The Whigs have always been exceedingly unlucky in regard to the time of these periodical revulsions, occasioned by excessive banking. They have either come too soon or too late to answer their political purposes. Had the suspension of specie payments occurred one year sooner than it did, the hero of Tippecanoe might have been the successor of the hero of New Orleans. But the revulsion came again at the wrong time; and long before the Presidential election of 1840, the country will again be prosperous. The effects of the suspension will have passed away, like the baseless fabric of a vision, without leaving a trace behind. Our late experience has been so severe, that the next bank explosion may possibly be postponed until the year 1844. Whom it may then benefit I know not, nor do I much care. One thing is certain, that these revulsions can never do anything but injury to the party in power. It is the nature of man to accuse the Government, or anything else, except his own misconduct, for his misfortunes.
I now approach a much more agreeable part of my subject; and that is, to prove that the banks must and will speedily resume specie payments. I shall attempt to establish that now is the very time, the accepted time, the best time, and, within the period of a few months, the only time, when they can resume, without the least embarrassment. Some of the causes which will speedily effect this happy result, I shall enumerate.
In the first place, I shall do the banks of the country generally the justice to say, that since the suspension of specie payments they have curtailed their circulation and their loans to a great extent, and have done everything they reasonably could to atone for their past extravagance. The banks of Pennsylvania, including that of the United States, during a period of ten months, commencing in January, and ending in November, 1837, had reduced their circulation from twenty-five millions and a quarter to almost seventeen millions, and their discounts from eighty-six millions and a half to nearly seventy-one millions, whilst, during the same period, they had increased their specie from five millions and three-quarters to upwards of seven millions. From all I can learn, they have been since progressing at nearly the same rate, though I have not seen their official returns. The banks of other States have been generally pursuing the same course. The consequence is, that the confidence of the country in their banking institutions has been, in a great degree, restored. I feel convinced that if they should resume specie payments to-morrow, in the interior of Pennsylvania, at least, there would be no run upon them, except for as much silver change as might be required to supply the place of the miserable trash now in circulation under the denomination of shinplasters. Besides they would soon receive on deposit a greater amount from those who have been hoarding specie, under the belief that it would be safer at home than in the banks, and in the hope that they might hereafter use it to great advantage. No foreign demand now exists to drain the banks of their specie; on the contrary, the reflux tide has set in strongly, and is now wafting immense sums of gold and silver to our shores.
But, sir, another powerful cause of resumption exists. Our exports of cotton have, many months ago, paid our foreign commercial debt. Whilst that has been extinguished, the disastrous condition of our currency has reduced almost to nothing the orders of our merchants for foreign goods. Our imports are of small comparative value. In the mean time, our cotton crop of 1837 has been regularly and steadily seeking its accustomed markets in England and France. We have sold much, and bought little, and the balance in our favor is nearly all returning in specie. From the last English accounts which I have seen, the exports of specie from that country to this were still on the increase; and now, by almost every vessel from abroad which reaches our shores, we are receiving gold and silver. Specie, by the latest advices, was the most profitable means of remittance from England to the United States, yielding a profit of four per cent. When Congress met in September last, the rate of exchange against us on England was upwards of twenty per cent. It is now reduced to six per cent., which is three or four per cent. below the specie par. A great revolution in so short a period! It proves how vast are the resources of our country.
This great revolution has been effected by means of our cotton. The English manufacturers must have this article, or be ruined. This necessity has reversed the ordinary laws of trade, and the foreign market for it has remained firm and steady, although we bring home scarcely any equivalent, except in specie.
If a large portion of our cotton crop still remains unsold, so much the better. The golden tide will continue so much the longer to flow into our country. It is the policy of our banks to take it at the flood, and go on to fortune. If the banks do but seize the present golden opportunity, they will have completely fortified themselves before a reverse can come. This state of things cannot always continue. A reaction must occur. If the banks wait for the ebbing tide, and postpone a resumption until our merchants shall make heavy purchases abroad, and specie shall begin to be exported, they will then encounter difficulties which they need not now dread. I again repeat that this moment is the accepted time for the banks to resume.
But it is not only the ordinary laws of trade which are now bringing vast amounts of specie to our country. Two other causes are operating powerfully to produce this result.
The conduct of the Bank of England, in arresting its credits to the American houses, which was the immediate cause of the suspension of specie payments, has been loudly condemned by men of all parties there. This measure has done that country nearly as much injury as it has done this, because England must always suffer from every derangement in our currency. The Bank is now conscious of this truth, and is retracing her steps. She has increased her stock of bullion between February, 1837, and March, 1838, from £4,032,090 to upwards of ten millions sterling. She is now strong, and it is her interest, as well as that of the people of England, that she should use this strength in assisting us to resume specie payments. Accordingly, she has, through the agency of one of our most intelligent and enterprising citizens, made an arrangement to furnish the banks of New York one million sterling in specie, to aid them in resuming payments in gold and silver. This million is now arriving, by instalments, in the United States. In resuming at the present moment, our banks have everything to hope, and nothing to fear, from England.
Again: The spirit of internal improvement is abroad throughout our land. States and private companies have loans to make for the purpose of erecting their public works. Money is now plenty in England, and is everywhere seeking an investment. The derangement in the business of that country has thrown capital out of employment. The rate of interest has been reduced to three and three and a half per cent. Their capitalists are anxious to make secure investments in loans to our different State governments, and incorporated companies, at a higher rate of interest than they can obtain at home. These loans are now being disposed of in England to a very large amount; and the greater proportion of their proceeds must return in specie to this country. Everything is propitious to an immediate resumption by our banks.
Will the Bank of the United States resume? I confess I do not doubt the fact. She has made a false movement, and it is the great prerogative of strength to acknowledge and retrieve an error. Her late manifesto against the resumption of specie payments has not found a single advocate on this floor. It has struck dumb all her friends. But yesterday she might have stood against the world. To-day there is none so poor as to do her reverence. Even those who must politically suffer by the resumption, because “it will be conclusively employed at the next elections, to show that the schemes of the executive are not so destructive as they will prove hereafter,” have not dared to break a lance in her defence. This was not wont to be the case in days of yore, for hitherto her champions have been always ready to do battle in her cause. Notwithstanding all which has been said upon the subject, I am not one of those who believe that the Bank of the United States is not able to resume. Although the statement of her condition, as recently published, is not very flattering, yet her resources are vast. She is able if she were willing. Of this I cannot entertain a doubt.