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canvassed and censured, where their reasons for it are not known, or cannot be understood. The legislature holds the public purse. It fixes the compensation of all other departments : it applies, as well as raises, all revenue. It is a numerous body, and necessarily carries along with it a great force of public opinion. Its members are public men, in constant contact with one another, and with their constituents. It would seem to be plain enough, that, without constitutional provisions which should be fixed and certain, such a department, in case of excitement, would be able to encroach on the judiciary.—Therefore is it, that a security of judicial independence becomes necessary; and the question is, whether that independence be at present sufficiently secured.
The constitution being the supreme law, it follows of course, that every act of the legislature, contrary to that law, must be void. But who shall decide this question? Shall the legislature itself decide it? If so, then the constitution ceases to be a legal and becomes only a moral restraint on the legislature. If they, and they only, are to judge whether their acts be conformable to the constitution, then the constitution is admonitory or advisory only; not legally binding; because, if the construction of it rest wholly with them, their discretion, in particular cases, may be in favor of very erroneous and dangerous constructions. Hence the courts of law, necessarily, when the case arises, must decide upon the validity of particular acts.—These cases are rare, at least in this commonwealth; but they would probably be less so, if the power of the judiciary, in this respect, were less respectable than it is.
It is the theory and plan of the constitution to restrain the legislature, as well as other departments, and to subject their acts to judicial decision, whenever it appears that such acts infringe constitutional limits; and without this check, no certain limitation could exist on the exercise of legislative power. The constitution, for example, declares, that the legislature shall not suspend the benefit of the writ of habeas corpus, except under certain limitations. If a law should happen to be passed restraining personal liberty, and an individual, feeling oppressed by it, should apply for his habeas corpus, must not the judges decide what is the benefit of habeas corpus, intended by the constitution; what it is to suspend it, and whether the acts of the legislature do, in the given case, conform to the constitution? All these questions would of course arise. The judge is bound by his oath to decide according to law.—The constitution is the supreme law. Any act of the legislature, therefore, inconsistent with that supreme law, must yield to it; and any judge, seeing this inconsistency, and yet giving effect to the law, would violate both his duty and his oath. But it is evident that this power, to be useful, must be lodged in independent hands. If the legislature may remove judges at pleasure, assigning no cause for such removal, of course it is not to be expected that they would often find decisions against the constitutionality of their own acts. If the legislature should, unhappily, be in a temper to do a violent thing, it would probably take care to see that the bench of justice was so constituted as to agree with it in opinion.
It is unpleasant to allude to other states for negative examples; yet, if any one were inclined to the inquiry, it might be found, that cases had happened in which laws, known to be at best very questionable as to their consistency with the constitution, had been passed; and at the same session, effectual measures taken, under the power of removal by address, to create a new bench. Such a coincidence might be accidental; but the happening of such accidents often would destroy the balance of free governments. The history of all the states, I believe, shows the necessity of settled limits to legislative power. There are reasons, entirely consistent with upright and patriotic motives, which, nevertheless, evince the danger of legislative encroachments. The subject is fully treated by Mr. Madison, in some numbers of the Federalist, which well deserve the consideration of the convention.
There is nothing, after all, so important to individuals as the upright administration of justice. This comes home to every man; life, liberty, reputation, property, all depend on this.-No government does its duty to the people, which does not make ample and stable provision for the exercise of this part of its powers. Nor is it enough, that there are courts which will deal justly with mere private questions. We look to the judicial tribunal for protection against illegal or unconstitutional acts, from whatever quarter they may proceed. The courts of law, independent judges, and enlightened juries, are citadels of popular liberty, as well as temples of private justice. The most essential rights connected with political liberty, are there canvassed, discussed, and maintained; and if it should at any time so happen that these rights should be invaded, there is no remedy but a reliance on the courts, to protect and vindicate them. There is danger, also, that legislative bodies will sometimes pass laws interfering with other private rights, besides those connected with political liberty. Individuals are too apt to apply to the legislative power to interfere with private cases, or private property; and such applications sometimes meet with favor and support. There would be no security, if these interferences were not subject to some subsequent constitutional revision, where all parties could be heard, and justice administered according to standing laws.
These considerations are among those which, in my opinion, render an independent judiciary equally essential to the preservation of private rights and public liberty. I lament the necessity of deciding this question at the present moment; and should hope, if such immediate decision were not demanded, that some modification of this report might prove acceptable to the committee, since, in my judgment, some provision, beyond what exists in the present constitution, is necessary.
ON THE BANK OF THE UNITED STATES, DELIVERED IN THE HOUSE
OF REPRESENTATIVES OF THE UNITED STATES, JAN. 2, 1815.
On the 21 January, 1815, the bill to incorporate a bank being under consideration, Mr.
Webster moved that it be recommitted to a select committee, with instructions to make
the following alterations, to wit:1. To reduce the capital to twenty-five millions, with liberty to the government to subscribe
on its own account, five millions. 2. To strike out the thirteenth section. 3. To strike out so much of said bill as makes it obligatory on the bank to lend money to
government. 4. To introduce a section providing, that if the bank do not commence its operations with
in the space of months, from the day of the passing of the act, the charter shall
thereby be forfeited. 5. To insert a section allowing interest at the rate of per cent. on any bill or note
of the bank, of which payment shall have been duly demanded, according to its tenor, and refused; and to inflict penalties on any directors who shall issue any bills or notes
during any suspension of specie payment at the bank. 6 To provide that the said twenty-five millions of capital stock shall be composed of five
millions of specie, and twenty millions of any of the stocks of the United States bear
ing an interest of six per cert. or of treasury notes. 7. To strike out of the bill that part of it which restrains the bank from selling its stock
during the war. In support of this motion, the following speech was delivered. The motion did not prevail,
but the bill itself was rejected the same day on the third reading. Some of the main principles of these instructions were incorporated into the charter of the present bank, when that charter was granted the following year; especially those, which were more particularly designed to insure the payment of the notes of the bank in specie, at all times, on demand.
