The bank having been formed, it may not be improper for me to take some view of its beginning and its operation. At first its operations were confined to Philadelphia; it extended its branches some time afterwards to Boston, New York, Baltimore and Charleston. Wherever it extended its influence, dissension commenced; wherever it placed its foot it became absolutely necessary for the States to erect another bank to counterbalance its pecuniary and political influence. In Philadelphia it began to oppose certain people and turn down their paper. The State of Pennsylvania, in defence of its own citizens, created the Bank of Pennsylvania. Here was a check upon its pecuniary and political operations. I believe I am not mistaken when I say that soon after it commenced in Boston a new bank was established there, from what cause I know not. In Baltimore, sir, it soon taught us a lesson, and we met the lesson as other States had done. Charleston and New York acted in a similar way. Operating as the bank did on the politics of the country before its effects were neutralized by competition, man being man, place him where you will, those concerned in the direction of the bank felt power and exercised it. When the British treaty was pending before Congress, the president and directors (as I am informed) themselves carried about a memorial to Congress in its favor, with what view and with what effect may easily be conceived. In Baltimore (until we were able to check them by other banks) its political influence was great. Prior to the great struggle between the parties, in 1798, they did permit one democrat to be within the walls of the sanctuary (as a director), a gentleman of as much respectability and independence of character, as any one of the direction. He was, however, (immediately after daring to give his vote in favor of a democratic candidate,) put out, and since that time no man of democratic principles has been permitted to enter its walls as a director. Men must shut their eyes to the fact of this being a party institution, when they see that no democrat has been admitted to the direction of the bank but in this city and New York, where the collector was admitted a director for the purpose of protecting the public money at the instance (it is said) of the Secretary of the Treasury. Can we shut our eyes so as not to see that men hostile to the democratic party, and of course to the success of the administration of the Government, are not the most proper persons to have charge of its pecuniary concerns? I would have been very unwilling to have gone into this part of the subject; but when the gentleman from Kentucky, scarcely able to restrain his rage, cried out, party! party! I was bound to show that it was not those with whom I act who had any agency in pressing the subject of party into the present discussion.
The gentleman from Kentucky reprobates the system of petty mischievous intrigue for the purpose of carrying measures through Congress. No man, sir, despises or contemns such conduct more than I do. But on whose side has this intrigue been? It is necessary to put the saddle on the proper horse. Have we gone to insurance companies or corporations of one kind or another? Have we intrigued with the people to induce them to take sides with us? No, sir, we have been tranquil; we wanted no aid of that kind. Have we sent persons here to intrigue with members, or a deputy to remain here the whole of the last and present session, to explain to Congress the effect of putting down the bank, and threaten them with destruction and ruin to the United States if they passed the measure? No, sir, we have had no one here. Have we stirred up the people into town meetings to aid us by memorials? No such thing, sir. Have we called meetings and induced honest mechanics to come here to influence Congress by idle fears, impressed upon them by those who are interested, to tell a tale that shall answer our purposes? No, sir, we have pursued no such course.
Respectable merchants, I observe, form a part of the bank deputies—for what? To represent the late fall of the price of flour as a consequence of the danger of the bank charter not being renewed, and thereby to alarm the minds of members. I am sorry that men of such respectable character did permit themselves to come here on such an errand. I think I have seen in the papers, that one of the manufacturers (now here) on being asked to sign a petition for the renewal of the charter for twenty years, said he would rather cut off his right hand than sign it; he wished only a renewal for a short time to give the bank an opportunity to wind up its affairs. If this statement be true, and of its truth I have no cause to doubt, it shows the depth of that intrigue which sent this gentleman here, through the instrumentality of his excellent character, to get a renewal of the charter for a period which he never contemplated. These are intrigues for which men ought to blush, and from which, I thank God, we are exempt. At the time these deputies arrived, there were three mechanics of Baltimore here, of character inferior to none, and of wealth inferior to few in Philadelphia, and who would have given a different view of the subject, if they had been asked to appear before the committee. I thought it unnecessary—I wanted no assistance of that kind—no species of intrigue. They did, however, declare, sir, that granting this charter would be a death-blow to the politics of the State of Maryland. They did believe the renewal would be injurious to them, for neither they nor many of the manufacturers of Baltimore had received much advantage from the branch bank; they had their own banks from which they generally received accommodation. Another species of intrigue is carried on, to wit, by pamphleteering. The press is groaning with pamphlets—for what? To teach the minds of members on this question, the necessity of renewal and probability of destruction to the nation, if their demands are not complied with. Our tables are covered with pamphlets of that tendency. Has there been any thing of the kind on our part?
