those duties to be paid "in gold and silver coin only;" the word only, which is a contraction for the old English onely, being added to cut off the possibility of an intrusion, or an injection of a particle of paper money into the Treasury of the United States. The first act for the sale of public lands required them to be paid for in "specie"--the specie circular of 1836 was only the enforcement of that act; and the hard money clause in the independent treasury was a revival of these two original and fundamental revenue laws. Such were the early legislative interpretations of the Constitution by the men who made it; and corresponding with these for a long time after the commencement of the government, were the interpretations of all public men, and of no one more emphatically than of him who is now the prominent member of this administration, and to whose hand public opinion attributes the elaborate defence of the Cabinet Exchequer plan which has been sent down to us. In two speeches, delivered by that gentleman in the House of Representatives in the year 1816, he thus expressed himself on the hard money character of our government, and on the folly and danger of the paper system:
"No nation had a better currency than the United States. There was no nation which had guarded its currency with more care: for the framers of the Constitution and those who had enacted the early statutes on the subject, were hard money men. They had felt and duly appreciated the evils of a paper medium: they, therefore, sedulously guarded the currency of the United States from debasement. The legal currency of the United States was gold and silver coin: this was a subject in regard to which Congress had run into no folly. Gold and silver currency was the law of the land at home, and the law of the world abroad: there could, in the present condition of the world, be no other currency."
So spake the present Secretary of State in February, 1816; and speaking so, he spoke the language of the Constitution, of the statesman, and of the enlightened age in which we live. He was right in saying that Congress, up to that time, had run into no folly in relation to the currency; that is to say, had not attempted to supersede the hard money of the Constitution by a national currency of paper. I can say the same for Congress up to the present day. Can the Secretary answer in like manner for the cabinet of which he is a member? Can he say of it, that it has run into no folly in relation to the currency? The secretary is right again in saying that, in the present condition of the world, there can be no other currency than gold and silver. Certainly he is right. Gold and silver is the measure of values. The actual condition of the world requires that measure to be uniform and universal. The whole world is now in a state of incessant intercommunication. Commercial, social, political relations are universal. Dealings and transactions are immense. All nations, civilized and barbarian, acknowledge the validity of the gold and silver standard; and the nation that should attempt to establish another, would derange its connections with the world, and put itself without the pale of its monetary system. The Secretary was right in saying that, in the present condition of the world, in the present state of the universal intercommunications of all mankind, there could be no measure of values but that which was universally acknowledged, and that all must conform to that measure. In this he showed a grasp of mind--a comprehension and profundity of intellect--which merits encomium, and which casts far into the shade the lawyer-like argument, in the shape of a report, which has been sent down to us.
The senator from Virginia [Mr. Rives] felicitates himself upon the character of these proposed exchequer bills, because they are not to be declared by law to be a legal tender: as if there was any necessity for such a declaration! Far above the law of the land is the law of necessity! far above the legal tender, which the statute enacts, is the forced tender which necessity compels. There is no occasion for the statutory enactment: the paper will soon enact the law for itself--that law which no power can resist, no weakness can shun, no art elude, no cunning escape. It is the prerogative of all paper money to expel all hard money; and then to force itself into every man's hand, because there is nothing else for any hand to receive. It is the prerogative of all paper money to do this, and of government paper above all other. Let this government go into the business of paper issues: let it begin to stamp paper for a currency, and it will quickly find itself with nothing but paper on its hands;--paper to pay out--paper to receive in;--the specie basis soon gone--and the vile trash depreciating from day to day until it sinks into nothing, and perishes on the hands of the ignorant, the credulous, and the helpless part of the community.
The same senator [Mr. RIVES] consoles himself with the small amount of these exchequer bills which are to be issued--only fifteen millions of dollars. Alas! sir, does he recollect that that sum is seven times the amount of our first emission of continental bills? that it is fifteen times the amount of Sir Robert Walpole's first emission of exchequer bills? and double the amount of the first emission of the French assignats? Does he consider these things, and recollect that it is the first step only which costs the difficulty? and that, in the case of government paper money, the subsequent progress is rapid in exact proportion to the difficulty of the first step? Does he not know that the first emission of our continental bills was two millions of dollars, and that in three years they amounted to two hundred millions? that the first issue of Sir Robert Walpole's exchequer bills was the third of a million, and that they have since exceeded a thousand millions? that the first emission of assignats was the third of a milliard of francs, and that in seven years they amounted to forty-five thousand milliards? Thus it has been, and thus it will be. The first issues of government paper are small, and with difficulty obtained, and upon plausible pretexts of necessity and relief. The subsequent issues are large, and obtained without opposition, and put out without the formality of an excuse. This is the course, and thus it will be with us if we once begin. We propose fifteen millions for the start: grant it: it will soon be fifteen hundred millions! and those who go to that excess will be far less blamable than those who made the first step.
I have said that the present administration have gone back far beyond the times of General Hamilton--that they have gone to the times of Sir Robert Walpole; and I prove it by showing how faithfully they copy his policy in pursuing the most fatal of his measures. Yes, sir, they have gone back not merely far beyond where General Hamilton actually stood, but to the point to which he refused to go. He refused to go to government paper money. That great man, though a friend to bank paper, was an enemy to government paper. He condemned and deprecated the whole system of government issues. He has left his own sentiments on record on this point, and they deserve in this period of the retrogression of our government to be remembered, and to be cited on this floor. In his report on a national bank in 1791, he ran a parallel between the dangers of bank paper and government paper, assigning to the latter the character of far greatest danger and mischief--an opinion in which I fully concur with him. In that report, he thus expressed himself on the dangers of government paper:
"The emitting of paper money by the authority of the government is wisely prohibited to the individual States by the National Constitution: and the spirit of the prohibition should not be disregarded by the government of the United States. Though paper emissions, under a general authority, might have some advantages not applicable, and be free from disadvantages which are applicable, to the like emissions by the States separately, yet they are of a nature so liable to abuse--and, it may even be affirmed, so certain of being abused--that the wisdom of the government will be shown in never trusting itself with the use of so seducing and dangerous an expedient. The stamping of paper is an operation so much easier than the laying of taxes, that a government in the practice of paper emissions would rarely fail, in any such emergency, to indulge itself too far in the employment of that resource, to avoid, as much as possible, one less auspicious to present popularity. If it should not even be carried so far as to be rendered an absolute bubble, it would at least be likely to be extended to a degree which would occasion an inflated and artificial state of things, incompatible with the regular and prosperous course of the political economy."
