No public question was ever longer or more severely agitated in any country than that of the existence of a national bank has been in this. Madison acquired enduring honor by his unanswerable speech against its constitutionality. It divided the cabinet of President Washington, and contributed with other causes to give birth to a political party which kept his administration at bay, overthrew that of his successor, has sustained itself in power ever since (with brief and easily explained interruptions), and is now, after the lapse of nearly seventy years, in full possession of the Federal Government. It gave position in 1811 to Henry Clay as one of the strong minds of the country, derived from his speech against rechartering the bank, by far the best speech he ever made and nearly equal to that of Madison in 1790, and it enabled that venerable revolutionary patriot, George Clinton, to add new laurels to his already great fame by his casting vote against the passage of the bill for its re-incorporation. Whilst in 1815 it marred forever the political fortunes of Clay and Calhoun, then standing at the head of the rising Republican statesmen of the country, in 1830 it made memorable and glorious the civil career of Andrew Jackson through his celebrated veto—a noble step in that fearful issue between the respective powers of the Government and the Bank, on the trial of which that institution justified and confirmed Jefferson's gloomy forebodings at its first establishment by spreading recklessly and wantonly (as is now well understood) panic in the public mind and convulsions in the business affairs of the people, through which incalculable injury was inflicted upon the country, and by wasting its entire capital of thirty millions in wild speculation and in corrupt squandering upon parasites and political backers. It did not however prove too strong for the Government, as Mr. Jefferson apprehended, but was itself overwhelmed in utter defeat and disgrace. So thorough has been its annihilation that its books and papers were a few months since sold by auction, in Philadelphia, by the ton, as waste paper!
Who can call to mind without amazement the extent to which the impression was fastened on the public judgment that a national bank was of vital necessity to the healthful action of the Federal Government, indispensable to the collection of its revenues, to the management of its finances, to the transfer of its funds from point to point, and, above all, to the execution and support of domestic exchanges, without which the most important business of the country would be unavoidably suspended, and now see that all this was sheer delusion; or who can reflect upon the bold and profligate action taken by the bank to force a compliance with its application, without acknowledging and admiring the wisdom of the Federal Convention in refusing, as it did almost in terms, to confer upon Congress the power to establish such an institution, so inefficient for good and so potent for mischief, or without applauding the true conservatism and patriotic spirit of the Democratic party during a forty years' struggle to expel from our system so dangerous an abuse, or without rejoicing that that great object was finally achieved and blessing the memory of the brave old man to whom the achievement is mainly to be credited.
The Protective System was another of the important measures brought forward at the commencement of the Government, and had its origin in the prolific mind of Hamilton. Efforts have been made to trace its commencement to the legislation of the first Congress, but they have not been successful. The idea of protection, beyond that which is incidental to a tariff for revenue and could be effected without losing sight of the revenue point, was not, at that time, broached in Congress or inferable from the character of the duties imposed. It was in Hamilton's masterpiece—his elaborate report, nominally upon manufactures, but embracing in its range every pursuit of human industry susceptible of encouragement under an unlimited government—that the subject was first brought to the notice and recommended to the favorable consideration of Congress.
I have already described, more fully, perhaps, than might on first impression be thought necessary, the length and breadth of that famous document, the boldness and extravagance of its ultra-latitudinarian pretensions to power in the Federal Government, including unlimited authority to raise money by taxes and an equally unlimited power to spend it in any way which Congress might think would be conducive to the general welfare. The vehement denunciation of its character by Mr. Jefferson and his friends, with continually increasing indications of popular discontent, prevented Hamilton from attempting any measures worthy of notice to carry into effect his recommendations—and no assumptions, beyond the revenue standard, were acted upon by the administrations of either Washington or Adams.
The enforcement of Hamilton's recommendations was reserved for the close of the War of 1812, a period of which I have already spoken as one which brought on the political stage a new class of Presidential aspirants, members of a succeeding generation and unknown to revolutionary fame. Among the most prominent of these stood Crawford, Clay, Calhoun, Adams, Webster, and Lowndes,—the latter, perhaps, the most likely to have succeeded, if his useful life had not been brought to a premature close.
