Thomas Hart Benton

by Theodore Roosevelt

The first thing to be done was to provide for the immediate wants of the government, which had not enough money to pay even its most necessary running expenses. To make this temporary provision two plans were proposed. The fourth instalment of the surplus—ten millions—was due to the states. As there was really no surplus, but a deficit instead, it was proposed to repeal the deposit law so far as it affected their fourth payment; and treasury notes were to be issued to provide for immediate and pressing needs.

The Whigs frantically attacked the president's proposals, and held him and his party accountable for all the evils of the panic; and in truth it was right enough to hold them so accountable for part; but, after all, the harm was largely due to causes existing throughout the civilized world, and especially to the speculative folly rife among the whole American people. But it is always an easy and a comfortable thing to hold others responsible for what is primarily our own fault.

Benton did not believe, as a matter of principle, in the issue of treasury notes, but supported the bill for that purpose on account of the sore straits the administration was in, and its dire need of assistance from any source. He treated it as a disagreeable but temporary makeshift, only allowable on the ground of the sternest and most grinding necessity, He stated that he supported the issue only because the treasury notes were made out in such a form that they could not become currency; they were merely loan notes. Their chief characteristic was that they bore interest; they were transferable only by indorsement; were payable at a fixed time; were not reissuable, nor of small denominations; and were to be canceled when paid. Such being the case he favored their issue, but expressly stated that he only did so on account of the urgency of the governmental wants; and that he disapproved of any such issue until the ordinary resources of taxes and loans had been tried to the utmost and failed. "I distrust, dislike, and would fain eschew this treasury-note resource; I prefer the direct loans of 1820-21. I could only bring myself to support this present measure when it was urged that there was not time to carry a loan through in its forms; nor even then would I consent to it until every feature of a currency character had been eradicated from the bill."

A sharp struggle took place over the bill brought in by the friends of the administration and advocated by Benton, to repeal the obligation to deposit the fourth instalment of the surplus with the states. This scheme of a distribution, thinly disguised under the name of deposit to soothe the feelings of Calhoun and the other strict constructionist pundits, had worked nothing but mischief from the start; and now that there was no surplus to distribute, it would seem incredible that there should have been opposition to its partial repeal. Yet Webster, Clay, and their followers strenuously opposed even such repeal. It is possible that their motives were honest, but much more probable that they were actuated by partisan hostility to the administration, or that they believed they would increase their own popularity by favoring a plan that seemingly distributed money as a gift among the states. The bill was finally amended so as to make it imperative to pay this fourth instalment in a couple of years; yet it was not then paid, since on the date appointed the national treasury was bankrupt and the states could therefore never get the money,—which was the only satisfactory incident in the whole proceeding. The financial theories of Jackson and Benton were crude and vicious, it is true, but Webster, Clay, and most other public men of the day seem to have held ideas on the subject that were almost, if not quite, as mischievous.

The great financial measures advocated by the administration of Van Buren, and championed with especial zeal by Benton, were those providing for an independent treasury and for hard-money payments; that is, providing that the government should receive nothing but gold and silver for its revenues, and that this gold and silver should be kept by its own officers in real, not constructive, treasuries,—in strong buildings, with special officers to hold the keys. The treasury was to be at Washington, with branches or sub-treasuries at the principal points of collection and disbursement.

These measures, if successful, meant that there would be a total separation of the federal government from all banks; in the political language of the times they became known as those for the divorce of bank and state. Hitherto the local banks chosen by Jackson to receive the deposits had been actively hostile to Biddle's great bank and to its friends; but self-interest now united them all in violent opposition to the new scheme. Webster, Clay, and the Whigs generally fought it bitterly in the Senate; but Calhoun now left his recent allies and joined with Benton in securing its passage. However, it was for the time being defeated in the House of Representatives. Most of the opposition to it was characterized by sheer loud-mouthed demagogy—cries that the government was too aristocratic to accept the money that was thought good enough for the people, and similar claptrap. Benton made a very earnest plea for hard money, and especially denounced the doctrine that it was the government's duty to interfere in any way in private business; for, as usual in times of general distress, a good many people had a vague idea that in some way the government ought to step in and relieve them from the consequences of their own folly.

