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JANUARY, 1811.

Bank of the United States.

H. OF R.

existed in the United States, with a capital of two can be employed by that Government, unless million one hundred thousand dollars. The cre- such means be found expressly pointed out in the ation of a bank, with a capital of ten millions of Constitution. And, sir, to show how truth may dollars, almost five times the capital of all the be obscured, and error supported, by ingenuity, existing banks of the Union, under the patronage my respect for the gentleman from New York of the General Government, was calculated to forbids my saying by sophistry, I will append, as produce and did produce a subserviency on the a commentary, the speech of that gentleman on part of the stockholders to the views of their this question. party. The influence of this powerful moneyed With respect to the Constitutional right of capital was long fest. Nothing but the multipli- Congress to incorporate a bank for the prosperous cation of State banks, and the increase of capital administration of its finances, the very able argufrom the peculiar and fortunate circumstances ments already made, and in my apprehension under which the United States were placed, could very im persecily met, require liute to be said in have emancipated us from the shackles imposed its support. My view of inis part of the subject on us by a mopeyed institution wielded by for- shall, therefore, be brief, and I may be pardoned eigoers. I rejoice that the period has arrived, for offering it. To incorporate a company, in when this privileged class must surrender its char: other words to grant to ceriain persons a legal or ter-- when the moneyed capital of our country artificial capacity, distinct from their natural, shall no longer be wielded as an engine of party is an act of sovereignty, a delegation of which it -when the Republican party shall have an op- is true can only emanate from the sovereign portunity of testing the iruth of the principles power. If the Federal Government be pot sovfor which they contended in the year 1790, and ereign as to any of its objects, they cannot inof giving on the present, as on the former occa- corporate a company for the attainment of any sion, their suppori io the principle, “That power of its objects. But, if, on the other hand, the not delegated is reserved to the Siates or to the Government is sovereign as to any object, the people.”

power to incorporate companies, as the fil and Mr. STANLEY:-Mr. Speaker: After the able necessary means for the attainment of that object, discussion which this subject has already under- must regularly result from and be appurtenant to gone, I should not have asked your attention, but this sovereignty. This power is not left to infor the observations of the gentleman from Vir- ference; the Constitution expressly declares that ginia, (Mr. Eppes,) who has last addressed you. Congress shall have power to make all laws neThat gentleman, with a view to justify such a cessary and proper to carry into effect the powers decision of the question as he desires, bas advanc. delegated, and that such laws shall be ihe sued propositions which are in themselves so incor- preme law of the land. rect, and supported them by arguments so palpa- The Constitution, it is true, does not, in terms, bly unreasonable, that I shall trouble the House a give the power to incorporate a bank-ihat inshort time in reply.

strument details only the objects of the GovernThe gentleman tells us it is as true as any ment, and delegates certain general authorities to mathematical axiom, that a power not expressly effectuate the ends for which it was formed. In granted by the Constitution io the Federal Gov- every case it is silent as to the particular means ernment cannot be exercised by that Government; 10 be employed or the mode to be observed in the that whenever a political Euclid shall be compos- altainment of the object or end. Instead of ated, this principle should be placed as first in clear- tempting to specify in any case the means of ness and importance; and the speech of the executing a power, it is silent in that particular gentleman from New York, (Mr. Porter) on in every case, granting to Congress the general the bill before us, should be added as an appendix power, I have just stated, to make all.laws neor commentary proving its truth. In terms, sir, cessary and proper to carry into effect the delethe gentleman's proposition is true, but the gen-galed powers. Among the general powers ex. tleman has not avoided ihe error of those who pressly granted, is this—" To lay and collect have preceded him on that side of the question; iaxes, to borrow money, to pay ihe debts and he confounds the powers of the Federal Govern- provide for the general welfare of the Union." ment with the means of executing such powers; What wisdom first suggested, the experience of he does not uistinguish between the objects of the twenty years has confirmed, that a bank is not Federal compact and the means of effecting these only a fit but the most useful means of collecting objects. And upon this hinge of error did the the revenue of the United States. It has been argument of the gentleman from New York turn. found the readiest and most certain resource from This confusion of terms, this indistinctness of which to obtain and on which'io rely for loans perception, as I shall endeavor to show, has led to Government; and through its aid, moneys for gentlemen astray on this question. Il, sir, the public necessities have been safely, speedily, and political errors of the statesmen of this day shall without charge placed at the command of Govever be collected into a volume, as the first, the ernment in every part of the Union. The agency most glaringly wrong, and flagranily unjust, of this institution, thus continually employed, should be placed the axiom of the gentleman places its utility and expediency beyond question. from Virginia, which cannot, in substance, be íconsider it, therefore, as “proper,” because it is other than this: " That no means of executing well adapted to its object; as “necessary,” bea power granted to the Federal Government, I cause if not the only, it is certainly the best

