Abridgment of the Debates of Congress, from 1789 to 1856, Vol. 4 (of 16)

by United States. Congress

Saturday, February 16.

Bank of the United States.

The Senate resumed, as in Committee of the Whole, the bill to amend and continue in force an act, entitled "An act to incorporate the subscribers to the Bank of the United States, passed on the 25th day of April, 1791;" the motion to strike out the first section being under consideration.

Mr. Smith of Maryland said, that in seconding the motion to strike out the first section of the bill, he had pursued a course which, in his opinion, was the most correct. When I first took a seat in Congress (said he) the course of proceeding was to fix the principle by resolution, and, that once fixed, to send it to a committee to report a bill. By a motion to strike out the first section the principle will be tried, and the Senate, if the motion fails, will go into a discussion of the provisions of the bill. This I conceive a better course, than, for the Senate to go into discussion of the details of a subject which would probably be ultimately rejected on the general ground of principle.

The gentleman who introduced this subject spoke with great animation and with great feeling against the press or presses which have undertaken to give their opinions upon this great and important question. He spoke with much warmth, and said that whoever knew him would not believe that he would permit himself to be driven out of his opinion by any man or set of men. There is no man, sir, the least acquainted with the gentleman from Georgia (Mr. Crawford) but will believe his declaration. But another result may be apprehended, that those who feel so great an offence at the freedom the press has taken, may be driven into the opposite course by the irritation of their feelings. Certainly those feelings must have been extremely strong with the gentleman from Kentucky (Mr. Pope) to have induced him to terminate his speech with an oration hostile to the press. Are the gentlemen from Georgia and Kentucky the only Senators who have had their feelings wounded by the conduct of the press upon this subject? Sir, if the gentleman's opinions and sentiments have been censured by one description of presses, he may find consolation in having been greatly eulogized in others. For more than a year those on the same side of this question with myself have had their opinions tortured into every shape to destroy them in the estimation of the people, not only in this session but during the last. Sir, there are some presses in the Union which could not exist, whose papers would not be read, but for the discussion of individual character. Is any advantage to be derived from complaining of this? It results from the nature and temper of our Government, and the best way I have ever found to treat it is with silent contempt. He who does otherwise engages in the contest at a great disadvantage, and will seldom come out the victor. In the same presses of which those gentlemen complain, I have seen them both eulogized, and properly, for their conduct on the subject of the embargo and West Florida questions.

If the press be an evil in this respect, we must submit to it; those gentlemen who take a high and prominent stand must expect to be noticed. Sometimes gentlemen will be put down by the press, but their conduct being correct will more frequently be written up by its abuse.

It has been objected that this question is discussed on the ground of party; and the gentleman from Georgia, as I understood him, said, that this had been made a party question elsewhere, and might be so here. [Mr. Crawford said he had mentioned no place, but had said that this might be made a party question.] I understood the gentleman to say, said Mr. S., that this may again be made a party question. But for this observation of the gentleman the subject of party would probably not have been introduced at all; and we must indeed shut our eyes or we cannot avoid seeing that this is made a party question, at least on one side. Do you see one gentleman, one solitary gentleman of one party, discriminated generally as a Federal, who does not vote for this measure throughout? Do you see one public body in Philadelphia or New York which has a majority of Federal directors or agents, which has not come before you with memorials drawn up with the ingenuity of lawyers, to impose on your judgments? Have not the same party prepared memorials and got the subscription of every one of their caste, bringing forward nearly the same number of petitioners as they have of Federal voters? Have they not done so in Baltimore? Of that city I would say as little as may be, for being a manufacturing as well as a commercial city, it has stirred up an animosity in some gentlemen against it not easily accounted for. In Baltimore, on a warmly-contested election, the Federal party mustered eight hundred and fourteen votes, all they could parade with their every exertion. To the petition for the renewal of the charter of the bank, there are eight hundred and forty odd signatures! They have gained some few since the latest contest. Is this coincidence of members, this exclusively Federal petitioning, no mark of party? They have also got one public body in Baltimore to memorialize in favor of the bank; the rest were not to be intimidated by the threats of the Bank of the United States. What, sir, have the other party done? Have they disturbed the quiet of either House? Have they brought forward the mass of their voters as signers to petitions? No, sir, they have trusted the subject to their Representatives, confiding in their disposition and ability to speak their sentiments. The representation of New York, Philadelphia, Baltimore, Norfolk, and Charleston, in the other House, have opposed the renewal of the charter. Every city high in estimation as a commercial city is opposed to the renewal of the charter, except Boston. This speaks with a strong voice what are the feelings of the people; stronger evidence cannot be presented to the human mind. Far be it from me, sir, to endeavor to work up the feelings of party spirit on this occasion; but the thing itself was one of the first causes which created the present parties, and separated man from man and brother from brother. This measure was originally brought forward and adopted when the representation in Congress was not bottomed on an actual supposed census of the United States. Sixty-five members composed Congress then, which was a representation taken by accident. If a proportionate representation had been given to the States according to their population, the law probably would not have passed. The States of North Carolina and South Carolina had each five Representatives, being thus placed on an exact equality. Now, North Carolina has twelve, South Carolina only eight. What was the vote then? Out of sixty-five members thirty-nine voted for the bill. It was not, as my friend from Kentucky said, a subject fully discussed, or carried by a tremendous majority.