A division has taken place in the great whig party on this point. It has split into two wings--a great, and a small wing. The body of the party stand fast on the Hamiltonian ground of 1791: a fraction of the party have slid back to the Walpole ground of 1720. The point of difference between them is a government bank and government paper on one hand, and a banking company under a national charter, issuing bank notes, on the other. This is the point of difference, and it is a large one, very visible to every eye; and I am free to say that, with all my objections to the national bank and its paper, I am far more opposed to government banking, and to government issues of paper money.
The Tyler-Webster whigs are for government banking--for making the transit from corporation credit, no longer available, to government credit, which is to stand the brunt of new follies and new extravagances. They go for the British exchequer system, with all the folly and degradation of modern banking superadded and engrafted upon it. And what are the pretexts for this flagrant attempt? The same that were urged by the scrivener, John Blunt, in favor of his South Sea bubble--and by the gambler, John Law, in favor of the Mississippi scheme. To relieve the public distress--to aid the government and the people--to make money plenty, and to raise the price of property and wages: these are the pretexts which usher in our exchequer scheme, and which have ushered in all the paper money bubbles and projects which have ever afflicted and disgraced mankind. Relief to the people has been the pretext for the whole; and they have all ended in the same way--in the enrichment of sharpers--the plunder of nations--and the shame of governments. All these schemes have been brought forward in the same way, and although base upon their face, and clearly big with shame and ruin, and opposed by the wise and good of the times, yet there seem to be seasons of national delusion when the voice of judgment, reason, and honor is drowned under the clamor of knaves and dupes; and when the highest recommendation of a new plan is its absolute folly, knavery, and audacity. Thus it was in England during the reign of the moneyed corporations under the protection of Walpole. Wise men opposed all the mad schemes of that day, and exposed in advance all their disastrous and disgraceful issues. Mr. Shippen, Sir Joseph Jekyll, Mr. Barnard, Sir William Wyndham, Mr. Pulteney, Lord Morpeth (that Howard blood which has not yet degenerated), all these and many others opposed the South Sea, exchequer issues, and other mad schemes of their day--to be overpowered then, but to be remembered, and quoted with honor now. The chancellor of France, the wise and virtuous D'Aguesseau, was exiled from Paris by the Regent Duke of Orleans for opposing and exposing the Mississippi scheme of the gambler, John Law; but his name lives in the pantheon of history; and I take a pleasure in citing it here, in the American Senate, as well in honor to him, as to encourage others to sacrifice themselves in the noble task of resisting the mad delusions of the day. Every nation has its seasons of delusion. They seem to come, like periodical epidemics, once in so many ages or centuries; and while they rage, neither morals nor reason can make head against them. The have to run out. We have just had our season of this delusion, when every folly, from a national bank whose notes were to circulate in China, to the morus multicaulis whose leaves were to breed fortunes to the envied possessors; when every such folly had its day of triumph and exultation over reason, judgment, morals and common sense. Happily this season is passing away--the delusion is wearing off--before this cabinet plan of a government bank, with its central board, its fifty-two branches, its national engine to strike paper, its brokerage and exchange dealings, its Cheapside and Change-Alley operations in real business transactions, its one-half of one per centum profits, its three dollars in paper money to any one who was fool enough to deposit one dollar in the hard: happily our season of delusion is passing off before this monstrous scheme was presented. Otherwise, its adoption would have been inevitable. Its very monstrosity would have made it irresistibly captivating to the diseased public appetite if presented while still in its morbid state.
But the senator from Virginia who sits over the way [Mr. RIVES], who has spoken in this debate, and who appears as a quasi defender of this cabinet plan of relief, he demands if the senator from Missouri (my poor self) will do nothing to relieve the distress of the people and of the government? He puts the question to me, and I answer it readily; yes! I will do my part towards relieving this distress, but not exactly in the mode which he seems to prefer--not by applying a cataplasm of lamp-black and rags to the public wounds! whether that cataplasm should be administered by a league of coon-box banks in the States, or by a Biddle king bank in Philadelphia, or by a Walpole exchequer bank in Washington city. I would relieve the distress by the application of appropriate remedies to notorious diseases--a bankrupt act to bankrupt banks--taxation to bank issues--restoration of the land revenue to its proper destination--the imposition of economy upon this taxing, borrowing, squandering, gold-hating, paper-loving administration; and by restoring, as soon as possible, the reign of democracy, economy, and hard money.