There is scarcely an evil which has not been attributed to the embargo, and which is not now, with as little justice, attributed to the expected non-renewal of the bank charter. Great failures have lately taken place at New York; bills of exchange on London, to a large amount, have returned protested, and the drawers are not able to pay the holders, and to the present critical situation of the bank some gentlemen attribute the distress brought upon those who have suffered by these failures and protests. But, Mr. President, what is the real cause of those failures? They are confined principally to New York, and may be attributed to the following causes: It is natural for men born in Great Britain to entertain predilections favorable to a commerce with that country, their connections, as well commercial as of family, are there; their credit is there; and, from those causes, the house which has failed, and carried so many others with it in its fall, has probably directed the principal part of its commerce to England; they have, no doubt, shipped cotton and tobacco, the trade in which being in a great measure confined to Great Britain, the natural consequence has been, that the markets of England were completely glutted; tobacco, except the very fine Virginia, scarcely paid the charges of freight and commission, and the loss on cotton must have been nearly fifty per cent. The consignees, under those circumstances, refused to pay the bills drawn upon shipments of those articles. The bills returned protested, and ruin to the American shipper has been the consequence. At any other time the English merchants would have accepted the bills, and held the cargoes for a better market; but, at that time, ruin stared every man in the face. No man in London knew who to trust, and very few would enter into engagements which they saw any difficulty in meeting. No censure ought to be attached to the American shipper, for, by the usage of trade between the United States and Europe, the American merchant is entitled to draw for two-thirds the amount of his cargo on transmitting invoices and bills of lading with orders for insurance. Other causes have existed to cause the present distress in New York and elsewhere, to wit, the seizure, detention and confiscation of property in Denmark, Prussia, and France, of ships and cargoes to the amount of many millions, on the proceeds of which cargoes merchants calculated to meet their engagements at home, and to meet their bills drawn on London. For, sir, the merchants who make large shipments to the continent, order the greatest proportion of their proceeds to be remitted from thence to London, and, on the expectation thereof, draw bills on their friends there. Disappointment has been the consequence of such seizures and losses; protests of such bills and ruin has followed. But, Mr. President, we might with as much propriety attribute the late great failures in England and on the continent to the expected non-renewal of the bank charter, as those which have happened in New York, or the present distress of the merchants of the United States. The returns of the bills protested, to so large an amount, of course destroyed the merchant's credit at bank; he failed, and, by his fall, has caused the ruin of others. When a great house fails, it is like a game of nine pins; knock one down and it will probably carry with it four or five others.
We have been told, Mr. President, in case the charter should not be renewed, that we shall find in future great difficulty in obtaining loans. What loans, I ask, have Government ever received from the Bank of the United States? I recollect, when I first entered Congress, that Government were indebted for loans made from the bank, but I also recollect that the bank complained of her loans as an inconvenience, and that Congress took the earliest measure in their power to pay them off, and have, since that period, made no new loan from the bank until that made payable the first of January last. I will not inquire whether even that loan was necessary, but I will venture to promise, sir, and will give any security that may be required, that the State banks will give a similar accommodation, to wit: If the Secretary of the Treasury will deposit with the State banks two millions five hundred thousand dollars of the public money, (the amount of the late loan,) they will lend Government to the same amount, and thus do as the Bank of the United States has done, lend you your own money, and very kindly receive from you an interest of six per cent. therefor. We are told that the bank has lately lessened the discounts of individuals ten per cent., and that the merchants are thereby greatly distressed. Is that a fact? If it is, and great distress has ensued therefrom, what will be the distress of the merchants if the bill now before you shall pass; and if, agreeably to its provisions, Congress should (at any time hereafter) call on the bank for the loan of four millions promised by the bill? If, sir, a lessening of their discounts one-tenth per cent. creates distress, what will be the consequence, when, by a loan of four millions, called for from the bank, the bank shall be compelled to lessen the discounts four-tenths?