The bank having been formed, it may not be improper for me to take some view of its beginning and its operation. At first its operations were confined to Philadelphia; it extended its branches some time afterwards to Boston, New York, Baltimore and Charleston. Wherever it extended its influence, dissension commenced; wherever it placed its foot it became absolutely necessary for the States to erect another bank to counterbalance its pecuniary and political influence. In Philadelphia it began to oppose certain people and turn down their paper. The State of Pennsylvania, in defence of its own citizens, created the Bank of Pennsylvania. Here was a check upon its pecuniary and political operations. I believe I am not mistaken when I say that soon after it commenced in Boston a new bank was established there, from what cause I know not. In Baltimore, sir, it soon taught us a lesson, and we met the lesson as other States had done. Charleston and New York acted in a similar way. Operating as the bank did on the politics of the country before its effects were neutralized by competition, man being man, place him where you will, those concerned in the direction of the bank felt power and exercised it. When the British treaty was pending before Congress, the president and directors (as I am informed) themselves carried about a memorial to Congress in its favor, with what view and with what effect may easily be conceived. In Baltimore (until we were able to check them by other banks) its political influence was great. Prior to the great struggle between the parties, in 1798, they did permit one democrat to be within the walls of the sanctuary (as a director), a gentleman of as much respectability and independence of character, as any one of the direction. He was, however, (immediately after daring to give his vote in favor of a democratic candidate,) put out, and since that time no man of democratic principles has been permitted to enter its walls as a director. Men must shut their eyes to the fact of this being a party institution, when they see that no democrat has been admitted to the direction of the bank but in this city and New York, where the collector was admitted a director for the purpose of protecting the public money at the instance (it is said) of the Secretary of the Treasury. Can we shut our eyes so as not to see that men hostile to the democratic party, and of course to the success of the administration of the Government, are not the most proper persons to have charge of its pecuniary concerns? I would have been very unwilling to have gone into this part of the subject; but when the gentleman from Kentucky, scarcely able to restrain his rage, cried out, party! party! I was bound to show that it was not those with whom I act who had any agency in pressing the subject of party into the present discussion.

The gentleman from Kentucky reprobates the system of petty mischievous intrigue for the purpose of carrying measures through Congress. No man, sir, despises or contemns such conduct more than I do. But on whose side has this intrigue been? It is necessary to put the saddle on the proper horse. Have we gone to insurance companies or corporations of one kind or another? Have we intrigued with the people to induce them to take sides with us? No, sir, we have been tranquil; we wanted no aid of that kind. Have we sent persons here to intrigue with members, or a deputy to remain here the whole of the last and present session, to explain to Congress the effect of putting down the bank, and threaten them with destruction and ruin to the United States if they passed the measure? No, sir, we have had no one here. Have we stirred up the people into town meetings to aid us by memorials? No such thing, sir. Have we called meetings and induced honest mechanics to come here to influence Congress by idle fears, impressed upon them by those who are interested, to tell a tale that shall answer our purposes? No, sir, we have pursued no such course.

Respectable merchants, I observe, form a part of the bank deputies—for what? To represent the late fall of the price of flour as a consequence of the danger of the bank charter not being renewed, and thereby to alarm the minds of members. I am sorry that men of such respectable character did permit themselves to come here on such an errand. I think I have seen in the papers, that one of the manufacturers (now here) on being asked to sign a petition for the renewal of the charter for twenty years, said he would rather cut off his right hand than sign it; he wished only a renewal for a short time to give the bank an opportunity to wind up its affairs. If this statement be true, and of its truth I have no cause to doubt, it shows the depth of that intrigue which sent this gentleman here, through the instrumentality of his excellent character, to get a renewal of the charter for a period which he never contemplated. These are intrigues for which men ought to blush, and from which, I thank God, we are exempt. At the time these deputies arrived, there were three mechanics of Baltimore here, of character inferior to none, and of wealth inferior to few in Philadelphia, and who would have given a different view of the subject, if they had been asked to appear before the committee. I thought it unnecessary—I wanted no assistance of that kind—no species of intrigue. They did, however, declare, sir, that granting this charter would be a death-blow to the politics of the State of Maryland. They did believe the renewal would be injurious to them, for neither they nor many of the manufacturers of Baltimore had received much advantage from the branch bank; they had their own banks from which they generally received accommodation. Another species of intrigue is carried on, to wit, by pamphleteering. The press is groaning with pamphlets—for what? To teach the minds of members on this question, the necessity of renewal and probability of destruction to the nation, if their demands are not complied with. Our tables are covered with pamphlets of that tendency. Has there been any thing of the kind on our part?