However the House may dispose of the motion before it, I do not regret that it has been made. One object intended by it, at least, is accomplished. It presents a choice, and it shows that the opposition which exists to the bill in its present state, is not an undistinguishing hostility to whatever may be proposed as a national bank, but a hostility to an institution of such a useless and dangerous nature, as it is believed the existing provisions of the bill would establish.
If the bill should be recommitted and amended according to the instructions which I have moved, its principles will be materially changed. The capital of the proposed bank will be reduced from fifty to thirty millions : and composed of specie and stocks in nearly the same proportions as the capital of the former bank of the United States. The obligation to lend thirty millions of dollars to government, an obligation which cannot be performed without committing an act of bankruptcy, will be struck out. The power to suspend the payment of its notes and bills will be abolished, and the prompt and faithful execution of its contracts secured, as far as, from the nature of things, it can be secured. The restriction on the sale of its stocks will be removed, and as it is a monopoly, provision will be made that if it should not commence its operations in reasonable time, the grant shall be forfeited. Thus amended, the bill would establish an institution not unlike the last bank of the United States in any particular which is deemed material, excepting only the legalized amount of capital.
To a bank of this nature I should at any time be willing to give my support, not as a measure of temporary policy, or as an expedient to find means of relief from the present poverty of the treasury; but as an institution of permanent interest and importance, useful to the government and country at all times, and most useful in times of commerce and prosperity.
I am sure, sir, that the advantages which would at present result from any bank, are greatly overrated. To look to a bank, as a source capable, not only of affording a circulating medium to the country, but also of supplying the ways and means of carrying on the war, especially at a time when the country is without commerce, is to expect much more than ever will be obtained. Such highwrought hopes can end only in disappointment. The means of supporting an expensive war are not of quite so easy acquisition. Banks are not revenue. They cannot supply its place. They may afford facilities to its collection and distribution. They may furnish, with convenience, temporary loans to government, in anticipation of its taxes, and render important assistance, in divers ways, to the general operation of finance. They are useful to the state in their proper place and sphere, but they are not sources of national income.
The fountains of revenue must be sunk deeper. The credit and circulation of bank paper are the effects, rather than the causes of a profitable commerce, and a well ordered system of finance. They are the props of national wealth and prosperity, not the foundations of them. Whoever shall attempt to restore the fallen credit of this country, by the creating of new banks, merely that they may create new paper, and that government may have a chance of borrowing where it has not borrowed before, will find himself miserably deceived. It is under the influence of no such vain hopes, that I yield my assent to the establishment of a bank on sound and proper principles. The principal good I expect from it is rather future than present. I do not see, indeed, that it is likely to produce evil at any time. In times to come, it will, I hope, be useful. If it were only to be harmless, there would be sufficient reason why it should be supported, in preference to such a contrivance as is now in contemplation.
The bank which will be erected by the bill, if it should pass in its present form, is of a most extraordinary, and, as I think, alarming nature. The capital is to be fifty millions of dollars; five millions in gold and silver, twenty millions in the public debt created since the war, ten millions in treasury notes, and fifteen millions to be subscribed by government, in stock to be created for that purpose. The ten millions in treasury notes, when received in payment of subscriptions to the bank, are to be funded also in United States' stocks. The stock subscribed by government on its own account, and those in which the treasury notes are to be funded, to be redeemable only at the pleasure of the government. The war stock will be redeemable according to the terms upon which the late loans have been negotiated.
The capital of the bank, then, will be five millions of specie and forty-five millions of government stocks. In other words, the bank will possess five millions of dollars, and the government will owe it forty-five millions. This debt from government, the bank is restrained from selling during the war, and government is excused from paying, until it shall see fit. The bank is also to be under obligation to loan government thirty millions of dollars on demand, to be repaid, not when the convenience or necessity of the bank may require, but when debts due to the bank, from government, are paid; that is, when it shall be the good pleasure of government. This sum of thirty millions is to supply the necessities of government, and to supersede the occasion of other loans. This loan will doubtless be made on the first day of the existence of the bank, because the public wants can admit of no delay. Its condition, then, will be, that it has five millions of specie, if it has been able to obtain so much, and a debt of seventy-five millions, no part of which it can either sell or call in, due to it from government.
The loan of thirty millions to government can only be made by an immediate issue of bills to that amount. If these bills should return, the bank will not be able to pay them. This is certain, and to remedy this inconvenience, power is given to the directors, by the act, to suspend, at their own discretion, the payment of their notes, until the President of the United States shall otherwise order. The President will give no such order, because the necessities of government will compel it to draw on the bank till the bank becomes as necessitous as itself. Indeed, whatever orders may be given or withheld, it will be utterly impossible for the bank to pay its notes. No such thing is expected from it. The first noțe it issues will be dishonored on its return, and yet it will continue to pour out its paper, so long as government can apply it in any degree to its purposes.
What sort of an institution, sir, is this? It looks less like a bank, than a department of government. It will be properly the papermoney department. Its capital is government debts; the amount of its issues will depend on government necessities; government, in effect, absolves itself from its own debts to the bank, and by way of compensation absolves the bank from its own contracts with others. This is, indeed, a wonderful scheme of finance. The government is to grow rich, because it is to borrow without the obligation of repaying, and is to borrow of a bank which issues paper without liability to redeem it. If this bank, like other institutions