The distress! still the distress. Distress, still the staple of all the whig speeches made here, and of all the cabinet reports which come down to us. Distress is the staple of the whole. "Motley is their only wear." Why, sir, I have heard about that distress before; and I am almost tempted to interrupt gentlemen in the midst of their pathetic rehearsals as the Vicar of Wakefield interrupted Jenkinson in the prison, when he began again the same learned dissertation upon the cosmogony or creation of the world; and gave him the same quotations from Sanconiathan, Manetho, Berosus, and Lucanus Ocellus, with which he entertained the good old Vicar at the fair, while cheating him out of Blackberry, after having cheated Moses out of the colt. You know the incident, said Mr. B. (addressing himself to Mr. Archer, who was nodding recognition), you remember the incident, and know the Vicar begged pardon for interrupting so much learning, with the declaration of his belief that he had had the honor to hear it all before. In like manner, I am almost tempted to stop gentlemen with a beg-pardon for interrupting so much distress, and declaring my belief that I have heard it all before. Certain it is, that for ten years past I have been accustomed to hear the distress orations on this floor; and for twenty-two years I have been accustomed to see distress in our country; but never have I seen it, or heard of it, that it did not issue from the same notorious fountain--the MONEYED CORPORATIONS--headed and conducted by the Juggernaut of federal adoration, the Biddle King Bank of the United States! I have seen this distress for two and twenty years; first, from 1819 to 1826; then again in 1832--'33--'34--'37--'39; and I see something of it now. The Bank of the United States commenced the distress in 1819, and gave a season of calamity which lasted as long as one of the seven years' plagues of Egypt. It was a seven years' agony; but at that time distress was not the object, but only the effect of her crimes and follies. In 1832 she renewed the distress as an object per se and propter se to force a renewal of her charter. In 1833-'34 she entered upon it with new vigor--with vast preparation--upon an immense scale--and all her forces--to coerce a restoration of the deposits, which the patriot President had saved by taking from her. In 1837 she headed the conspiracy for the general suspension (and accomplished it by the aid of the deposit distribution act) for the purpose of covering up and hiding her own insolvency in a general catastrophe, and making the final, agonizing death-struggle, to clutch the re-charter. In 1839 she forced the second suspension (which took place all south and west of New York) and endeavored to force it all north and east of that place, and make it universal, in order to conceal her own impending bankruptcy. She failed in the universality of this second suspension only for want of the means and power which the government deposits would have given her. She succeeded with her limited means, and in her crippled condition, over three-fourths of the Union; and now the only distress felt is in the places which have felt her power;--in the parts of the country which she has regulated--and arises from the institutions which have followed her lead--obeyed her impulse--imitated her example--and now keep up, for their own profit, and on their own account, the distress of which they were nothing but the vicarious agents in the beginning. Sir, there has been no distress since 1819 which did not come from the moneyed corporations; and since 1832, all the distress which we have seen has been factitious and factious--contrived of purpose, made to order, promulgated upon edict--and spread over the people, in order to excite discontents against the administration, to overturn the democracy, to re-establish federalism, to unite bank and state--and to deliver up the credit and revenue of the Union, and the property and industry of the people, to the pillage and plunder of the muckworm nobility which the crimes of the paper system have made the lords of the land. This is the only distress we have seen; and had it not been that God had given our country a Jackson, their daring schemes would all have succeeded; and we and our children, and all the property and labor of our country, would have been as completely tributary to the moneyed corporations of America, as the people of Great Britain are to the Change-alley lords who hold the certificates of their immense national debt.
Distress!--what, sir, are not the whigs in power, and was not all distress to cease when the democracy was turned out? Did they not carry the elections? Has Mr. Van Buren not gone to Kinderhook? Is General Jackson not in the Hermitage? Are democrats not in the minority in Congress, and expelled from office every where? Were not "Tippecanoe and Tyler too" both elected? Is not whiggery in entire possession of the government? Have they not had their extra session, called to relieve the country, and passed all the relief measures, save one?--all save one!--all except their national bank, of which this fine exchequer bank is to be the metempsychosis.
The cry is distress! and the remedy a national poultice of lamp-black and rags! This is the disease, and this the medicine. But let us look before we act. Let us analyze the case--examine the pathology of the disease--that is the word, I believe (looking at Dr. LINN, who nodded assent), and see its cause and effect, the habits and constitution of the patient, and the injuries he may have suffered. The complaint is, distress: the specifications are, depreciated currency, and deranged exchanges. The question is, where? all over the Union? not at all--only in the South and West. All north and east of New York is free from distress--the exchanges fair--the currency at par: all south and west of that city the distress prevails--the exchanges (as they are called) being deranged and the currency depreciated. Why? Because, in one quarter--the happy quarter--the banks pay their debts: in the other--the distressed quarter--they refuse to pay. Here then is the cause, and the effect. This is the analysis of the case--the discovery of the nature and locality of the disease--and the key to its cure. Make the refractory banks comply with their promises; and there is an end of depreciated paper and deranged exchanges, and of all the distress which they create; and that without a national bank, or its base substitute, an exchequer bank; or a national institution of any kind to strike paper money. Make the delinquent banks pay up, or wind up. And why not? Why should not the insolvent wind up, and the solvent pay up? Why should not the community know the good from the bad? Suspension puts all on a level, and the community cannot distinguish between them. Our friend Sancho (looking at Mr. MOUTON) has a proverb that suits the case: "De noche todos los gatos son pardos."
"M. MOUTON: 'De nuit tous les chats sont gris.'"
"Mr. BUCHANAN: What is all that?"
"Mr. BENTON: It is this: Our friend, Sancho Panza, says that, in the dark all the cats are of one color. [A laugh.] So of these banks. In a state of suspension they are all of one credit; but as the light of a candle soon discriminates the black cats from the white ones, so would the touch of a bankrupt act speedily show the difference between a rotten bank and a solvent one.