H OF. R.

Bank of the United States.

JANUARY, 1811.

means that can be devised to obtain its ends; and in the Constitution; the authority results from the being both “necessary and proper" to carry into powers granted, and are necessarily implied as effect the power expressly granted to Congress, the fit and necessary means of executing the "to collect taxes, to borrow money and pay the powers which are expressly granted. Yes, sir, debis”-it must be Constitutional.

wbether I am answered or not, the fact is maniBut, sir, the gentleman from New York says, test

, that the implied powers of the Goveroment the United States are not sovereign, and cannot are not only fairly deducible from the spirit and exercise a right of sovereignty, because they de letter of the Constitution, but are essential to the pend on the will of the States for existence; for, most familiar operations of Congress. And, sir, said he, should the States neglect or refuse to it is in proof that gentlemen are in the daily habit elect Senators or to make the laws necessary for of exercising, without scruple or reserve, those electing representatives, the Federal Goveroment implied powers, which, when urged in support of would die of its own imbecility. This may be the bank, they turn from with affected abhortrue: the Government may cease to exist, yet, rence, as if a single glance, like a look at Mewhile it does exist, there are powers which it dusa's head, would turn them into stone! They alone can exercise without the control or inter- have repeatedly acted under them, still grasp ference of any other authority. . To these pur- them with the love of power and the 'ardor of am. poses, assuredly, then it must be supreme, or bition, and will only suit their bold to that force sovereigo. For example, the Federal Govern- which shall deprive them of the reins of empire. ment has power to lay and collect laxes and to The gentleman from Virginia deprecates a regulate commerce. Ís there any power in this bank which shall be connected with the Governcountry-1 speak of moral, pot physical power- ment; he calls this a dangerous union of the which can prevent themn laying such taxes and sword and the purse, reminds us of the abuse by making such regulations of commerce as they the British Goveroment of the Baok of England think til? The Constitution of the United States in obtaining loans, and of the public debt of that is the act, of “We, the people of the United Kingdom. None of those objections apply to the States.” So are the State constitutions—both Bank of the Uoited States. The charier of the are derived from the same source-each is inde- present bank places the institution beyond the pendent of the other, and only dependent on the control of the Goveroment. It is bound to acsovereign will of the people, constitutionally ex- commodate the Government with loans to a pressed. The States have certain powers er- limited amount when required; but this obligaclusively confided to them; they may prescribe tion on the back, although ils performance may the descents of estates, and regulate distribution at times chance to be unfavorable to the instituof property and other objects of internal police; tion, is yet connected with no danger to the they are sovereigo as to these objects; the Fed country, since the one cannot lend, until we, the eral Government is as much so as to the objects representatives of the people have authorized the within the sphere of its jurisdiction. Yet, Mr. other to borrow, The Executive of the United Speaker, obvious, indeed indispensable as is the States is said to bear the sword, but, sir, Congress inference and deduction of the right to incorpor- holds the purse, and it has not been explained to us ate a bank for the management of the financial how the existence of a bank is to render one subconcerns of the United States, from these premi- servient to the other, or to convey the sword and ses, gentlemen say it is only an implied power, purse into the same hand. I can, however, coothat no power can be used unless expressly ceive a plan of a bank which would sharpen the granted in the Constitution, and the exercise of sword of the Executive and give a power to his implied powers is deprecated as unknown to the arm that might be used to the ruin or degradaConstitution, and abhorrent to Republicanism, tion of our citizens. Adopt the plan which bas and dangerous to our liberties. Let me ask gen- been recommended, and which is to rise upon the tlemen, and I pray they will inform me, wheiher ruins of the present institution ; erect one great they do not daily act upon implied powers? If bank whose branches shall embrace all the States not, let them speak, in what part of the Constitu- and whose capital shall swallow all the State tion do they and power to build light-houses ? banks, give to ihe Administration the enormous Where is the power which their President, patronage of the appointment of directors to this doubtless with the feelings of a man and the institution, and place the credit and business of firmness of a magistrate, so freely exercises of re- every man connected of necessity with baoks at moving at pleasure from office men who were the mercy or pleasure of an Executive or his appointed with the consent of the Senate ? You minions,-the commercial and the enterprising have committees now sitting, who, under your must decide either to become flatterers and be authority, but without law, com pel citizens to at- favored, or to retain their independeoce and be lend at their summons, without consulting their ruined.' It is this systein which would give a will or convenience; you have conferred on cer- dangerous, a detestable power. Your Adminis. tain individuals the sole privilege of trading with tration, styling themselves Republican, have prothe Indian tribes-by what authority are all fessed to desire no patronage: I will take them these, and many other acts which have been at their word; my vote shall never increase their mentioned in this debate, exercised? If I am patronage, to multiply their dependants. The answered at all, truth will dictate this reply: the Crown, which they profess to put away, I will power to do these acts is no where expressly granted loot force upon their brow.

