heard to express in common conversation. He said: other; and Mr. Calhoun, who had long acted with the opposition, now came back to the support of the democracy, and gave the aid without "In supporting the bank of 1816, I openly which these great measures of the session could declared that, as a question de novo, I would not have been carried. His temperament re- be decidedly against the bank, and would be the quired him to have a lead; and it was readily last to give it my support. I also stated that, yielded to him in the debate in all cases where in supporting the bank then, I yielded to the necessity of the case, growing out of the then exhe went with the recommendations of the mes-isting and long-established connection between sage; and hence he appeared, in the debate on these measures, as the principal antagonist of Mr. Webster and Mr. Rives. The present attitude of Mr. Calhoun gave rise to some taunts in relation to his former support of a national bank, and on his present political associations, which gave him the opportunity to set himself right in relation to that institution and his support of it in 1816 and 1834. In this vein Mr. Rives said: man's cause. "It does seem to me, Mr. President, that this perpetual and gratuitous introduction of the Bank of the United States into this debate, with which it has no connection, as if to alarm the imaginations of grave senators, is but a poor evidence of the intrinsic strength of the gentleMuch has been said of argument ad captandum in the course of this discussion. I have heard none that can compare with this solemn stalking of the ghost of the Bank of the United States through this hall, to 'frighten senators from their propriety.' 'I am as much opposed to that institution as the gentleman or any one else is, or can be. I think I may say I have given some proofs of it. The gentleman himself acquits me of any design to favor the interest of that institution, while he says such is the necessary consequence of my proposition. The suggestion is advanced for effect, and then retracted in form. Whatever be the new-born zeal of the senator from South Carolina against the Bank of the United States, I flatter myself that I stand in a position that places me, at least, as much above suspicion of an undue leaning in favor of that institution as the honorable gentleman. If I mistake not, it was the senator from South Carolina who introduced and supported the bill for the charter of the United States Bank in 1816; it was he, also, who brought in a bill in 1834, to extend the charter of that institution for a term of twelve years; and none were more conspicuous than he in the well-remembered scenes of that day, in urging the restoration of the government deposits to this same institution." The reply of Mr. Calhoun to those taunts, which impeached his consistency-a point at which he was always sensitive-was quiet and ready, and the same that he had often been the government and the banking system. I took the ground, even at that early period, that so long as the connection existed, so long as the government received and paid away bank notes as money, they were bound to regulate their value, and had no alternative but the establishment of a national bank. I found the connecand over which I could have no control. I tion in existence and established before my time, yielded to the necessity, in order to correct the disordered state of the currency, which had fallen exclusively under the control of the States. I yielded to what I could not reverse, just as any member of the Senate now would, who might believe that Louisiana was unconstitutionally admitted into the Union, but who would, nevertheless, feel compelled to vote to extend the laws to that State, as one of its members, on the ground that its admission was an act, whether constitutional or unconstitutional, which he could not reverse. In 1834, I acted in conformity to the same principle, in proposing the renewal of the bank charter for a short period. My object, as expressly avowed, was to use the bank to break the connection between the government and the banking system gradually, in order to avert the catastrophe which has now befallen us, and which I then clearly perceived. But the connection, which I believed to be irreversible in 1816, has now been broken by operation of law. It is now an open question. I feel myself free, for the first time, to choose my course on this important subject; and, in opposing a bank, I act in conformity to principles which I have entertained ever since I have fully investigated the subject.” Going on with his lead in support of the President's recommendations, Mr. Calhoun brought forward the proposition to discontinue the use of bank paper in the receipts and disbursements of the federal government, and supported his motion as a measure as necessary to the welfare of the banks themselves as to the safety of the government. In this sense he said: "We have reached a new era with regard to future by the past, in reference to them, will be these institutions. He who would judge of the wholly mistaken. The year 1833 marks the commencement of this era. That extraordinary man, who had the power of imprinting his own vants. If the government sternly reject, for its uses, the general medium of exchange adopted by the community, is it not thereby isolated from the general wants and business of the country, in relation to this great concern of the currency? Do you not give it a separate, if not hostile, interest, and thus, in effect, produce a divorce between government and people?