AMERICAN NEUTRALITY LOST IN WAR
The United States, as a maritime nation, could scarcely expect to escape the maelstrom of war induced by the task of suppressing the French Revolution and Napoleon, a task which occupied the legitimists of Europe for a quarter of a century, and involved every civilised nation of the Old World. President Washington had early laid the course of the ship of state on the medium way of neutrality. He maintained the course, although at the penalty of such abuse as we gladly forget at the present day. To continue that policy, President Adams wrecked his party, cut himself off with one term, and became a vicarious sacrifice when he chose negotiations with France instead of war. President Jefferson spent eight unhappy years for the same object. He endured national humiliation, was forced into coercive measures from which his soul revolted, and brought his country to the verge of commercial ruin to avoid war. President Madison, during his first four years, was made the tool of British diplomatic equivocation and the plaything of Napoleonic strategy to maintain the position chosen nearly two decades before; so great was the task and so fearful the cost of founding a neutral nation.
This delay of war proved most fortunate in the end. Those twenty years allowed the American merchantmen to increase in numbers until they were able to work such devastation on British commerce as marked the course of the War of 1812. The period allowed the new nation to acquire the strategic mouth of the Mississippi, and to make such inroads of settlers in the debatable land of the Floridas that Britain was unable to secure a permanent footing in them during hostilities. Twenty years carried forward the Old World struggle to a point so near its close that the Americans were able in the end to make surprisingly good terms in the general European demand for a world-peace.
As if to put the strict constructionists to the test on every side, the twenty years for which the Hamilton bank had been chartered expired in the midst of a conviction that war was inevitable. The bank, as a means of securing loans, would be indispensable during a war. The liberal-minded Gallatin brought in a report to Congress advocating a re-charter of the bank for another term of years. His arguments were much like those of Hamilton twenty years before. Is it given to the departed to know such a mortal pleasure as vindication?
Gallatin's recommendation evoked a storm of dissent from those members of the party who adhered to early principles. They would not give a new lease of life to this monopoly, unconstitutional in its origin and abused in its administration. State banks, if given an opportunity, could care for the United States money as well as an aristocratic, exclusive institution, seven-tenths of whose stock was held in England. This plea for the individual was the argument by which the opponents of re-charter met the predictions of financial ruin with which the advocates of Gallatin's suggestion filled the air. The withdrawal of twenty-four million dollars from circulation would mean a national panic, it was claimed. Arguments of expediency were heard where constitutionality had held twenty years before.
The unionising process which the former individualists had undergone in ten years of administration is illustrated by the speech of Crawford, of Georgia, a lifelong adherent to the principles of Jefferson in the main, but too liberal to be bound to a dead past. A rational analysis of the Constitution, he thought, would show that it was not perfect in language as commonly supposed, but that it occasionally gave a general power followed by a specific power.
"This analysis," said he, "may excite unpleasant sensations, it may assail honest prejudices; for there can be no doubt that honest prejudices frequently exist and are many times perfectly innocent. But when these prejudices tend to destroy even the object of their affection, it is ostensibly necessary that they should be eradicated."
In pleading that the Constitution should not be held down to a construction which would render it "wholly imbecile," he took as advanced ground on the implied powers as had any Federalist in the olden days. Ridiculing those who clung to the old restrictive theory, he cited numerous actions of the party during the ten years it had been in power which could be justified only by constitutional implication. Among these, he said, were laws for the punishment of counterfeiters, passed under the power to coin money; the erection of lighthouses under the power to regulate commerce; the prohibition of offences against the post-office department under the power to establish post-offices and post-roads; and the acceptance of sites for arsenals, forts, and dockyards under the power to control them. Even the acceptance of the District of Columbia depended upon the implied instead of the direct language of the Constitution. Nor did he fail to point out that in 1802, when removing the judges of the circuit courts established by the Federalists in their last hours, the party was proceeding entirely upon the assumption that the expressed power to create inferior courts contained the implied power to abolish them.
Petitions both for and against a re-charter of the Hamilton bank poured in from merchants in various cities and from branches of the bank. Instructions against the bank came from the State Legislatures of Virginia, Pennsylvania, and Kentucky. So nearly was opinion divided that a new lease of life for the bank was prevented in the House by only one vote, and in the Senate by the deciding vote of Vice-President Gerry, of Massachusetts, who chose to abide by party principles rather than to listen to the voice of the majority of people in his own State.
The predicted extension of State banks and the disorder in the finances of the country were alike experienced after the expiration of the United States Bank in 1811. More than two hundred of these private institutions were chartered in the various States to take the place of the branches of the old bank. They were to be found especially in the newer portions of the country, where banking facilities had been previously unknown. Flooding the land with their bank-notes, they speedily drove coin out of circulation. The latter was hoarded. When the war began, banks found it impossible to secure this hoarded coin to redeem their notes and were compelled to suspend specie payment completely. The National Government, having made these banks depositaries for the revenue collectors, according to the individualistic demands, suffered loss and disarrangement of its funds. The lesson was severe, especially in the face of an impending war.