JANUARY, 1811.

Bank of the United States.

H. OF R.

As to the Bank of England and the British result of fair banking--such has been the opera, debt, I perceive not the bearing their connexion tions of the Bank of the United States, of whose can have on the subject before us. That the capital, debts, and issues, the Government has British Government have made too free use of been weekly informed. It is from the State banks the ability of the bank to lend, cannot expose us that danger is to be apprehended. Of their capito like mischiels, because our bank cannot lend, tal, (I mean not their nominal, but their specie por our Administration borrow, but by the express capital,) of their debts, and their resources, we authority of Congress. Of the British debt, I are, and must remain entirely ignorant; and we know its amount is enormous." Yet, sir, how, and bave seen that some of these institutions, dishonfor what purpose, has that debt been ihus swollen ? estly emitting paper beyond the sum authorized Perhaps ihe people of Great Britain owe to that by their capital, and beyond the necessities of the debt, the preservation and enjoyment of rights country, their notes bave returned upon them, dearer to freementban their purse. It is, sir, at they have been unprepared to pay, their paper the cost of that debt that Great Britain maintains has depreciated, and individuals have been deher existence and independence as a nation. She frauded to a vast amount. And such, again, may nright have submitted without an effort, without be the case if we remove the check, the restrainexpense, and, free from debt. have sunk under the ing influence, which the large and solid capital of chaios which the tyrant of France, the enemy of the Bank of the United States, and its prudent the human race, has fastened upon all the king direction, has enabled it to exercise over the State doms of continental Europe. Rather than see banks-these “mushroons," as the gentleman has my country bow in subjection to that direst of called them, which, like Jonah's gourd, have despotisms against which Great Britain bas strug- sprung up in one night and withered in the next. gled, I would, in the spirit of an American, cheer The gentleman informs us that our exports of fully bear my share of a debt as large as that doméstic products amount oply to forty-five ruilwhich has been the subject of remark.