-a result, of all others, to be most deprecated in a republican system." feelings on the community, then commenced his hostile attacks, which have left such effects behind, that the war then commenced against the banks, I clearly see, will not terminate, unless there be a separation between them and the government,-until one or the other triumphs-till the government becomes the bank, or the bank the government. In resisting their union, I act as the friend of both. I have, as I have said, no unkind feeling toward the banks. I am neither a bank man, nor an anti-bank man. I have had little connection with them. Many Mr. Webster's main argument in favor of the of my best friends, for whom I have the high-re-establishment of the National Bank (which est esteem, have a deep interest in their prosperity, and, as far as friendship or personal atwas the consummation he kept steadily in his tachment extends, my inclination would be eye) was, as a regulator of currency, and of the strongly in their favor. But I stand up here as domestic exchanges. The answer to this was, the representative of no particular interest. I that these arguments, now relied on as the look to the whole, and to the future, as well as the present; and I shall steadily pursue that main ones for the continuance of the institution, course which, under the most enlarged view, I were not even thought of at its commencement believe to be my duty. In 1834 I saw the that no such reasons were hinted at by Genpresent crisis. I in vain raised a warning voice, eral Hamilton and the advocates of the first and endeavored to avert it. I now see, with equal certainty, one far more portentous. If bank-that they were new-fangled, and had not this struggle is to go on-if the banks will in- been brought forward by others until after the sist upon a reunion with the government, against paper system had deranged both currency and the sense of a large and influential portion of exchanges;-and that it was contradictory to the community-and, above all, if they should succeed in effecting it-a reflux flood will inev- look for the cure of the evil in the source of the itably sweep away the whole system. A deep evil. It was denied that the regulation of expopular excitement is never without some rea- changes was a government concern, or that the son, and ought ever to be treated with respect; federal government was created for any such and it is the part of wisdom to look timely into the cause, and correct it before the excitement purpose. The buying and selling of bills of shall become so great as to demolish the object, exchange was a business pursuit-a commercial with all its good and evil, against which it is business, open to any citizen or bank; and the directed." loss or profit was an individual, and not a government concern. It was denied that there Mr. Rives treated the divorce of bank and State as the divorce of the government from was any derangement of currency in the only the people, and said: "Much reliance, Mr. President, has been placed on the popular catch-word of divorcing the government from all connection with banks. Nothing is more delusive and treacherous than catch-words. How often has the revered name of liberty been invoked, in every quarter of the globe, and every age of the world, to disguise and sanctify the most heartless despotisms. Let us beware that, in attempting to divorce the government from all connection with banks, we do not end with divorcing the government from the people. As long as the people shall be satisfied in their transactions with each other, with a sound convertible paper medium, with a due proportion of the precious metals forming the basis of that medium, and mingled in the current of circulation, why should the government reject altogether this currency of the people, in the operations of the public Treasury? If this currency be good enough for the masters, it ought to be so for the ser currency which the constitution recognizedthat of gold and silver. Whoever had this currency to be exchanged-that is, given in exchange at one place for the same in another place-now had the exchange effected on fair terms, and on the just commercial principlethat of paying a difference equal to the freight and insurance of the money: and, on that principle, gold was the best regulator of exchanges; for its small bulk and little weight in proportion to its value, made it easy and cheap of transportation; and brought down the exchange to the minimum cost of such transportation (even when necessary to be made), and to the uniformity of a permanent business. That was the principle of exchange; but, ordinarily, there was no transportation in the case: the exchange dealer in one city had his correspondent in another: a letter often did the business. The Hard money The distress of the country figured largely in the speeches of several members, but without finding much sympathy. That engine of operating upon the government and the people had been over-worked in the panic session of 1833-34, and was now a stale resource, and a crippled machine. The suspension appeared to the country to have been purposely contrived, and wantonly continued. There was now more gold and silver in the country than had ever been seen in it before regulation of the currency required an under- paper)—in which the meanest and weakest is standing of the meaning of the term. As used always the conqueror. The baser currency by the friends of a National Bank, and referred always displaces the better. to its action, the paper currency alone was in- needs support against paper, and that support tended. The phrase had got into vogue since can be given by us, by excluding paper money the paper currency had become predominant, from all federal receipts and payments; and conand that is a currency not recognized by the fining paper money to its own local and inferior constitution, but repudiated by it; and one of orbit: and its regulation can be well accomits main objects was to prevent the future plished by subjecting delinquent banks to the existence of that currency-the evils of which process of bankruptcy, and their small notes to its framers had seen and felt. Gold and silver suppression under a federal stamp duty. was the only currency recognized by that instrument, and its regulation specially and exclusively given to Congress, which had lately discharged its duty in that particular, in regulating the relative value of the two metals. The gold act of 1834 had made that regulation, correcting the error of previous legislation, and had revived the circulation of gold, as an ordinary currency, after a total