But currency--currency--a national currency of uniform value, and universal circulation: this is what modern whigs demand, and call upon Congress to give it; meaning all the while a national currency of paper money. I deny the power of Congress to give it, and aver its folly if it had. The word currency is not in the constitution, nor any word which can be made to signify paper money. Coin is the only thing mentioned in that instrument; and the only power of Congress over it is to regulate its value. It is an interpolation, and a violation of truth to say that the constitution authorizes Congress to regulate the value of paper money, or to create paper money. It is a calumny upon the constitution to say any such thing; and I defy the whole phalanx of the paper money party to produce one word in that instrument to justify their imputation. Coin, and not paper, is the thing to be regulated; coin, and not paper, is the currency mentioned and intended; and this coin it is the duty of Congress to preserve, instead of banishing it from circulation. Paper banishes coin; and by creating, or encouraging paper, Congress commits a double violation of the constitution; first, by favoring a thing which the constitution condemns; and, secondly, by destroying the thing which it meant to preserve. But the paper money party say there is not gold and silver enough in the world to answer the purposes of a currency; and, therefore, they must have paper. I answer, if this was true, we must first alter our constitution before we can create, or adopt paper money. But it is not true! the assertion is unfounded and erroneous to the last degree, and implies the most lamentable ignorance of the specie resources of commercial and agricultural countries. The world happens to contain more specie than such countries can use; and it depends upon each one to have its share when it pleases. This is an assertion as easily proved as made; and I proceed to the proof of it, because it is a point on which there is much misunderstanding; and on which the public good requires authentic information. I will speak first of our own country, and of our own times--literally, my own times.
I have some tabular statements on hand, Mr. President, made at the Treasury, on my motion, and which show our specie acquisitions during the time that I have sat in this chair: I say, sat in this chair, for I always sit in the same place. I never change my position, and therefore never have to find it or define it. These tables show our imports of gold and silver during this time--a period of twenty-one years--to have been on the custom-house books, 182 millions of dollars: making an allowance for the amounts brought by passengers, and not entered on the books, and the total importation cannot be less than 200 millions. The coinage at our Mint during the same period, is 66 millions of dollars. The product of our gold mines during that period has been several millions; and many millions of gold have been dragged from their hiding places and restored to circulation by the gold bill of 1834. Putting all together, and our specie acquisitions must have amounted to 220 or 230 millions of dollars in these twenty-one years; being at the average rate of ten or eleven millions per annum.
Not specie enough in the world to do the business of the country! What an insane idea! Do people who talk in that way know any thing about the quantity of specie that there is in the world, or even in Europe and America, and the amount that different nations, according to their pursuits, can employ in their business? If they do not, let them listen to what Gallatin and Gouge say upon the subject, and let them learn something which a man should know before he ventures an opinion upon currency. Mr. Gallatin, in 1831, thus speaks of the quantity of gold and silver in Europe and America:
"The total amount of gold and silver produced by the mines of America, to the year 1803, inclusively, and remaining there or exported to Europe, has been estimated by Humboldt at about five thousand six hundred millions of dollars; and the product of the years 1804-1830, may be estimated at seven hundred and fifty millions. If to this we add one hundred millions, the nearly ascertained product, to this time, of the mines of Siberia, about four hundred and fifty millions for the African gold dust, and for the product of the mines of Europe (which yielded about three millions a year, in the beginning of this century), from the discovery of America to this day, and three hundred millions for the amount existing in Europe prior to the discovery of America, we find a total not widely differing from the fact, of seven thousand two hundred millions of dollars. It is much more difficult to ascertain the amount which now remains in Europe and America together. The loss by friction and accidents might be estimated, and researches made respecting the total amount which has been exported to countries beyond the Cape of Good Hope; but that which has been actually consumed in gilding, plated ware, and other manufactures of the same character, cannot be correctly ascertained. From the imperfect data within our reach, it may, we think, be affirmed, that the amount still existing in Europe and America certainly exceeds four thousand, and most probably falls short of five thousand millions of dollars. Of the medium, or four thousand five hundred millions, which we have assumed, it appears that from one-third to two-fifths is used as currency, and that the residue consists of plate, jewels, and other manufactured articles. It is known, that of the gross amount of seven thousand two hundred millions of dollars, about eighteen hundred millions, or one-fourth of the whole in value, and one-forty-eighth in weight, consisted of gold. Of the four thousand five hundred millions, the presumed remaining amount in gold and silver, the proportion of gold is probably greater, on account of the exportation to India and China having been exclusively in silver, and of the greater care in preventing every possible waste in an article so valuable as gold."
Upon this statement, Mr. Gouge, in his Journal of Banking, makes the following remarks:
"We begin to-day with Mr. Gallatin's estimate of the quantity of gold and silver in Europe and America. In a work published by him in 1831, entitled 'Considerations on the Currency and Banking system of the United States,' he estimates the amount of precious metals in these two quarters of the world at between four thousand and five thousand million dollars. This, it will be recollected, was ten years ago. The amount has since been considerably increased, as the mines have annually produced millions, and the demand for the China trade has been greatly diminished.
"Taking the medium, however, of the two sums stated by Mr. Gallatin--four thousand five hundred million dollars--and supposing the population of Europe and America to be two hundred and seventy-seven millions, it will amount to sixteen dollars and upwards for every man, woman, and child, on the two continents. The same gentleman estimates the whole amount of currency in the United States in 1829, paper and specie together at only six dollars a head.
"It is not too much to say, that if the natural laws of supply and demand had not been interfered with, the United States would have, in proportion to population, four, five, six, seven, yea, eight times as much gold and silver as many of the countries of Europe. Take it at only the double of the average for the population of the two continents, and it will amount to thirty-two dollars a head, or to five hundred and fourteen millions. This would give us one-ninth part of the stock of gold and silver of Europe and America, while our population is but one-sixteenth: but for the reasons already stated, under a natural order of things, we should have, man for man, a much larger portion of the precious metals, than falls to the lot of most countries of Europe.
"Suppose, however, we had but the average of sixteen dollars a head. This would amount to two hundred and fifty-seven millions.