lions of dollars; that the capital of the different The gentlemen tell us we have sufficient bank banks in the United States, at the rate of issues capital without that of the Bank of the United by the United States' Bank, may emit ninety States; that the capital of the State banks is millions of dollars, and he infers that a paper equal to the wants of the United States, and that, medium beyond the amount of domestic exports if this jostitution is continued, there will be an cannot be necessary. This opinion, sir, needs an excess of paper, and the consequent mischiefs to elucidation, which the gentleman did not give it. the country. Sir, gentlemen need not feel alarm Why the amount of produce purchased for exon this point. There is no more danger of a sur portation should form ihe measure of circulating plus of capital being employed ip banks, than of medium is, to say the least, pot self-evident. such surplus being employed in any other busi- Nor can I conceive why, in calculating the meness. The thing regulates itself. Bank notes dium necessary or useful for the concerns of the may be emitted beyond the use of the country, country, we should exclude from view the purbut you can no more force them into circulation chases for internal use as well as for external beyond this necessity; than you can force pur sale, or lose sight of the repeated use made of the chases and sales of tobacco and four beyond the same note or piece of metal in its continued circonsumption of a country. The commerce of culation. The circulating medium of a country, every couotry requires a certain sum of circu, whether paper or specie, represents, because it laring medium. The amount must be ascertained commands, the articles we need and get in exby experience, which alone can show how much change for it. What the sum should be, my po. it will absorb and employ. If you emit. paper litical arithmetic does not teach me, por does ihe beyond this amount it will, of necessity, return rule of the gentleman from Virginia. In my upoa the banks. This discovery is not modern. opinion, experience alone can show it; as I have li is as old as the science of banking And of before said, viz: that amount which the commerthe errors of a bank, no one is more unfavorable cial, agricultural, and manufacturing concerns of to them than the issues of paper beyond the neces- the country will require and can employ; to be sity of the country; for, so long as they keep ascertained from the amount of silver and gold within proper limits

, it is found that they may fin circulation, bank credit, and bank potes issued emit one dollar and iwo-thirds, or two dollars of and pot returning upon the banks. It is, I admit, pa per, for each dollar of specie in their vaults; a fact, a proud fact, that the exports of our counbut when their issues of paper exceed these lim- try have increased from eighteen to forty-five its, the excess' continually returns, and instead of millions. New fields have been opened, produce one dollar io specie meeting two of paper, a dol- increased, means of conveyance multiplied, and lar in specie is required to redeem each dollar of new markets sought and resorted 10. Agriculture, the surplus emission of notes. With this restraiat commerce, and manufactures, have advanced, as upon their issues, banks are kept in due check; they necessarily must, hand in hand; and to the and, sir, when the prudent and safe issues-viz: beneficial influence of banks, increasing the capito the amount required by the country- do not tal, encouraging enterprise, stimulating and reyield employment for the capital, the business warding the interest of the country, we are inceases to be profitable, the capital is directed to debted for much of this increase. other objects, and the banking fund is kept at its The testinony which the gentleman has borne just level. This, sir, is the necessary and just to the correct management of the Bank of the

11th Con. 3d Sess.-26

H. of R.

Bank of the United States.

JANUARY, 1811.

United States, was to have been expected from Such, sir, is the state of the account on the side his information and liberality. The fact previo of the bank. ously stated, and repeated by him as a defect in How stands the account with the debtors of arrangement, that the notes of the bank and its the bank, or rather with the public? branches are not paid but at the office from which the bank can demand the debts due it $18,672,826 66 they issue, and ai which they are made payable, Admit the demands opon it are apis not a ground of complaint. The bank and its plied as sets-off to their full amount 13,673,368 83 branches have each but a small portion of the capital. · Of the branches, the largest portion, The balance still to‘bě raised by the (only $1,800,000,) is in New York, and it is ab. country is

4,999,457 83 surd to suppose that either the branch with this within a trifle of five millions of dollars. capital

, or the others with less, should redeem, at Whence is this sum to come? Not from the all times, the notes emitted upon a capital of ten vaults of the other banks; they do not possess it, millions. The thing is impossible.