disappearance of it under an erroneous valuation, for an entire generation. It was in full circulation when the-four times as much as in 1832, when the Bank combined stoppage of the banks again suppressed it. That was the currency-gold and silver, with the regulation of which Congress was not only intrusted, but charged: and this regulation included preservation. It must be saved before it can be regulated; and to save it, it must be brought into the country-and kept in it. The demand of the federal treasury could alone accomplish these objects. The quantity of specie required for the use of that treasury-its large daily receipts and disbursements-all inexorably confined to hard money -would create the demand for the precious metals which would command their presence, and that in sufficient quantity for the wants of the people as well as of the government. For the government does not consume what it collects --does not melt up or hoard its revenue, or export it to foreign countries, but pays it out to the people; and thus becomes the distributor of gold and silver among them. It is the greatest paymaster in the country; and, while it pays in hard money, the people will be sure of a supply. We are taunted with the demand: "Where is the better currency?" We answer: "Suppressed by the conspiracy of the banks!" And this is the third time in the last twenty years in which paper money has suppressed specie, and now suppresses it: for THE suspension of the banks commenced at New this is a game-(the war between gold and | York, and took place on the morning of the 10th of the United States was in its palmy state, and was vaunted to have done so much for the currency. Twenty millions of silver was then its own estimate of the amount of that metal in the United States, and not a particle of gold included in the estimate. Now the estimate of gold and silver was eighty millions; and with this supply of the precious metals, and the determination of all the sound banks to resume as soon as the Bank of the United States could be forced into resumption, or forced into open insolvency, so as to lose control over others, the suspension and embarrassment were obliged to be of brief continuance. Such were the arguments of the friends of hard money. The divorce bill, as amended, passed the Senate, and though not acted upon in the House during this called session, yet received the impetus which soon carried it through, and gives it a right to be placed among the measures of that session. CHAPTER XII. ATTEMPTED RESUMPTION OF SPECIE PAYMENTS. of May: those of Philadelphia, headed by the Bank of the United States, closed their doors two days after, and merely in consequence, as they alleged, of the New York suspension; and the Bank of the United States especially declared its wish and ability to have continued specie payments without reserve, but felt it proper to follow the example which had been set. All this was known to be a fiction at the time; and the events were soon to come, to prove it to be so. As early as the 15th of August ensuing-in less than one hundred days after the suspension-the banks of New York took the initiatory steps towards resuming. A general meeting of the officers of the banks of the city took place, and appointed a committee to correspond with other banks to procure the appointment of delegates to agree upon a time of general resumption. In this meeting it was unanimously resolved: "That the banks of the several States be respectfully invited to appoint delegates to meet on the 27th day of November next, in the city of New York, for the purpose of conferring on the time when specie payments may be resumed with safety; and on the measures necessary to effect that purpose." Three citizens, eminently respectable in themselves, and presidents of the leading institutions-Messrs. Albert Gallatin, George Newbold, and Cornelius W. Lawrence were appointed a committee to correspond with other banks on the subject of the resolution. They did so; and, leaving to each bank the privilege of sending as many delegates as it pleased, they warmly urged the importance of the occasion, and that the banks from each State should be represented in the proposed convention. There was a general concurrence in the invitation; but the convention did not take place. One powerful interest, strong enough to paralyze the movement, refused to come into it. That interest was the Philadelphia banks, headed by the Bank of the United States! So soon were fallacious pretensions exploded when put to the test. And the test in this case was not resumption itself, but only a meeting to confer upon a time when it would suit the general interest to resume. Even to unite in that conference was refused by this arrogant interest, affecting such a superiority over all other banks; and pretending to have been only dragged into their condition by their example. But a reason had to be given for this refusal, and it was-and was worthy of the party; namely, that it was not proper to do any thing in the business until after the adjournment of the extra session of Congress. That answer was a key to the movements in Congress to thwart the government plans, and to coerce a renewal of the United States Bank charter. After the termination of the session it will be seen that another reason for refusal was found. CHAPTER XIII. BANKRUPT ACT AGAINST BANKS. THIS was the stringent measure recommended by the President to cure the evil of bank suspensions. Scattered through all the States of the Union, and only existing as local institutions, the federal government could exercise no direct power over them; and the impossibility of bringing the State legislatures to act in concert, left the institutions to do as they pleased; or rather, left even the insolvent ones to do as they pleased; for these, dominating over the others, and governed by their own necessities, or designs, compelled the solvent banks, through panic or self-defence, to follow their example. Three of these general suspensions had occurred in the last twenty years. The notes of these banks constituting the mass of the circulating