"On two points do people (that is, some people) capitally err. First, in regard to the quantity of gold and silver in the world: this is much greater than they imagine it to be. Next, in regard to the amount of money required for commercial purposes: this is much smaller than they suppose it to be. Under a sound money, sound credit, and sound banking system, ten dollars a head would probably be amply sufficient in the United States."
The points on which the statesman's attention should be fixed in these statements are: 1. The quantity of gold and silver in Europe and America, to wit, $4,500,000,000. 2. Our fair proportion of that quantity, to wit, $257,000,000, or $16 per head. 3. Our inability to use more than $10 a head. 4. The actual amount of our whole currency, paper and specie, in 1830 (when the Bank of the United States was in all its glory), and which was only $6 a head. 5. The ease with which the United States can supply itself with its full proportion of the whole quantity if it pleased, and have $16 per head (if it could use it, which it cannot) for every human being in the Union.
These are the facts which demand our attention, and it is only at a single point that I now propose to illustrate, or to enforce them; and that is, as to the quantity of money per head which any nation can use. This differs among different nations according to their pursuits, the commercial and manufacturing people requiring most, because their payments are daily or weekly for every thing they use: food, raiment, labor and raw materials. With agricultural people it is less, because they produce most of what they consume, and their large payments are made annually from the proceeds of the crops. Thus, England and France (both highly manufacturing and commercial) are ascertained to employ fourteen dollars per head (specie and paper combined) for their whole population: Russia, an agricultural country, is ascertained to employ only four dollars per head; and the United States, which is chiefly agricultural, but with some considerable admixture of commerce and manufactures, ten dollars are believed to be the maximum which they could employ. In this opinion I concur. I think ten dollars per head, an ample average circulation for the Union; and it is four dollars more than we had in 1830, when the Bank of the United States was at the zenith of its glory. The manufacturing and commercial districts might require more--all the agricultural States less;--and perhaps an agricultural State without a commercial town, or manufactures, like Mississippi, could not employ five dollars per head. Here then are the results: Our proportion of the gold and silver in Europe and America is two hundred and fifty-seven millions of dollars: we had but twenty millions in 1830: we have ninety millions now; and would require but eighty millions more (one hundred and seventy millions in the whole) in the present state of our population, slaves included (for their labor is to be represented by money and themselves supported), to furnish as much currency, and that in gold and silver, as the country could possibly use; consequently sustaining the prices of labor and property at their maximum amount. Of that sum, we now have about the one-half in the country, to wit, ninety millions; making five dollars per head; and as that sum was gained in seven years of Jacksonian policy, it follows of course, that another seven years of the same policy, would give us the maximum supply that we could use of the precious metals; and that gold, silver, and the commercial bill of exchange, could then constitute the safe, solid, constitutional, moral, and never-failing currency of the Union.
The facility with which any industrious country can supply itself with a hard-money currency--can lift itself out of the mud and mire of depreciated paper, and mount the high and clean road of gold and silver; the ease with which any industrious people can do this, has been sufficiently proved in our own country, and in many others. We saw it in the ease with which the Jackson policy gained us ninety millions of dollars in seven years. We saw it at the close of the Revolution, when the paper money sunk to nothing, ceased to circulate, and specie re-appeared, as by magic. I have asked the venerable Mr. MACON how long it was after paper stopped, before specie re-appeared at that period of our history? his answer was: No time at all. As soon as one stopped, the other came. We have seen it in England at the end of the long bank suspension, which terminated in 1823. Parliament allowed the bank four years to prepare for resumption: at the end of two years--half the time--she reported herself ready--having in that short space accumulated a mass of twenty millions sterling (one hundred millions of dollars) in gold; and, above all, we have seen it in France, where the great Emperor restored the currency in the short space of six years, from the lowest degree of debasement to the highest point of brilliancy. On becoming First Consul, in 1800, he found nothing but depreciated assignats in the county:--in six years his immortal campaigns--Austerlitz, Jena, Friedland--all the expenses of his imperial court, surpassing in splendor that of the Romans, and rivalling the almost fabulous magnificence of the Caliphs of Bagdad--all his internal improvements--all his docks, forts, and ships--all the commerce of his forty millions of subjects--all these were carried on by gold and silver alone; and from having the basest currency in the world, France, in six years, had near the best; and still retains it. These instances show how easy it is for any country that pleases to supply itself with an ample currency of gold and silver--how easy it will be for us to complete our supplies--that in six or seven years we could saturate the land with specie! and yet we have a formal cabinet proposition to set up a manufactory of paper money!
The senator from Mississippi [Mr. WALKER] who sits on my right, has just visited the island of Cuba, and has told us what he has seen there--a pure metallic currency of gold--twelve millions of dollars of it to a population of one million of souls, half slaves--not a particle of paper money--prices of labor and property higher than in the United States--industry active--commerce flourishing: a foreign trade of twenty-four millions of dollars, which, compared to population and territory, is so much greater than ours that it would require ours to be four hundred and twenty-five millions to be equal to it! This is what the senator from Mississippi tells us that he has seen; and would to God that we had all seen it. Would to God that the whole American Congress had seen it. Devoutly do I wish that it was the custom now, as in ancient times, for legislators to examine the institutions of older countries before they altered those of their own country. The Solons and Lycurguses of antiquity would visit Egypt, and Crete, and other renowned places in the East, before they would touch the laws of Sparta or Athens; in like manner I should rejoice to see our legislators visit the hard money countries--Holland, France, Cuba--before they went further with paper money schemes in our own country. The cabinet, I think, should be actually put upon such a voyage. After what they have done, I think they should be shipped on a visit to the lands of hard money. And although it might seem strange, under our form of government, thus to travel our President and cabinet, yet I must be permitted to say that I can find constitutional authority for doing so, just as soon as they can find constitutional authority for sending such a scheme of finance and currency as they have spread before us.