It'is stated in the able speech of the representaFrom the opinion advanced by the gentleman, tive of the city of Philadelphia, in the Legislathat the state of the bank should raiher excite ture of Pennsylvania, upon the resolution respectthe fears of the institution for its own safety or ing the bank, that the report of the state of all solvency, than awaken the apprehensions of the the banks of that State, recently made to the community for the effects of dissolution upon Legislature, show's that all the banks in Philathem, I beg leave to dissent. We have bad, in delphia (excepting that of the United States) debate, various statements of the affairs of the bave together but a little more than one million bank, drawn either from former reports or conjece of dollars in specie: those who have the best ture. The repori of the Secretary of the Treas- means of information, declare ihe specie in the ury, this day laid on our tables, shows the pres- banks of New York is not greater, and in those ent state of the bank. To this' I shall refer for of other cities unquestionably less. The State facts.

banks then have not the money, and cannot proThere is due to the bank from individuals upon notes duce it. Will the notes of these banks pay the discounted

- $14,578,294 25 debt ? No, sir, because their notes will be reOther banks owe them for notes and

turned upon them for payment, which they canin account

1,287,485 92 not make. These banks know their own streogth The Government owe, including the

or weakness, and that they dread this crisis, is late loan, funded debt and Treasury

manifest from the course they have already drafts

2,807,046 49 adopted; they have curtailed discounts and com

menced calling in their debts. The consequences 18,672,826 66

you learn from the moans of your correspondents, They have in gold and silver

5,009,567 10 and from the petitions which daily press your And in real estate

500,652 77 table. The want of money has produced a want of

punctuality; confidence is destroyed; the life, the Making a property to face the demands on them

apimating spark of business is, as it were, sus24,183,046 53

pended, and deep distress is fast spreading over

ihe commercial world. Sir, my deductions are On the other hand what do they owe?

supported by facts. They prove the solvency, To the holders of their notes in circu.

indeed the strengih of the Bank of the United lation

$5,037,125 22 States, is such as to merit the confidence of the To the Government for deposites 1,929,999 60 people, which it enjoys; while the situation of To other banks due in account

634,348 01 the Siate banks, and the deficiency of the preTo individuals for deposites

5,900,422 83 cious metals, gives a fatal assurance of the io. To balances on outstanding drafts 171,473 17 ability of the country to submit, without great Making the total amount of their debts 13,673,368 83 it the large debt due the bank.

distress, to the operation of having extracted from

The gentleman from Virginia says it is no arThus, sir, with a property of twenty-four mil-gument in favor of à continuance of the bank; lions of dollars, leaving the stockholders the orig- that it is necessary for the management of the inal stock of ten millions, and a surplus of more financial concerns of the United States, for that than half a million to meet bad debts. But were the word "finance" is not to be found in ihe Cooit otherwise-were it possible that, of the debts stitution. Sir, were I called upon by one of the due them, ten millions should never be collected, yeomaory of this country--one whose days had the loss would affect the stockholders, whose orig- been spent at the plough, remote from Courts, and inal advance would be lost, but the interest of without concern in affairs of State, to define to the community would not even then be affected him what were the financial concerns of the at least not as creditors of the institution; because United States, I should, as an explanation adapted even if ten millions, the capital stock, were by to the simplest understanding, inform bim ibat any means sunk, the bank would still be solvent, the laying and collecting taxes, borrowing money, it would even then pay its debts, and, conse- and paying the debts of ihe Union, were its finanquently, must be perfectly safe as regards the cial concerns. And as these powers are expressly community.

granted to Congress, although the word "finances

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JANUARY, 1811.

Bank of the United States.

H. of R.

may not be found in the Constitution, Congress tled in that country, and has resided there and at are thus required of necessity to provide for the New Orleans ever since; he is declared to be a management of the "financial concerns of the man of high character for integrity and honor. United States."

Mr. Clarke has had a seat as a delegate on this Permit me now, sir, to notice objections urged floor; though not a native of the United States, against the bank from other quarters, and of a he is as much a citizen as any of the inbabitants different nature-objections not calculated, prob- of Louisiana, made so by treaty, and as much so ably not intended, to influence this House, but as will be the Representatives of the State of Ore which may have an influence abroad. Genile- leans," that is to be," in the next Congress. men bave objected to what they term the foreign Against his character nothing has been alleged influence in our affairs from a portion of the other than that imputation which the people of stock of this bank being held by foreigners; and, the United States have fixed upon the character the gentleman from Maryland (Mr. WRIGHT) of every man who has been the friend or assohas alleged that aliens, traitors, and old tories, aré ciate of Wilkinson and Burr. Let me not be unjo trusted with its direction ; others with him derstood as committiog myself to the opinion of have said that the 'bank and the funding system the guilt of these gentlemen. I was not of Burr's are twins of the same progenitor, (Alexander jury-he may be guilty; nor am I of Wilkinson's Hamilton,) and that the question of creating this committee he may be innocent; yet suspicion bank was the ground on which the parties of the deeply stains his character; it will take muchi Upited States first divided.