But, sir, the promise to lend four millions from a bank of ten millions is idle; it is worse, it is deception on the face of it. The loan, if made, would not be from the bank but from the merchants, whose discounts would thereby be lessened, and whose ruin would follow.
We are told that, if the charter of this bank be not renewed, and the funds of the United States be deposited in the State banks, it will be extremely unsafe, because it is said we can have no control over them. And, I wish to know, sir, what control we have over the Bank of the United States? None, but the same as we may have over the State banks. We cannot check the operations of the Bank of the United States, and if they obtain this charter, they will know that they can have their charter renewed whenever they please; so that, the fear of a non-renewal of their charter will have no operation on them in future. You will have a much greater control over the State banks, because you are under no obligation to put money in them, and you can change them whenever you think proper; the danger of losing the public deposits will always be a sufficient control over their conduct. The security of the State banks is doubted, however; and we are told, very gravely, indeed, that there is much more security in the mother bank, and her nine children, than in ten independent banks. This I must deny. I should, as a merchant, place more confidence in ten independent houses than in one with nine branches.
Monday, February 18.
Bank of the United States.
Mr. Brent said he had not the vanity to believe, after the subject had been so fully discussed, that he should be able to shed any new light on it; but having been instructed, by the Legislature of the State which he had the honor to represent, to vote on constitutional principles against the bill under consideration, and as he was reduced to the painful necessity of going counter to those instructions, it seemed to him to be indispensably necessary that he should submit to the Senate the grounds on which he acted. It is (said he) a most painful situation in which I stand in relation to the Legislature of Virginia, in being compelled to vote in opposition to their will, more especially as it is a prevalent opinion with many whose opinions are entitled to great respect, that instructions are obligatory on a Senator. This question is one which has never been settled, or even fully deliberated on. Instructions, when heretofore given to Senators, have generally been in accordance with the sentiments of the Senators, and only given to add the greater weight to their opinions. If called upon definitely to pronounce with regard to instructions on questions of expediency, I might be under some difficulty as to what course to pursue; because, although there is no clause in the constitution to that effect, I am under a strong impression that, according to the principles of our Government, there is much reason to believe that the respective State Legislatures should have such a right; but on a constitutional question (whatever may be the right of the State Legislatures in other instances) the right of instruction may be denied, in my judgment—that is, so far as to be imperative on the Senator. To give a vote in such a manner as in his estimation to inflict a vital wound on the constitution, is more than the Legislature of Virginia, or any other State Legislature in the Union, can compel me or any other Senator in the United States to do. The resolution of Virginia is bottomed, not on the ground of expediency, but on the principle that the constitution prohibited Congress from granting the bank charter in the first instance; that it now prohibited it, and therefore, because it was unconstitutional, the Legislature have instructed their Senators in Congress to oppose it. Now, sir, although I shall not immediately and directly violate the constitution by voting against the bank, yet, if I vote against it when I believe it constitutional and necessary, it must be known that I vote in conformity to the instructions of the Virginia Legislature; and so far as my vote goes, it will warrant and sanction that interpretation of the constitution which the Legislature of Virginia has given—which interpretation, in conscience, I believe to be erroneous. Therefore, though in ordinary cases the instructions of a Legislature may be imperative, (I will not determine that question,) I conclude that they cannot be so when they require of a Senator to commit either a positive or implied breach of the constitution, or to vote in such a manner as to warrant such interpretation of the constitution as will deprive it of an essential attribute. Virginia has the physical force, but has she a moral right to violate the Constitution of the United States? If she has it not, can she give it to her Legislature? If her Legislature possess it not, can they give it to a Senator? Can the Legislature give me a moral right to violate the Constitution of the United States, which I have sworn to support? I believe not, sir; and that, in the situation in which I stand, their instructions ought to have no operation on the vote I am to give on the subject under consideration.