Holland and Cuba have the best currencies in the world: it is gold and the commercial bill of exchange, with small silver for change, and not a particle of bank paper. France has the next best: it is gold, with the commercial bill of exchange, much silver, and not a bank note below five hundred francs (say one hundred dollars). And here let me do justice to the wisdom and firmness of the present king of the French. The Bank of France lately resolved to reduce the minimum size of its notes to two hundred francs (say forty dollars). The king gave them notice that if they did it, the government would consider it an injury to the currency, and would take steps to correct the movement. The Bank rescinded its resolution; and Louis Philippe, in that single act (to say nothing of others) showed himself to be a patriot king, worthy of every good man's praise, and of every legislator's imitation. The United States have the basest currency in the world: it is paper, down to cents; and that paper supplied by irresponsible corporations, which exercise the privilege of paying, or not, just as it suits their interest or politics. We have the basest currency upon the face of the earth; but it will not remain so. Reform is at hand; probably from the mild operation of law; if not, certainly from the strong arm of ruin. God has prescribed morality, law, order, government, for the conduct of human affairs; and he will not permit these to be too long outraged and trampled under foot. The day of vindicating the outraged law and order of our country, is at hand; and its dawn is now visible. The excess of bank enormity will cure itself under the decrees of Providence; and the cure will be more complete and perfect, than any that could come from the hands of man.
It may seem paradoxical, but it is true, that there is no abundant currency, low interest, and facility of loans, except in hard money countries: paper makes scarcity, high interest, usury, extortion, and difficulty of borrowing. Ignorance supposes that to make money plenty, you must have paper: this is pure nonsense. Paper drives away all specie, and then dies itself for want of specie; and leaves the country penniless until it can recruit.
The Roman historians, Mr. President, inform us of a strange species of madness which afflicted the soldiers of Mark Antony on their retreat from the Parthian war. Pressed by hunger they ate of unknown roots and herbs which they found along the base of the Armenian mountains, and among the rest, of one which had the effect of depriving the unfortunate man of memory and judgment. Those who ate of this root forgot that they were Romans--that they had arms--a general--a camp, and their lives, to defend. And wholly possessed of a single idea, which became fixed, they neglected all their duties and went about turning over all the stones they could find, under the firm conviction that there was a great treasure under it which would make them rich and happy. Nothing could be more deplorable, say the historians, than to see these heroic veterans, the pride of a thousand fields, wholly given up to this visionary pursuit, their bodies prone to the earth, day after day, and turning over stones in search of this treasure, until death from famine, or the Parthian arrow, put an end at once to their folly and their misery. Such is the account which historians give us of this strange madness amongst Antony's soldiers; and it does seem to me that something like it has happened to a great number of our Americans, and even to our cabinet council--that they have forgotten that we have such a thing as a constitution--that there are such things as gold and silver--that there are limitations upon government power--and that man is to get his living by toil and labor, and the sweat of his brow, and not by government contrivances; that they have forgot all this, and have become possessed of a fixed idea, that paper money is the summum bonum of human life; that lamp-black and rags, perfumed with the odor of nationality, is a treasure which is to make everybody rich and happy; and, thereupon incontinently pursue this visionary treasure--this figment of the brain--this disease of the mind. Possessed of this idea, they direct all their thoughts to the erection of a national institution--no matter what--to strike paper money, and circulate it upon the faith of the credit and revenues of the Union: and no argument, no reason, no experience of our own, or of other nations, can have the least effect in dislodging that fixed and sovereign conception. To this we are indebted for the cabinet plan of the federal exchequer and its appurtenances, which has been sent down to us. To this we are indebted for the crowds who look for relief from the government, instead of looking for it in their own labor, their own industry, and their own economy. To this we are indebted for all the paper bubbles and projects which are daily presented to the public mind: and how it all is to end, is yet in the womb of time; though I greatly suspect that the catastrophe of the federal exchequer and its appurtenances will do much towards curing the delusion and turning the public mind from the vain pursuit of visionary government remedies, to the solid relief of hard money, hard work, and instant compulsion of bank resumption.
The proposition which has been made by our President and cabinet, to commence a national issue of paper money, has had a very natural effect upon the public mind, that of making people believe that the old continental bills are to be revived, and restored to circulation by the federal government. This belief, so naturally growing out of the cabinet movement, has taken very wide and general root in the public mind; and my position in the Senate and connection with the currency questions, have made me the centre of many communications on the point. Daily I receive applications for my opinion, as to the revival of this long deceased and venerable currency. The very little boys at the school have begged my little boy to ask their father about it, and let them know, that they may hunt up the one hundred dollar bills which their mothers had given them for thumb papers, and which they had thrown by on account of their black and greasy looks. I receive letters from all parts of the Union, bringing specimens of these venerable relics, and demanding my opinion of the probability of their resuscitation. These letters contain various propositions--some of despair--some of hope--some of generous patriotism--and all evidently sincere. Some desire me to exhibit the bundle they enclose to the Senate, to show how the holders have been cheated by paper money; some want them paid; and if the government cannot pay at present, they wish them funded, and converted into a national stock, as part of the new national debt. Some wish me to look at them, on my own account; and from this sample, to derive new hatred to paper money, and to stand up to the fight with the greater courage, now that the danger of swamping us in lamp-black and rags is becoming so much greater than ever. Others, again, rising above the degeneracy of the times, and still feeling a remnant of that patriotism for which our ancestors were so distinguished, and which led them to make so many sacrifices for their country, and hearing of the distress of the government and its intention to have recourse to an emission of new continental bills, propose at once to furnish it with a supply of the old bills. Of this number is a gentleman whose letter I received last night, and which, being neither confidential in its nature, nor marked so, and being, besides, honorable to the writer, I will, with the leave of the Senate, here read:
"EAST WEYMOUTH, MASSACHUSETTS, January 8, 1842.