of the labor of the file to rub it off. · The charter of the bank did not exclude for. But, sir, let it be supposed that an individual eigners from purchasing shares

, because, at the who was unfriendly to our Revolution should have period of its establishment, our country was with been chosen by those who are proprietors of the out capital, and it was an object rather to invite bank to a seat in its direction. Would the choice foreign capital to the United States than to repell be either new or criminal? Sir, a person whose it; their large funds and low rates of interest name is recorded in the proscription statute of a have enabled them to give more in the market State as an old tory," was appointed by Mr. than our citizens could afford to pay, and they Jefferson a district judge of the United States. have consequently purchased. But, if it be a sin In other States, but particularly in New York to have sold stock to foreigners, lay it at the right and Peonsylvania, persoos who bore arms against door; and when you revile the measure, do not us and adhered to our enemy in the Revolutionforget it was one of Mr. Jefferson's Administra- ary war have also been appointed by Republican tion, who sold 10 English merchants, in the year Presidents to offices of high trust. Why were 1801, all the stock in the bank which the United these “old tories" ibus honored and trusted ? BeStates owned.

cause they possessed integrity and ability to qualThe charter denies to any stockholder, not a ify them for their stations. And, why might not resident of the United States, the right either of a tory be chosen a director of a bank, if his virà vote in the choice of directors, or a seat at the tues and talents had gained him the confidence board of directors. And thus divested of any of the stockholders? The choice seems to me to power to interfere in the concerns of the bank, it be as pardonable in a stockholder as in a Presirequires more than human penetration 10 dis- dentor is it, sir, that the Republican President cover, or more than ordinary jealousy to suspect, has been converted into a political Pope, and has how foreigners can influence even the affairs of alone the power to pardon and absolve from polithe bank, much less, through its agency, the con- tical sins ? cerns of the country.

Of the origin of the Bank of the United States, This cry of foreign influence from the use of the honor is certainly due to the first Secretary foreiga capital is a modera bugbear. During our of the Treasury. In justice to his memory, the Revolutionary struggle, our soldiers were clothed fact ought frequently to be mentioned and never and armed with funds borrowed in Europe; our to be forgotten. But, sir, the merit of obtainiog nerves were hardened, our sinews stiffened, and the adoption of the plan is not entirely his. The our independence achieved with the assistance of original bill in every stage received ihe support foreign capital. Yet the heroes and sages of that of gentlemen of the Republican party; among day suspected not any improper foreign influence; those, who were its earliest supporters, one most they were brave and wise, but not as cunning as distinguished for ability, the present Secretary of our present statesmen who have made the dis- the Treasury, continues it advocate to the present covery,

hour. As to the aliens, traitors, and old tories, who In support of the claim of the bank for a reare concerned in the direction of the bank, the newal of its charter, and to the credit of Mr. Galgentleman is too general in his charge. So far latin, I will here read extracts from his report to as he will be particular, he can be met. He the Senate, of March, 1809 : named but two persons as meriting his denun- « The advantages derived by Government from the ciation: Evan Jones and Daniel Clarke, of New bank are nearly of the same nature with those obtained Orleans. 1, sir, know. not personally either of by individuals who transact business with similar instithese gentlemen.. Mr. Jones I understand to be tutions, and may be reduced to the following heads: a native of Pennsylvania, who, at the peace of “ 1. Safe keeping of public moneys. This applies 1763, when Great Britain acquired Florida, set- not only to money in the Treasury, but that in the

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