medium, put the actual currency into the hands of these institutions; leaving the community helpless; for it was not in the power of individuals to contend with associated corporations It was a reproach to the federal government to be unable to correct this state of things-to see the currency of the constitution driven out of circulation, and out of the country; and substituted by depreciated paper; and the very evil produced which it was a main object of the constitution to prevent. The framers of that instrument were hard-money men. They had seen the evils of paper money, and intended to guard their posterity against what they themselves had suffered. They had done so, as they believed, in the prohibition upon the States to issue bills of credit; and in the prohibition upon the States to make any thing but gold and silver a tender in discharge of debts. The invention of banks, and their power over the community, had nullified this just and wise intention of the constitution; and certainly it would be a reproach to that instrument if it was incapable of protecting itself against such enemies, at such an important point. Thus far it had been found so incapable; but it was a question whether the fault was in the instrument, or in its administrators. There were many who believed it entirely to be the fault of the latter-who believed that the constitution had ample means of protection, within itself, against insolvent, or delinquent banksand that, all that was wanted was a will in the federal legislature to apply the remedy which the evil required. This remedy was the process of bankruptcy, under which a delinquent bank might be instantly stopped in its operationsits circulation called in and paid off, as far as its assets would go-itself closed up, and all power of further mischief immediately terminated. This remedy it was now proposed to apply. President Van Buren recommended it: he was the first President who had had the merit of doing so; and all that was now wanted was a Congress to back him: and that was a great want! one hard to supply. A powerful array, strongly combined, was on the other side, both moneyed and political. All the local banks were against it; and they counted a thousand -their stockholders myriads ;-and many of their owners and debtors were in Congress: the (still so-called) Bank of the United States was against it: and its power and influence were still great: the whole political party opposed to the administration were against it, as well because opposition is always a necessity of the party out of power, as a means of getting in, as because in the actual circumstances of the present state of things opposition was essential to the success of the outside party. Mr. Webster was the first to oppose the measure, and did so, seeming to question the right of Congress to apply the remedy rather than to question the expediency of it. He said: has made a recommendation to Congress which appears to me to be very remarkable, and it is of a measure which he thinks may prove a salutary remedy against a depreciated paper currency. This measure is neither more nor less than a bankrupt law against corporations and other bankers. the constitution authorizes Congress to establish "Now, Mr. President, it is certainly true that uniform rules on the subject of bankruptcies; but it is equally true, and abundantly manifest, that this power was not granted with any reference to currency questions. It is a general power-a power to make uniform rules on the subject. How is it possible that such a power can be fairly exercised by seizing on corporations and bankers, but excluding all the other such laws ordinarily extend to corporations at usual subjects of bankrupt laws! Besides, do all? But suppose they might be so extended, by a bankrupt law enacted for the usual purposes contemplated by such laws; how can a bankers alone? I should like to hear what the law be defended, which embraces them and learned gentleman at the head of the Judiciary Committee, to whom the subject is referred, has to say upon it. How does the President's suggestion conform to his notions of the constitution? The object of bankrupt laws, sir, has no relation to currency. It is simply to distribute the effects of insolvent debtors among their creditors; and I must say, it strikes me that it would be a great perversion of the power conferred on Congress to exercise it upon corporations and bankers, with the leading and primary object of remedying a depreciated paper currency. "And this appears the more extraordinary, inasmuch as the President is of opinion that the general subject of the currency is not within our province. Bankruptcy, in its common and just meaning, is within our province. Currency, says the message, is not. But we have a bankruptcy power in the constitution, and we will use this power, not for bankruptcy, indeed, but for currency. This, I confess, sir, appears to me to be the short statement of the matter. I would not do the message, or its author, any intentional injustice, nor create any apparent, where there was not a real inconsistency; but I declare, in all sincerity, that I cannot reconcile the proposed use of the bankrupt power with those opinions of the message which respect the authority of Congress over the currency of the country.” The right to use this remedy against bank"We have seen the declaration of the President, rupt corporations was of course well considered in which he says that he refrains from suggesting any specific plan for the regulation of the exchan- by the President before he recommended it, and ges of the country, and for relieving mercantile em- also by the Secretary of the Treasury (Mr. barrassments, or for interfering with the ordinary Woodbury), bred to the bar, and since a justice operation of foreign or domestic commerce; and that he does this from a conviction that such of the Supreme Court of the United States, by measures are not within the constitutional pro- whom it had been several times recommended. vince of the general government; and yet he Doubtless the remedy was sanctioned by the |