"DEAR SIR:--Within you have a few continentals, or promises to pay in gold or silver, which may now be serviceable to the Treasury, which the whigs have bankrupted in the first year of their reign, and left members without pay for their landlords. They may serve to start the new fiscality upon; and, if they should answer the purpose, and any more are wanted, please let me know, and another batch will come on from your friend and servant,
"LOWELL BICKNELL.
"Hon. THOMAS H. BENTON, United States Senate, Washington city."
This is the letter, resumed Mr. B., and these the contents (holding up a bundle of old continentals). This is an assortment of them, beginning at nine dollars, and descending regularly through eight, seven, six, five, four, three, two, one, and the fractional parts of a dollar, down to the one-sixth part of a dollar. I will read the highest and lowest in the bundle, as a sample of the whole. The highest runs thus:
"This bill entitles the bearer to receive nine Spanish milled dollars, or the value thereof in gold or silver, according to the resolves of the Congress held at Philadelphia, the 10th day of May, 1775.
"Signed,
WILLIAM CRAIG."
The margins are covered with the names of the States, and with the words continental currency, in glaring capitals, and the Latin motto, Sustine vel abstine (Sustain it, or let it alone). The lowest runs thus:
"One-sixth of a dollar, according to a resolve of Congress passed at Philadelphia, February 17th, 1776.
"Signed,
B. BRANNAN."
The device on this note is a sun shining through a glass, with the word fugio (I fly) for the motto--a motto sufficiently appropriate, whether emblematic of the fugitive nature of time, or of paper money.
These are a sample of the bills sent me in the letter which I have just read; and now the mind naturally reverts to the patriotic proposition to supply the administration with these old bills instead of putting out a new emission. For myself I incline to the proposition. If the question is once decided in favor of a paper emission, I am decidedly in favor of the old continental currency in preference to any new edition--as much so as I prefer the old Revolutionary whigs to the new whigs of this day. I prefer the old bills; and that for many and cogent reasons. I will enumerate a few of these reasons:--1. They are ready made to our hand, and will save all the expense and time which the preparations of new bills would require. The expense would probably be no objection with this administration; but, in the present condition of the Treasury, the other consideration, that of time, must have great weight. 2. They cannot be counterfeited. Age protects them from that. The wear and tear of seventy long years cannot be impressed on the face of the counterfeits, cunning as their makers may be. 3. Being limited in quantity, and therefore incapable of contraction or inflation at the will of jobbers in stocks or politics, they will answer better for a measure of values. 4. They are better promises than any that will be made at this day; for they are payable in Spanish milled dollars, which are at a premium of three per cent, in our market over other dollars; and they are payable in gold or silver, disjunctively, so as to give the holder his option of the metals. 5. They are made by better men than will make the bills of the present day--men better known to Europe and America--of higher credit and renown--whose names are connected with the foundation of the republic, and with all the glorious recollections of the revolution. Without offence to any, I can well say that no Congress of the present day can rank with our Revolutionary assemblies who signed the Declaration of Independence with ropes round their necks, staked life, honor, and fortune in a contest where all the chances were against them; and nobly sustained what they had dared to proclaim. We cannot rank with them, nor our paper ever have the credit of theirs. 6. They are of all sizes, and therefore ready for the catastrophe of the immediate flight, dispersion, absconding, and inhumation of all the specie in the country, for which the issue of a government paper would be the instant and imperative signal. Our cabinet plan comes no lower than five dollars, whereby great difficulty in making change at the Treasury would accrue until a supplementary act could be passed, and the small notes and change tickets be prepared. The adoption of the old continental would prevent this balk, as the notes from one to ten dollars inclusive would be ready for all payments which ended in even dollars; and the fractional notes would be ready for all that ended in shillings or sixpences. 7. And, finally, because it is right in itself that we should take up the old continentals before we begin to make new ones. For these, and other reasons, I am bold to declare that if we must have a Congress paper-money, I prefer the paper of the Congress of 1776 to that of 1842.
Sir, the Senate must pardon me. It is not my custom to speak irreverently of official matters; but there are some things too light for argument--too grave for ridicule--and which it is difficult to treat in a becoming manner. This cabinet plan of a federal exchequer is one of those subjects; and to its strange and novel character, part tragic and part farcical, must be attributed my more than usually defective mode of speaking. I plead the subject itself for the imperfection of my mode of treating it.
