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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, alarm

ing 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 note 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

which dull and plodding common sense has erected, were to pay its debts, it must have some limits to its issues of paper, and therefore, there would be a point beyond which it could not make loans to government. This would fall short of the wishes of the contrivers of this system. They provide for an unlimited issue of paper, in an entire exemption from payment. They found their bank, in the first place, on the discredit of government, and then hope to enrich government out of the insolvency of their bank. With them, poverty itself is the main source of supply, and bankruptcy a mine of inexhaustible treasure. They rely not in the ability of the bank, but in its beggary; not in gold and silver collected in its vaults, to pay its debts, and fulfil its promises, but in its locks and bars, provided by statute, to fasten its doors against the solicitations and clamors of importunate creditors. Such an institution, they flatter themselves, will not only be able to sustain itself, but to buoy up the sinking credit of the government. A bank which does not pay, is to guaranty the engagements of a government which does not pay! "John Doe is to become security for Richard Roe." Thus the empty vaults of the treasury are to be filled from the equally empty vaults of the bank, and the ingenious invention of a partnership between insolvents is to restore and reestablish the credit of both.

Sir, I can view this only as a system of rank speculation, and enormous mischief. Nothing in our condition is worse, in my opinion, than the inclination of government to throw itself upon such desperate courses. If we are to be saved, it is not to be by such means. If public credit is to be restored, this is not one of the measures that will help to restore it. If the treasury is exhausted, this bank will not fill it with anything valuable. If a safe circulating medium be wanted for the community, it will not be found in the paper of such a corporation.

I wish, sir, that those who imagine that these objects or any of them will be effected by such a bank as this, would describe the manner in which they expect it to be done. What is the process,

which is to produce these results? If it is perceived, it can be described. The bank will not operate either by miracle or magic. Whoever expects any good from it, ought to be able to tell us in what way that good is to be produced. As yet, we have had nothing but general ideas, and vague and loose expressions. An indefinite and indistinct notion is entertained, nobody here seems to know on what ground, that this bank is to reanimate public credit, fill the treasury, and remove all the evils that have arisen from the depreciation of the paper of the existing banks.

Some gentlemen who do not profess themselves to be, in all respects, pleased with the provisions of the bill, seem to content themselves with an idea that nothing better can be obtained, and that it is necessary to do something. A strong impression that something must be done, is the origin of many bad measures. It is easy, sir, to do something, but the object is to do something useful. better to do nothing than to do mischief. It is much better, in my opinion, to make no bank, than to pass the bill as it now is.

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The interests to be affected by this measure, the finances, the public credit, and the circulating medium of the country are too

important to be hazarded in schemes like these. If we wish to restore the public credit, and to reestablish the finances, we have the beaten road before us. All true analogy, all experience and all just knowledge of ourselves and our condition point one way. A wise and systematic economy, and a settled and substantial revenue, are the means to be relied on; not excessive issues of bank notes, a forced circulation, and all the miserable contrivances to which political folly can resort, with the idle expectation of giving to mere paper the quality of money.

These are all the inventions of a shortsighted policy, vexed and goaded by the necessities of the moment, and thinking less of a permanent remedy, than of shifts and expedients to avoid the present distress. They have been a thousand times adopted, and a thousand times exploded as delusive and ruinous, as destructive of all solid revenue, and incompatible with the security of private property.

It is, sir, sufficiently obvious, that to produce any benefit, this bank must be so constructed, as that its notes shall have credit with the public. The first inquiry, therefore, should be, whether the bills of a bank of this kind will not be immediately and greatly depreciated. I think they will. It would be a wonder if they should not. This effect will be produced by that excessive issue of its paper which the bank must make in its loan to government. Whether its issues of paper are excessive, will depend not on the nominal amount of its capital, but on its ability to redeem it. This is the only safe criterion. Very special cases may perhaps furnish exceptions, but there is, in general, no security for the credit of paper, but the ability, in those who emit, to redeem it. Whenever bank notes are not convertible into gold and silver, at the will of the holder, they become of less value than gold and silver. All experiments on this subject have come to the same result. It is so clear, and has been so universally admitted, that it would be waste of time to dwell upon it. The depreciation may not be sensibly perceived the first day, or the first week, it takes place. It will first be discerned in what is called the rise of specie; it will next be seen in the increased price of all commodities. The circulating medium of a commercial community, must be that which is also the circulating medium of other commercial communities, or must be capable of being converted into that medium, without loss. It must be able, not only to pass in payments and receipts, among individuals of the same society and nation, but to adjust and discharge the balance of exchanges between different nations. It must be something, which has a value abroad, as well as at home, and by which foreign as well as domestic debts can be satisfied. The precious metals alone answer these purposes. They alone, therefore, are money, and whatever else is to perform the offices of money, must be their representative, and capable of being turned into them at will. So long as bank paper retains this quality, it is a substitute for money; divested of this, nothing can give it that character. No solidity of funds, no sufficiency of assets, no confidence in the solvency of banking institutions has ever enabled them to keep up their paper to the value of gold and silver, any longer than they paid gold and

silver for it, on demand. This will continue to be the case so long as those metals shall continue to be the standard of value and the general circulating medium among nations.

A striking illustration of this common principle is found in the early history of the bank of England. In the year 1697, it had been so liberal of its loans, that it was compelled to suspend the payment of its notes. Its paper immediately fell to a discount of near twenty per cent. Yet such was the public opinion of the solidity of its funds, that its stock then sold for one hundred and ten per cent. although no more than sixty per cent. upon the subscription had been paid in.

The same fate, as is well known, attended the banks of Scotland, when they adopted the practice of inserting in their notes a clause, giving the banks an option of paying their notes on demand, or six months after demand, with interest. Paper of this sort was not convertible into specie, at the pleasure of the holder; and no conviction of the ability of the bank which issued it, could preserve it from depreciation.

The suspension of specie payments by the bank of England, 1797, and the consequences which followed, afford no argument to overthrow this general experience. If bank of England notes were not immediately depreciated, on that occasion, depreciation, nevertheless, did ensue. Very favorable causes existed to prevent their sudden depression. It was an old and rich institution. It was known to be under the most discreet and independent management. Government had no control over it, to force it to make loans, against its interest or its will. On the contrary, it compelled the government to pay, though with much inconvenience to itself, a very considerable sum, which was due to it. The country enjoyed, at that time, an extensive commerce, and a revenue of three hundred millions of dollars was collected and distributed through the bank. Under all these advantages, however, the difference of price between bank notes and coin became at one time so great, as to threaten the most dangerous consequences.

Suppose the condition of England to have been reversed. Suppose that instead of a prosperous and increasing commerce, she had suffered the ruin of her trade, and that the product of her manufactures had lain upon her hands, as the product of our agriculture now perishes in ours. Does any one imagine that her circulating paper could have existed and maintained any credit, in such a change of her condition? What ought to surprise us is not that her bank paper was depreciated, but that it was not depreciated sooner and lower than in fact it was. The reason can only be found in that extraordinary combination of favorable circumstances, which never existed before, and is hardly to be expected again. Much less is it to be discovered in our condition at present.

But we have experience nearer home. The paper of all the banks south of New England, has become depreciated to an alarming extent. This cannot be denied. All that is said of the existence of this depreciation remote from the banks, is unfounded and idle. It exists everywhere. The rates of exchange, both foreign and domestic, puts this point beyond controversy. If a bill of exchango

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