In the same year, 1815, was revived the idea of a national bank, and no fitter associate could have been devised for it than the Protective System. They had a common origin, even in their political aspects, were designed for a common effect, and were moreover alike adapted to the immediate policy of two of the Presidential aspirants of the Republican stamp, Clay and Calhoun,—that of conciliating the good-will of those who still clung to the wreck of the Federal party, which having been shattered and disabled by its course in the war, was at the moment drifting upon the political seas. Henry Clay, with better qualifications for success than his not less ambitious rival, seized the prize in view, and after long competition from the latter, and against perpetual, though sometimes concealed opposition from Webster, attached the mass of the Federal party to his fortunes, and held them there to the close of his remarkable life. Shouldering a large share of responsibility for the reintroduction of a national bank, he added to his programme the Protective System, stopping in the first instance at a protective tariff, but willing, as was clearly seen, to embrace Hamilton's entire scheme, and superadding to these a system of internal improvements by the Federal Government, in respect to which he went, on the point of constitutional power, beyond his great prototype. These were the elements out of which he constructed his famous "American System." A convert to theories and measures hostile to the earliest and most cherished principles of the old Republican party, he of course soon lost his position in its ranks, and was in due season installed as the leader of that with which all its wars have been waged. Possessing certain qualities eminently adapted to attract the popular admiration, and which could not have failed to elevate him to the Presidency if he had remained in the Democratic party and had adhered to its principles, he infused into the torpid body of the Federal party elements of strength, of which it had always stood in need; besides bringing to it a leader of fascinating manners and brilliant talents, he gave a new and more captivating form to the platform of principles and policy in support of which its original members and their descendants had been trained, excepting only the Funding System, which had not only been tabooed by the good sense of our people, but as to which England was yet uttering warnings to other nations of too fearful import to allow its revival here to be for a moment contemplated even by a politician so bold and too often reckless as Clay. Thus reinvigorated and backed by the money-power of the country, during a quarter of a century, and with never quailing spirit, he conducted that party, under various names but striving always under the banner of the same "American System," through a succession of political campaigns which left their injurious traces upon the country.
The fruits of this warfare against the Democratic party and its principles are familiar to politicians and observers of our times. The Bank of the United States, after filling the country with distress and ruin, itself perished; the proposed system of internal improvements by the Federal Government was happily broken down by his opponents before it involved the country in inextricable embarrassments, and the Protective System, after being finally overthrown in England, from which country we had copied it, was abandoned here also, and consigned by the judgment of the people to the same oblivion with its kindred delusions.
The promotion of internal improvements by the General Government was an assumption of power by Congress, against which, from its first inception till its substantial overthrow, the Democratic party interposed a steady, persevering, and inflexible resistance. The general character of the abuse, its origin, progress, and extirpation through Democratic agencies, are fully presented in another part of this work.[40] Here the probable effect upon the national treasury of arresting the practice will alone be noticed.
In his annual message to Congress, December, 1834, President Jackson says:—
"When the bill authorizing a subscription on the part of the United States for stock in the Maysville and Lexington Turnpike Companies passed the two Houses, there had been reported, by the committees of internal improvements, bills containing appropriations for such objects, exclusive of those for the Cumberland Road and for harbors and light-houses, to the amount of about one hundred and six millions of dollars. In this amount was included authority to the Secretary of the Treasury to subscribe to the stock of different companies to a great extent, and the residue was principally for the direct construction of roads by this Government. In addition to those projects, which had been presented to the two Houses, under the sanction and recommendation of their respective committees on internal improvements, there were then still pending before the committees, and in memorials to Congress, presented but not referred, different projects for works of a similar character, the expense of which cannot be estimated with certainty but must have exceeded one hundred millions of dollars."