Meanwhile the banks had been endeavoring to resume specie payment. Those of New York had taken steps in that direction but little more than three months after the suspension. Their weaker Western neighbors, however, were not yet in condition to follow suit; and the great bank at Philadelphia also at first refused to come in with them. But the New York banks persisted in their purpose, resumed payment a year after they had suspended, and eventually the others had to fall into line; the reluctance to do so being of course attributed by Benton to "the factious and wicked machinations" of a "powerful combined political and moneyed confederation"—a shadowy and spectral creation of vivid Jacksonian imaginations, in the existence of which he persisted in believing.

Clay, always active as the friend of the banks, introduced a resolution, nominally to quicken the approach of resumption, but really to help out precisely those weak banks which did not deserve help, making the notes of the resuming banks receivable in payment of all dues to the federal government. This was offered after the banks of New York had resumed, and when all the other solvent banks were on the point of resuming also; so its nominal purpose was already accomplished, as Benton, in a caustic speech, pointed out. He then tore the resolution to shreds, showing that it would be of especial benefit to the insolvent and unsound banks, and would insure a repetition of the worst evils under which the country was already suffering. He made it clear that the proposition practically was to force the government to receive paper promises to pay from banks that were certain to fail, and therefore to force the government in turn to pay out this worthless paper to its honest creditors. Benton's speech was an excellent one, and Clay's resolution was defeated.

All through this bank controversy, and the other controversies relating to it, Benton took the leading part, as mouthpiece of the administration. He heartily supported the suggestion of the president, that a stringent bankrupt law against the banks should be passed. Webster stood out as the principal opponent of this measure, basing his objections mainly upon constitutional grounds; that is, questioning the right, rather than the expediency, of the proposed remedy. Benton answered him at length in a speech showing an immense amount of careful and painstaking study and a wide range of historical reading and legal knowledge; he replied point by point, and more than held his own with his great antagonist. His speech was an exhaustive study of the history and scope of bankruptcy laws against corporations. Benton's capacity for work was at all times immense; he delighted in it for its own sake, and took a most justifiable pride in his wide reading, and especially in his full acquaintance with history, both ancient and modern. He was very fond of illustrating his speeches on American affairs with continual allusions and references to events in foreign countries or in old times, which he considered to be more or less parallel to those he was discussing; and indeed he often dragged in these comparisons when there was no particular need for such a display of his knowledge. He could fairly be called a learned man, for he had studied very many subjects deeply and thoroughly; and though he was too self-conscious and pompous in his utterances not to incur more than the suspicion of pedantry, yet the fact remains that hardly any other man has ever sat in the Senate whose range of information was as wide as his.

He made another powerful and carefully wrought speech in favor of what he called the act to provide for the divorce of bank and state. This bill, as finally drawn, consisted of two distinct parts, one portion making provision for the keeping of the public moneys in an independent treasury, and the other for the hard-money currency, which was all that the government was to accept in payment of revenue dues. This last provision, however, was struck out, and the bill thereby lost the support of Calhoun, who, with Webster, Clay, and the other Whigs, voted against it; but, mainly through Benton's efforts, it passed the Senate, although by a very slender majority. Benton, in his speech, dwelt with especial admiration on the working of the monetary system of France, and held it up as well worthy to be copied by us. Most of the points he made were certainly good ones, although he overestimated the beneficent results that would spring from the adoption of the proposed system, believing that it would put an end for the future to all panics and commercial convulsions. In reality it would have removed only one of the many causes which go to produce the latter, leaving the others free to work as before; the people at large, not the government, were mainly to blame, and even with them it was in some respects their misfortune as much as their fault. Benton's error, however, was natural; like most other men he was unable fully to realize that hardly any phenomenon, even the most simple, can be said to spring from one cause only, and not from a complex and interwoven tissue of causation—and a panic is one of the least simple and most complex of mercantile phenomena. Benton's deep-rooted distrust of and hostility to such banking as then existed in the United States certainly had good grounds for existence.