Martin Van Buren

by Edward Morse Shepard

"Peace to corrupt, no less than war to waste."

He would punish suspension of specie payments by a bank with a forfeiture of its charter and the imprisonment of its president and officers. A national bank, he said, was "the only practicable expedient for restoring and maintaining specie payments." In the extra session he showed that the deposit banks of the South already held more money of the government than their States would receive, if the last installment of distribution should be paid, while the Northern banks held far less of that money than the Northern States were to receive. He denounced as a Southern measure the proposition to postpone this piece of recklessness. Should the Northern States hail with shouts of Hosanna "this evanescence of their funds from their treasuries," or be "humbugged out of their vested rights by a howl of frenzy against Nicholas Biddle," or be mystified out of their money and out of their senses by a Hark follow! against all banks, or by a summons to Doctors' Commons for a divorce of bank and state?

That skillful political weathercock, Caleb Cushing, told his constituents at Lowell that private banking was the "shinplaster system;" and asked whether we wished to have men who, like the Rothschilds, make "peace or war as they choose, and wield at will the destiny of empires." The plan of the administration was like that of "a cowardly master of a sinking ship, to take possession of the long boat and provisions, cut off, and leave the ship's company and passengers to their fate." To the plausible cry of separating bank and state he would answer, "Why not separate court and state ... or law and state ... or custom-house and state." It was "the new nostrum of political quackery." Clay delivered a famous speech in the Senate on September 25, 1837. He was appalled at the heartlessness of the administration. "The people, the States, and their banks," he said in the favorite cant of the time, "are left to shift for themselves," as if that were not the very thing for them to do. We were all, he said,—"people, States, Union, banks, ... all entitled to the protecting care of a parental government." He cried out against "a selfish solicitude for the government itself, but a cold and heartless insensibility to the sufferings of a bleeding people." The substitution of an exclusive metallic currency was "forbidden by the principles of eternal justice." For his part he saw no adequate remedy which did "not comprehend a national bank as an essential part of it." In banking corporations, indeed, "the interests of the rich and poor are happily blended;" nor should we encourage here private bankers, Hopes and Barings and Rothschilds and Hottinguers, "whose vast overgrown capitals, possessed by the rich exclusively of the poor, control the destiny of nations."

The bill for the independent treasury was firmly pressed by the administration. It did not deceive the people with any pretense that banks and paper money would stand in lieu of industry, economy, and good sense. The summer elections, then far more numerous than now, had, as Clay warningly pointed out, gone heavily against Van Buren. The bill passed the Senate, 26 to 20. In the House it was defeated. Upon the election of speaker, the administration candidate, James K. Polk, had had 116 votes to 103 for John Bell. But this very moderate majority was insecure. A break in the administration ranks was promptly shown by the defeat, for printers to the House, of Francis P. Blair and his partner, who in their paper, the "Washington Globe," had firmly supported the hard money and anti-bank policy. They received only 107 votes, about fifteen Democrats uniting with the Whigs to defeat them. Van Buren was unable to educate all his party to his own firm, clear-sighted views. There was formed a small party of "conservatives," Democrats who took what seemed, and what for the time was, the popular course. The independent treasury bill was defeated in the House by 120 to 106.

Van Buren's proposal was carried, however, to postpone the "deposite," as it was called, the gift as it was, of the fourth installment of the surplus. On October 1, Webster and Clay led the seventeen senators who insisted upon the folly of the national treasury in its destitution playing the magnificent donor, and further debauching the States with streams of pretended wealth. Twenty-eight senators voted for the bill; and in the House it was carried by 118 to 105, John Quincy Adams heading the negative vote.

The administration further proposed the issue of $10,000,000 in treasury notes. It was a measure strictly of temporary relief. Gold and silver had disappeared; bank-notes were discredited. The government, whose gold and silver the banks would not pay out, was disabled from meeting its current obligations; and the treasury notes were proposed to meet the necessity. They were not to be legal tender, but interest-bearing obligations in denominations not less than $50, to be merely receivable for all public dues, and thus to gain a credit which would secure their circulation. This natural and moderate measure was assailed by those who were lauding a paper currency to the skies. The radical difference was ignored between a general currency of small as well as large bills, without intrinsic value, adopted for all time, and a limited and perfectly secure government loan, to be freely taken or rejected by the people, in bills of large amounts, to meet a serious but brief embarrassment. "Who expected," said Webster in the Senate, "that in the fifth year of the experiment for reforming the currency, and bringing it to an absolute gold and silver circulation, the Treasury Department would be found recommending to us a regular emission of paper money?" He voted, however, for the bill, the only negative votes in the Senate being given by Clay and four others. In the House it was carried by 127 to 98.

Such was the substantial work of the extra session. To the experience of that crisis and the wisdom with which it was met may not improbably be ascribed the hard-money leaven which, thirty or forty years later, prevented the great disaster of further paper inflation, and brought the country to a currency which, if not the best, is a currency of coin and of redeemable paper, whose value, apart from the legal-tender notes left us by the war and the decision of the Supreme Court, depends upon the best of securities, coin or government bonds, deposited in the treasury, and a currency whose amount may therefore safely be left to the natural operations of trade.

Clay's appeal for a great banking institution, which should accomplish by magic the results of popular labor and saving, was met by a vote of the House, 123 to 91, that it was inexpedient to charter a national bank, many voting against a bank who had already voted against an independent treasury. The Senate also resolved against a national bank by 31 to 14, six senators who had voted against an independent treasury voting also against a bank. The temporary expedient adopted by the treasury on the suspension of the banks was therefore continued, and public moneys were kept in the hands of public officers.

Calhoun now rejoined the Democratic party. It was only the year before he had denounced it as "a powerful faction held together by the hopes of public plunder;" and early in this very year he had referred to the removal of the deposits as an act fit for "the days of Pompey or Cæsar," and had declared that even a Roman Senate would not have passed the expunging resolution "until the times of Caligula and Nero." But Van Buren, Calhoun now said, had been driven to his position; nor would he leave the position for that reason. He referred to the strict construction of the powers of the government involved in the divorce of bank and state. There was no suggestion that Van Buren had become a convert to nullification. But Calhoun could with consistency support Van Buren. The independent treasury scheme was plainly far different from the removal of the deposits from one great bank to many lesser ones. The reasons for political exasperation had besides disappeared. Van Buren was chief among the beati possidentes, and could not for years be disturbed. His tact and skill left open no personal feud; he had not yet conferred the title of Cæsar; no successor to himself was yet named by any clear designation. Calhoun joined Silas Wright and the other administration senators; but he still maintained a grim and independent front.

The extra session ended on October 16. Besides the issuance of $10,000,000 in treasury notes and the postponement of the distribution among the States, the only measure adopted for relief was a law permitting indulgence of payment to importers upon custom-house bonds. As those payments were to be made in specie, and as specie had left circulation, it was proper that the United States as a creditor should exhibit the same leniency which was wise and necessary on the part of other creditors.