“I recommend ... the expediency of authorizing the Executive to take temporary possession of any part or parts of the said territory, in pursuance of arrangements which may be desired by the Spanish authorities.... The wisdom of Congress will at the same time determine how far it may be expedient to provide for the event of a subversion of the Spanish authorities within the territory in question, and an apprehended occupancy thereof by any other foreign Power.”
In secret session Congress debated and passed an Act, approved Jan. 15, 1811, authorizing the President to take possession of East Florida, in case the local authority should consent or a foreign Power should attempt to occupy it. The President immediately appointed two commissioners to carry the law into effect. The orders he gave them, the meaning they put on these orders, the action they took, and the President’s further measures were to form another remarkable episode in the complicated history of Florida.
Congress next turned to the charter of the United States Bank; but if it succumbed before West Florida, it was helpless in dealing with finance. Long hesitation had ended by creating difficulties. Local interests hostile to the Bank sprang into existence. In many States private banks were applying for charters, and preparing to issue notes in the hope of seizing their share of the profits of the United States Bank. The influence of these new corporations was great. They induced one State legislature after another to instruct their senators on the subject. That Massachusetts, Pennsylvania, and Maryland should wish to appropriate the profits of the National Bank was not surprising, but that Virginia and Kentucky should make themselves instruments of the capitalist States showed little knowledge of their true interests. As the crisis came near, the struggle became hotter, until it rivalled the embargo excitement, and every hour of delay increased the vehemence of opposition to the charter.
The Bank was vulnerable on more than one side. Largely owned in England, it roused jealousy as a foreign influence. Congress could hardly blame this ownership, since Congress itself, in 1802, aided President Jefferson in selling to the Barings, at a premium of forty-five per cent, the two thousand two hundred and twenty Bank shares still belonging to the government. The operation brought to the Treasury not only a profit of four hundred thousand dollars in premiums, but also about thirteen hundred thousand dollars of British capital to be used for American purposes. Fully two thirds of the Bank stock, amounting to ten million dollars, were owned in England; all the five thousand shares originally subscribed by the United States government had been sold to England; and as the Bank was a mere creature of the United States government, these seven millions of British capital were equivalent to a score of British frigates or regiments lent to the United States to use against England in war. By returning them, the United States seriously weakened themselves and strengthened their enemy.
Unfortunately this interest was national. Local interests felt that Englishmen received profits which should belong to Americans; and capitalists in general were not inclined to lower their profits by inviting foreign capital into the country unless they shared its returns. The second misfortune of the Bank was that of being a Federalist creation, chiefly used for the benefit of Federalists, who owned most of the active capital in the country. The third objection went deeper. The Bank was the last vestige of strong government created by the Federalists,—a possible engine of despotism; and no one could deny that if decentralization was wise, the Bank should be suppressed. Finally, the Bank was a bulwark to Gallatin; its destruction would weaken Madison and drive Gallatin from office.
Doubtless the objections to the Bank were so strong as some day to become fatal. In a society and government so little developed as those of America, a National Bank was out of keeping with other institutions. Even in England and France these banks exercised more influence over the Treasury than was proper; and in America, if once the Bank should unite in political sympathy with the Government, it might do no little harm. The necessity for such an institution was merely one of the moment, but in the period of national history between 1790 and 1860, the year 1811 was perhaps the only moment when destruction of the Bank threatened national ruin. A financial cataclysm had prostrated credit from St. Petersburg to New Orleans. Prices were nominal. England owed America large sums of money, but instead of discharging the debt, she was trying to escape payment and withdraw specie. Already the supply of specie in the United States was insufficient to sustain the bank-note circulation. In New York city the State banks were supposed to hold not more than half a million dollars, and in Pennsylvania not much more than a million; while the Bank of the United States had lost three and a half millions in eleven months, and had but five and a half millions left.[268]
Meanwhile the State banks not only expanded their issues, but also rapidly increased in number. Suppression of the National Bank could not fail to stimulate this movement. “The banks established by the State legislatures will scramble for the privilege of filling the chasm to be made by the destruction of the Bank of the United States. Already are they preparing for the patriotic endeavor. Our State legislatures are to be importuned to become bank jobbers and joint undertakers and copartners in the enterprise.”[269] Nothing could prevent expansion of credit, drain of specie, bankruptcy and confusion of the currency; and this was to be done at the time the country entered into a war with the only Power whose influence could shake the Union to its foundation.
Madison stood aloof, and left on Gallatin the burden of the struggle; but Gallatin’s energies and influence could do little with the Eleventh Congress. He was strongest in the House; but there the debate, after many speeches, ended, January 24, by a vote of sixty-five to sixty-four in favor of indefinite postponement, and by common consent all parties waited for the Senate to decide. The omen was not happy for the Treasury.
Gallatin had at last found a capable senator to support him. The political fortunes of William Henry Crawford, which ended only at the threshold of the White House, drew no small part of their growth from his courageous defence of the Treasury during these chaotic years. Crawford showed the faults of a strong nature,—he was overbearing, high-tempered, and his ambition did not spurn what his enemies called intrigue; but he possessed the courage of Henry Clay, with more than Clay’s intelligence, though far less than his charm. Crawford was never weak, rarely oratorical; and if he was ever emotional he reserved his emotion for other places than the Senate. “One man at last appeared who filled my expectations,” wrote Gallatin many years afterward to an old and intimate friend.[270] “This was Mr. Crawford, who united to a powerful mind a most correct judgment and an inflexible integrity,—which last quality, not sufficiently tempered by indulgence and civility, has prevented his acquiring general popularity.” February 5 he introduced into the Senate a bill continuing the old Bank charter for twenty years on certain conditions; and February 11 he supported the bill in a speech remarkable for the severity of its truths. He began by challenging the Constitution itself:—
“Upon the most thorough examination [of the Constitution] I am induced to believe that many of the various constructions given to it are the result of a belief that it is absolutely perfect. It has become so extremely fashionable to eulogize this Constitution, whether the object of the eulogist is the extension or contraction of the powers of the government, that whenever its eulogium is pronounced I feel an involuntary apprehension of mischief.”