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IN THE SENATE OF THE UNITED STATES, ON THE BILL FOR
RENEWING THE CHARTER OF THE BANK OF THE UNITED STATES, MAY 25, 1832.
MR. WEBSTER said, that, though he was entirely satisfied with the general view taken by the chairman of the committee (Mr. Dallas), and with his explanation of the details of the bill, yet there were a few topics, upon which he desired to offer some remarks; and if no other gentleman wished, at present, to address the Senate, he would avail himself of this opportunity.
A considerable portion of the active part of life has elapsed, said Mr. W., since you and I, Mr. President, and three or four other gentlemen, now in the Senate, acted our respective parts in the passage of the bill creating the present Bank of the United States. We have lived to little purpose, as public men, if the experience of this period has not enlightened our judgments, and enabled us to revise our opinions; and to correct any errors into which we may have fallen, if such errors there were, either in regard to the general utility of a National Bank, or the details of its constitution. I trust it will not be unbecoming the occasion, if I allude to your own important agency in that transaction. The bill incorporating the Bank, and giving it a constitution, proceeded from a Committee in the House of Representatives of which you were Chairman, and was conducted through that House under your distinguished lead. Having recently looked back to the proceedings of that day, I must be permitted to say, that I have perused the speech by which the subject was introduced to the consideration of the House, with a revival of the feeling of approbation and pleasure with which I heard it; and I will add, that it would not, perhaps, now be easy to find a better brief synopsis of those principles of currency and of banking, which, since they spring from the nature of money and of commerce, must be essentially the same, at all times, in all commercial communities, than that speech contains. The other gentlemen now with us in the Senate, all of them, I believe, concurred with the Chairman of the Committee, and voted for the bill. My own vote was against it. This is a matter of lit
lars each, as in the first Bank; and it had established such a scale of voting by the stockholders, as showed it to be quite practicable for a minority in interest to control all elections, and to seize on the entire direction of the Bank. It was on this very ground, it was under the apprehension of this very evil, that the last attempt to amend the bill, made by me, proceeded. That attempt was, a motion to diminish the number of shares by raising the amount of each from one hundred dollars to four hundred.
There was yet one other provision of the bill, which was regarded as unnecessary and objectionable. That was, the power reserved to the Government of appointing five of the directors. We had no experience of our own of the effect of such Government interference in the direction of the Bank; and in other countries it had been found that such connection between Government and Banking institutions, produced nothing but evil. The credit of Banks has generally been very much in proportion to their independence of Government control. While acting on true commercial principles, they are useful both to Government and people; but the history of the principal moneyed institutions of Europe has demonstrated, that their efficiency and stability consist very much in their freedom from all subjection to State interests and State necessities. The real safety to the public lies in the restraints and liabilities imposed by law, and in the interest which the proprietors themselves have in a judicious management of the affairs of the corporation. I will only say, on this part of the subject, that it is unquestionably true, that the successful career of this institution then commenced, when its stock, leaving the hands of speculation, came to be owned, for the common purposes of investment, by such as desired to make investments, and when the proprietors exercised their proper discretion in constituting their part of the direction, with a single view of giving to the Bank a safe and competent administration.
The question now is, Sir, whether this institution shall be continued. We ought to treat it as a great public subject; to consider it, like statesmen, as it regards the great interests of the country, and with as little mixture as possible of all minor motives.
The influence of the Bank, Mr. President, on the interests of the Government, and the interests of the people, may be considered in several points of view. It may be regarded as it affects the currency of the country; as it affects the collection and disbursement of the public revenue; as it respects foreign exchanges; as it respects domestic exchanges; and as it affects, either generally or locally, the agriculture, commerce, and manufactures of the Union.
