THE THREE PER CENT. DEBT, AND LOSS IN NOT PAYING IT WHEN THE RATE WAS LOW, AND THE MONEY IN THE BANK OF THE UNITED STATES WITHOUT INTEREST.
There was a part of the revolutionary debt, incurred by the States and assumed by Congress, amounting to thirteen and a quarter millions of dollars, on which an interest of only three per centum was allowed. Of course, the stock of this debt could be but little over fifty cents in the dollar in a country where legal interest was six per centum, and actual interest often more. In 1817, when the Bank of the United States went into operation, the price of that stock was sixty-four per centum—the money was in bank, more than enough to pay it—a gratuitous deposit, bringing no interest—and which was contained in her vaults—her situation soon requiring the aid of the federal government to enable her to keep her doors open. I had submitted a resolve early in my term of service to have this stock purchased at its market value; and for that purpose to enlarge the power of the commissioners of the sinking fund, then limited to a price a little below the current rate: a motion which was resisted and defeated by the friends of the bank. I then moved a resolve that the bank pay interest on the deposits: which was opposed and defeated in like manner. Eventually, and when the rest of the public debt should be paid off, and the payment of these thirteen and a quarter millions would become obligatory under a policy which eschewed all debt—a consummation then rapidly approaching, under General Jackson's administration—it was clear that the treasury would pay one hundred cents on the dollar on what could be then purchased for sixty-odd, losing in the mean time the interest on the money with which it could be paid. It made a case against the bank, which it felt itself bound to answer, and did so through senator Johnson, of Louisiana: who showed that the bank paid the debt which the commissioners of the sinking fund required. This was true; but it was not the point in the case. The point was that the money was kept in deposit to sustain the bank, and the enlargement of the powers of the commissioners resisted to prevent them from purchasing this stock at a low rate, in view of its rise to par: which soon took place; and made palpable the loss to the United States. At the time of the solicited renewal of the charter, this non-payment of the three per cents was brought up as an instance of loss incurred on account of the bank; and gave rise to the defence from Mr. Johnson; to which I replied:
"Mr. Benton had not intended, he said, to say a word in relation to this question, nor should he now rise to speak upon it, but from what had fallen from the senator from New Jersey. That gentleman had gone from the resolution to the bank, and from the bank he had gone to statements respecting his resolutions on alum salt, which were erroneous. Day by day, memorials were poured in upon us by command of the bank, all representing, in the same terms, the necessity of renewing its charter. These memorials, the tone of which, and the time of their presentation, showed their common origin, were daily ordered to be printed. These papers, forming a larger mass than we ever had on our tables before, and all singing, to the same tune, the praises of the bank, were ordered to be printed without hesitation. The report which he had moved to have printed for the benefit of the farmers, was struck at by the senator of New Jersey. In the first place, the senator was in error as to the cost of printing the report. He had stated it to be one thousand nine hundred dollars, whereas it was only one thousand one hundred dollars. A few days ago, two thousand copies of a report of the British House of Commons on the subject of railroads was ordered to be printed. Following the language of that resolution, he had moved the printing of another report of that body, which would interest a thousand of our citizens, where that report would interest one. There was not a farmer in America who would not deem it a treasure. It covered the whole saline kingdom; and those unacquainted with its nature had no more idea of it than a blind man had of the solar rays. It was of the highest value to the farmer and the grazier. It showed the effect of the mineral kingdom upon the animal kingdom; and its views were the results of the wisdom, experience, and first talents of Great Britain. The assertion of the senator, that the bank aided in producing a sound currency, he would disprove by facts and dates. In 1817 the bank went into operation. In three or four years after, forty-four banks were chartered in Kentucky, and forty in Ohio; and the United States Bank, so far from being able to put them down, was on the verge of bankruptcy. With the use of eight millions of public money, it was hardly able, from day to day to sustain itself. Eleven millions of dollars, as he could demonstrate, the people had lost by maintaining the bank during this crisis. But for a waggon load of specie from the mint, as Mr. Cheves informs us, it would have become bankrupt. In addition to this, the use of government deposits, to the extent of eight millions, was necessary to sustain it; and the country lost eleven millions by the diversion of those deposits to this purpose. Congress authorized the purchase of the thirteen millions of three per cents,—at that time, they could have been purchased at sixty-five cents, now they were at ninety-six per cent. This was one item of the amount lost, and the other was the interest on the stock from that time to the present, amounting to six millions more. It was shown by Mr. Cheves that the United States Bank owed its existence to the local banks—to the indulgence and forbearance of the banks of Philadelphia and Boston, notwithstanding its receipt of the silver from Ohio and Kentucky, which drained that country, destroyed its local banks, and threw down the value of every description of its property. The United States Bank currency was called by the senator the poor man's friend. The orders on the branches—these drafts issued in Dan and made payable in Beersheba—had their origin with a Scotchman; and, when their character was discovered, they were stopped as oppressive to the poor; and this bank, which was cried up as the poor man's friend, issued those same orders, in paper so similar to that of the bank notes, that the people could not readily discern the difference between them. It was thought that the people might mistake the signature of the little cashier and the little president for the great cashier and the great president. The stockholders were foreigners, to a great extent—they were lords and ladies—reverend clergymen and military officers. The widows, in whose behalf our sympathy was required, were countess dowagers, and the Barings, some of whom owned more of the stock than was possessed in sixteen States of this Union."