XCI. THE THIRD FISCAL AGENT, ENTITLED A BOARD OF EXCHEQUER
This measure, recommended by the President, was immediately taken up in each branch of Congress. In the House of Representatives a committee of a novel character--one without precedent, and without imitation--was created for it: "A select committee on the finances and the currency," composed of nine members, and Mr. Caleb Cushing its chairman. Through its chairman this committee, with the exception of two of its members (Mr. Garret Davis of Kentucky, and Mr. John P. Kennedy, of Maryland), made a most elaborate report, recommending the measure, and accompanied by a bill to carry it into effect. The ruling feature of the whole plan was a national currency of paper-money, to be issued by the federal government, and to be got into circulation through payments made by it, and by its character of receivability in payment of public dues. To clear the ground for the erection of this new species of national currency, all other kinds of currency were reviewed and examined--their good and their bad qualities stated--and this government currency pronounced to combine the good qualities, and to avoid the bad of all other kinds. National bank-notes were condemned for one set of reasons: local bank-notes for another: and as for gold and silver, the reporter found so many defects in such a currency, and detailed them with such precision, that it looked like drawing up a bill of indictment against such vicious substitutes for money. In this view the report said
"But the precious metals themselves, in addition to their uses for coin, are likewise, whether coined or uncoined, a commodity, or article of production, consumption, and merchandise. Themselves are a part of that general property of the community, of all the rest of which they are the measure; and they are of actual value different in different places, according to the contingencies of government or commerce. Their aggregate quantity is subject to be diminished by casual destruction or absorption in the arts of manufacture, or to be diminished or augmented by the greater or less number or productiveness of mines; and thus their aggregate value relatively to other commodities is liable to perpetual change. The influence of these facts upon prices, upon public affairs, and upon commerce, is visible in all the financial history of modern times. Besides which, coin is subject to debasement, or to be made a legal tender, at a rate exceeding its actual value, by the arbitrary act of the government, which controls its coinage and prescribes its legal value. In times when the uses of a paper currency and of public stocks were not understood or not practised, and communities had not begun to resort to a paper symbol or nominal representative of money, capable of being fabricated at will, the adulteration of coin, instead of it, was, it is well known, the frequent expedient of public necessity or public cupidity to obtain relief from some pressing pecuniary embarrassment. Moreover, the precious metals, though of less bulk in proportion to their value than most other commodities, yet cannot be transported from place to place without cost and risk; coin is subject to be stolen or lost, and in that case cannot be easily identified, so as to be reclaimed; the continual counting of it in large sums is inconvenient; it would be unsafe, and would cause much money to remain idle and unfruitful, if every merchant kept constantly on hand a sum of coin for all his transactions; and the displacement of large amounts of coin, its transfer from one community or one country to another, is liable to occasion fluctuations in the value of property or labor, and to embarrass commercial operations."
Having thus shown the demerit of all other sorts of currency, and cleared the way for this new species, the report proceeds to recommend it to the adoption of the legislature, with an encomium upon the President, and on the select committee on the finances and the currency, who had so well discharged their duty in proposing it; thus:
"The President of the United States, in presenting this plan to Congress, has obeyed the injunction of the constitution, which requires him to recommend to their consideration such measures as he shall judge necessary and expedient; he has fully redeemed the engagements in this respect which he had previously made to Congress: and thus he has faithfully discharged his whole duty to the constitution and the Union. The committee, while animated by the highest respect for his views, have yet deemed it due to him, to themselves, to the occasion, and to the country, to give to those views a free and unbiassed examination. They have done so; and in so doing, they have also discharged their duty. They respectfully submit the result to the House in the bill herewith reported. They believe this measure to contain the elements of usefulness and public good; and, as such, they recommend it to the House. But they feel no pride of opinion concerning it; and, if in error, they are ready to follow the lead of better lights, if better there be, from other quarters; being anxious only to minister to the welfare of the people whom they represent. It remains now for Congress to act in the matter; the country demands that in some way we shall act; and the times appeal to us to act with decision, with moderation, with impartiality, with independence. Long enough, the question of the national finances has been the sport of passion and the battle-cry of party. Foremost of all things, the country, in order to recover itself, needs repose and order for its material interest, and a settled purpose in that respect (what it shall be is of less moment, but at any rate some settled purpose) on the part of the federal government. If, careless of names and solicitous only for things, aiming beyond all intermediate objects to the visible mark of the practicable and attainable good--if Congress shall in its wisdom concur at length in some equitable adjustment of the currency question, it cannot fail to deserve and secure the lasting gratitude of the people of the United States."
After reading this elaborate report, Mr. Cushing also read the equally elaborate bill which accompanied it: and that was the last of the bill ever heard of in the House. It was never called up for consideration, but died a natural death on the calendar on which it was placed. In the Senate the fate of the measure was still more compendiously decided. The President's recommendation, the ample report of the Secretary of the Treasury, and the bill drawn up at the Treasury itself, were all sent to the Committee of Finance; which committee, deeming it unworthy of consideration, through its chairman, Mr. Evans, of Maine, prayed to be discharged from the consideration of it: and were so discharged accordingly. But, though so lightly disposed of, the measure did not escape ample denunciation. Deeming the proposition an outrage upon the constitution, an insult to gold and silver, and infinitely demoralizing to the government and dangerous to the people, Mr. Benton struck another blow at it as it went out of the Senate to the committee. It was on the motion to refer the subject to the Finance Committee, that he delivered a speech of three hours against it: of which some extracts were given in Chapter XC.
XCII. ATTEMPTED REPEAL OF THE BANKRUPT ACT
As soon as Congress met in the session 1841-'2 the House of Representatives commenced the repeal of this measure. The period for the act to take effect had been deferred by an amendment in the House from the month of November, which would be before the beginning of the regular session, to the month of February--for the well-known purpose of giving Congress an opportunity to repeal it before it went into operation. The act was odious in itself, and the more so from the manner in which it was passed--coercively, and by the help of votes from those who condemned it, but who voted for it to prevent its friends from defeating the bank bill, and the land distribution bill. Those two measures were now passed, and many of the coerced members took their revenge upon the hated bill to which they had temporarily bowed. The repeal commenced in the House, and had a rapid progress through that body. A motion was made to instruct the Judiciary Committee to bring in a bill for the repeal; and that motion succeeded by a good majority. The bill was brought in, and, under the pressure of the previous question, was quickly brought to a vote. The yeas were 124--the nays 96. It then went to the Senate, where it was closely contested, and lost by one vote--22 for the repeal: 23 against it. Thus a most iniquitous act got into operation, by the open joining of measures which could not pass alone; and by the weak calculation of some members of the House, who expected to undo a bad vote before it worked its mischief. The act was saved by one vote; but met its fate at the next session--having but a short run; while the two acts which it passed were equally, and one of them still more short lived. The fiscal bank bill, which was one that it carried, never became a law at all: the land distribution bill, which was the other, became a law only to be repealed before it had effect. The three confederate criminal bills which had mutually purchased existence from each other, all perished prematurely, fruitless and odious--inculcating in their history and their fate, an impressive moral against vicious and foul legislation.