There is scarcely an evil which has not been attributed to the embargo, and which is not now, with as little justice, attributed to the expected non-renewal of the bank charter. Great failures have lately taken place at New York; bills of exchange on London, to a large amount, have returned protested, and the drawers are not able to pay the holders, and to the present critical situation of the bank some gentlemen attribute the distress brought upon those who have suffered by these failures and protests. But, Mr. President, what is the real cause of those failures? They are confined principally to New York, and may be attributed to the following causes: It is natural for men born in Great Britain to entertain predilections favorable to a commerce with that country, their connections, as well commercial as of family, are there; their credit is there; and, from those causes, the house which has failed, and carried so many others with it in its fall, has probably directed the principal part of its commerce to England; they have, no doubt, shipped cotton and tobacco, the trade in which being in a great measure confined to Great Britain, the natural consequence has been, that the markets of England were completely glutted; tobacco, except the very fine Virginia, scarcely paid the charges of freight and commission, and the loss on cotton must have been nearly fifty per cent. The consignees, under those circumstances, refused to pay the bills drawn upon shipments of those articles. The bills returned protested, and ruin to the American shipper has been the consequence. At any other time the English merchants would have accepted the bills, and held the cargoes for a better market; but, at that time, ruin stared every man in the face. No man in London knew who to trust, and very few would enter into engagements which they saw any difficulty in meeting. No censure ought to be attached to the American shipper, for, by the usage of trade between the United States and Europe, the American merchant is entitled to draw for two-thirds the amount of his cargo on transmitting invoices and bills of lading with orders for insurance. Other causes have existed to cause the present distress in New York and elsewhere, to wit, the seizure, detention and confiscation of property in Denmark, Prussia, and France, of ships and cargoes to the amount of many millions, on the proceeds of which cargoes merchants calculated to meet their engagements at home, and to meet their bills drawn on London. For, sir, the merchants who make large shipments to the continent, order the greatest proportion of their proceeds to be remitted from thence to London, and, on the expectation thereof, draw bills on their friends there. Disappointment has been the consequence of such seizures and losses; protests of such bills and ruin has followed. But, Mr. President, we might with as much propriety attribute the late great failures in England and on the continent to the expected non-renewal of the bank charter, as those which have happened in New York, or the present distress of the merchants of the United States. The returns of the bills protested, to so large an amount, of course destroyed the merchant's credit at bank; he failed, and, by his fall, has caused the ruin of others. When a great house fails, it is like a game of nine pins; knock one down and it will probably carry with it four or five others.

We have been told, Mr. President, in case the charter should not be renewed, that we shall find in future great difficulty in obtaining loans. What loans, I ask, have Government ever received from the Bank of the United States? I recollect, when I first entered Congress, that Government were indebted for loans made from the bank, but I also recollect that the bank complained of her loans as an inconvenience, and that Congress took the earliest measure in their power to pay them off, and have, since that period, made no new loan from the bank until that made payable the first of January last. I will not inquire whether even that loan was necessary, but I will venture to promise, sir, and will give any security that may be required, that the State banks will give a similar accommodation, to wit: If the Secretary of the Treasury will deposit with the State banks two millions five hundred thousand dollars of the public money, (the amount of the late loan,) they will lend Government to the same amount, and thus do as the Bank of the United States has done, lend you your own money, and very kindly receive from you an interest of six per cent. therefor. We are told that the bank has lately lessened the discounts of individuals ten per cent., and that the merchants are thereby greatly distressed. Is that a fact? If it is, and great distress has ensued therefrom, what will be the distress of the merchants if the bill now before you shall pass; and if, agreeably to its provisions, Congress should (at any time hereafter) call on the bank for the loan of four millions promised by the bill? If, sir, a lessening of their discounts one-tenth per cent. creates distress, what will be the consequence, when, by a loan of four millions, called for from the bank, the bank shall be compelled to lessen the discounts four-tenths?

But, sir, the promise to lend four millions from a bank of ten millions is idle; it is worse, it is deception on the face of it. The loan, if made, would not be from the bank but from the merchants, whose discounts would thereby be lessened, and whose ruin would follow.

We are told that, if the charter of this bank be not renewed, and the funds of the United States be deposited in the State banks, it will be extremely unsafe, because it is said we can have no control over them. And, I wish to know, sir, what control we have over the Bank of the United States? None, but the same as we may have over the State banks. We cannot check the operations of the Bank of the United States, and if they obtain this charter, they will know that they can have their charter renewed whenever they please; so that, the fear of a non-renewal of their charter will have no operation on them in future. You will have a much greater control over the State banks, because you are under no obligation to put money in them, and you can change them whenever you think proper; the danger of losing the public deposits will always be a sufficient control over their conduct. The security of the State banks is doubted, however; and we are told, very gravely, indeed, that there is much more security in the mother bank, and her nine children, than in ten independent banks. This I must deny. I should, as a merchant, place more confidence in ten independent houses than in one with nine branches.