First, as to the currency of the country. This is, at all times, a most important political object. A sound currency is an essential
and indispensable security for the fruits of industry and honest enterprise. Every man of property or industry, every man who desires to preserve what he honestly possesses, or to obtain what he can honestly earn, has a direct interest in maintaining a safe circulating medium; such a medium as shall be a real and substantial representative of property, not liable to vibrate with opinions, not subject to be blown up or blown down by the breath of speculation, but made stable and secure by its immediate relation to that which the whole world regards as of a permanent value. A disordered currency is one of the greatest of political evils. It undermines the virtues necessary for the support of the social system, and encourages propensities destructive of its happiness. It wars against industry, frugality and economy; and it fosters the evil spirits of extravagance and speculation. Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them with paper money. This is the most effectual of inventions to fertilize the rich man's field by the sweat of the poor man's brow. Ordinary tyranny, oppression, excessive taxation, these bear lightly on the happiness of the mass of the community, compared with fraudulent currencies, and the robberies committed by depreciated paper. Our own history has recorded for our instruction enough, and more than enough, of the demoralizing tendency, the injustice, and the intolerable oppression, on the virtuous and well disposed, of a degraded paper currency, authorized by law, or in any way countenanced by Government.
We all know, Sir, that the establishment of a sound and uniform currency was one of the great ends contemplated in the adoption of the present Constitution. If we could now fully explore all the motives of those who framed, and those who supported that Constitution, perhaps we should hardly find a more powerful one than this. The object, indeed, is sufficiently prominent on the face of the Constitution itself. It cannot well be questioned, that it was intended by that Constitution to submit the whole subject of the currency of the country, all that regards the actual medium of payment and exchange, whatever that should be, to the control and legislation of Congress. Congress can alone coin money; Congress can alone fix the value of foreign coins. No State can coin inoney; no State can fix the value of foreign coins; no State (nor even Congress itself) can make any thing a tender but gold and silver, in the payment of debts; no State can emit bills of credit. The exclusive power of regulating the metallic currency of the country would seem necessarily to imply, or, more properly, to include, as part of itself, a power to decide how far that currency should be exclusive, how far any substitute should interfere with it, and what that substitute should be. The generality and extent of the power granted to Congress, and the clear and well-defined prohibitions VOL. II.
on the States, leave little doubt of an intent to rescue the whole subject of currency from the hands of local legislation, and to confer it on the General Government. But, notwithstanding this apparent purpose in the Constitution, the truth is, that the currency of the country is now, to a very great extent, practically and effectually under the control of the several State Governments; if it be not more correct to say, that it is under the control of the Banking institutions, created by the States; for the States seem first to have taken possession of the power, and then to have delegated it.
Whether the States can Constitutionally exercise this power, or delegate it to others, is a question which I do not intend, at present, either to concede or to argue. It is much to be hoped, that no controversy on the point may ever become necessary. But it is matter highly deserving of consideration, that, although clothed by the Constitution with exclusive power over the metallic currency, Congress, unless through the agency of a Bank established by its authority, has no control whatever over that which, in the character of a mere representative of the metallic currency, fills up almost all the channels of pecuniary circulation.
In the absence of a Bank of the United States, the State Banks become effectually the regulators of the public currency. Their numbers, their capital, and the interests connected with them, give them, in that state of things, a power which nothing is competent to control. We saw, therefore, when the late war broke out, and when there was no National Bank in being, that the State institutions, of their own authority, and by an understanding among themselves, under the gentle phrase of suspending specie payments, every where south of New England, refused payment of their notes, and thus filled the whole country with irredeemable and degraded paper. They were not called to answer for this violation of their charters, as far as I remember, in any one State. They pleaded the urgency of the occasion, and the public distresses; and in this apology the State Governments acquiesced. Congress, at the same time, found itself in an awkward predicament. It held the whole power over coins. No State, or State institution, could give circulation to an ounce of gold or of silver, not sanctioned by Congress. Yet all the States, and a hundred State institutions, claimed and exercised the right of driving coin out of circulation by the introduction of their own paper; and then of depreciating and degrading that paper, by refusing to redeem it. As they were not institutions created by this Government, they were not answerable to it. Congress could not call them to account, and, if it could, Congress had no Bank of its own, whose circulation could supply the wants of the community. Coin, the substantial constituent, was, and was admitted to be, subject only to the control of Congress; but paper, assuming to be a representative of this constituent,