A Biography of Henry Clay, the Senator from Kentucky / Containing Also, a Complete Report of All His Speeches; Selections From His Private Correspondence; Eulogies in the Senate and House; and a Poem, by George D. Prentice, Esq.

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It is contended, however, that the reduction of wages would be only nominal; that an exclusive specie currency being established, the prices of all commodities would fall; and that the laborer would be able to command as many of the necessaries of life with his low wages, as he can at present.

The great error of senators on the other side is, that they do not sufficiently regard the existing structure of society, the habits and usages which prevail; in short, the actual state of things. All wise legislation should be founded upon the condition of society as it is, and even where reform is necessary, it should be introduced slowly, cautiously, and with a careful and vigilant attention to all consequences. But gentlemen seem disposed to consider themselves at liberty to legislate for a new people, just sprung into existence, and commencing its career—one for which they may, without reference to what they see all around them, speculate and theorize at pleasure. Now if we were such a people, and were deliberating on the question of what was the best medium of circulation to represent the property, and transact the business of the country, it is far from being certain that it would be deemed wisest to adopt an exclusive specie standard. But when we glance at society as it actually exists, with all its relations and ramifications, its engagements, debts, wants, habits, customs, nothing can be more unwise, it seems to me, than to attempt so radical a change as that which is contemplated.

I cannot admit that the laborer, with his low wages, would be in as eligible a situation as he now is; the argument excludes all consideration of his condition, during the transition from the paper, to the specie medium. In the descending process, from an abundant to a scarce circulation, there would be nothing before him but distress and wretchedness; and he would be in the greatest danger of starvation, before the El Dorado of gentlemen was reached. The adjustment of prices to the state of the currency, is not so sudden a work as is imagined. Long after the specie standard should be established, the old prices of many articles would remain; and all foreign productions, which enter into the consumption of the poor man, would continue unaffected by our domestic currency, if it be true, that there would be no alteration in the condition of the laborer, if he would really get as much, in value, in the new state of things as in the old, how is that of the capitalist, engaged in manufactures, to be improved? Would not his situation also remain unaltered? The assumption, that an exclusive hard money circulation is best for the laborer, best for the manufacturer, best for the country, is against all the experience of the world. Beyondall doubt, England is the most prosperous of all the nations of the old world, and England is the greatest paper money country that exists. Her manufactures find a market in every portion of the globe; her operatives and laborers are paid better, and fed better, than any in Europe. Have the manufactures of the hard money countries of the continent, prevailed over those of England, and driven them out of the markets, in fair competition? Far from it. Their policy is to exclude, by prohibitions and heavy duties, the entry of British goods into their ports. England has sought to make treaties with them all, and especially with France, upon the basis of free trade, and France has replied, that her manufactures are too much behind those of England to admit of their being placed upon a footing of equality. Paper money, inflated England, manufactures about two thirds of all the cotton exported from the United States; and her cotton manufacture alone, is probably greater than that of all the rest of Europe.

But, Mr. President, if the banishment from circulation of all bank paper, and the exclusive use of specie in this country were desirable, is it practicable, can it be possibly brought about? I have said that the legislator is bound to have due regard to the wants, wishes, necessities, and condition of the country for which he acts. But a practical American statesman has a further duty to perform; that of attentively considering the distribution of the power of government in this confederacy. Here we have local governments for the respective states, and general government for the whole. The general government has but few, limited, and well defined powers, the states severally possessing all power not denied to them, or delegated by the federal constitution. Whatever difference of opinion might exist, if it were a new question, it cannot now be controverted, that each of the twenty-six state governments has the power to bring into existence as many banks as it pleases. Banks have accordingly been created, and will continue, and must exist, in spite of the general government. The paper of banks will, therefore, remain, as it has been, a part of the general circulation, in defiance of any policy which this government may proclaim. And if one or more of the states were to adopt the hard money policy, there would be others which would find, in the very forbearance of certain members of the confederacy to establish or continue banks, a fresh motive to create and sustain them; for the issues of their banks would run into the states which had them not, and they would thus appropriate to themselves, at the expense of others, all the benefits of banking. I recollect well how banks were originally first introduced into many of the southern and western states. They found themselves exposed to all the inconveniences, without enjoying the benefits, of the banking system; and they were reduced to the necessity of establishing banks, to share the advantages, as well as the disadvantages, of the system.

Banks, bank notes, a convertible paper money, are, therefore, inevitable. There is no escape from them. You may deliver as many homilies as you please, send forth from this capitol as many essays and disquisitions as you think proper, circulate president’s messages denouncing them as widely as you choose, and thunder forth from a party press, as loud and as long as you can, against banks, and they will continue to exist in spite of you. What, then, is it the duty of a wise, practical, federal statesman to do? Since he finds a state of things which is unalterable, to which he must submit, however convinced he may be of the utility of a change, his duty is to accommodate his measures to this immutable state of public affairs. And, if he cannot trust the eight or nine hundred local banks which are dispersed through the country, create a federal bank, amenable to the general government, subject to its inspection and authority, and capable of supplying a general currency worthy of its confidence; make, in short, the government of the whole partake of the genius, and conform to the fixed character, of the party.

Mr. President, I never have believed that the local banks were competent to supply such a general currency, of uniform value, as this people wants, or to perform those financial offices which are necessary to a successful administration of this government. I pronounced them incompetent, at the period of the removal of the deposits; and we foretold the unfortunate state of things that now exist. But the party in power, which now denounce them, proclaimed their entire ability, not only to supply as good, but a better currency, than that which was furnished by the bank of the United States, and to perform all the financial duties which that institution fulfilled. After that party had succeeded in putting down the bank of the United States, and got their system of state banks into full operation, it continued, year after year, to announce to the public that all its expectations had been fully realized.

A bank of the United States established by this government would not only furnish it a currency in which it might safely confide, in all receipts and payments, and execute every financial office, but it would serve as a sentinel; a cement, and a regulator to the state banks. The senator from Pennsylvania has urged that the present bank of the United States of Pennsylvania, has a charter more extensive than that of the late bank of the United States; that it is, in fact, the old bank with a new charter; and that, with all its vast resources and means, it has been not only unable to act as a regulator of the local banks, but was recently the first to set the pernicious example of a suspension of specie payments.

Mr. President, can the distinguished senator be serious in his description of these attributes of the Pennsylvania bank? Surely he must have intended that part of his speech for some othertheatre. In the first place, Pennsylvania, besides sundry other onerous conditions of loans and subscriptions to objects of internal improvements, levied upon the present bank, in the form of bonus, some four or five millions of dollars. Then the general government has withdrawn from it the seven millions of stock which it held in the old bank—a circumstance which I have no doubt has tended to cripple its operations. And it is wholly without the deposits of the government, which the former bank possessed. Instead of being an ally, the general government has been in the relation of an enemy to it. And it has had to encounter all the enmity of a powerful party, within the bosom of the commonwealth. So far from assuming the office of a regulator of the local banks, its late distinguished president, upon whose authority the senator relies for proof of the extent and liberality of its new charter, expressly declared that it had ceased to be a general agent, and had retired within the circle of its state duties. So far from having derived any strength from its connection with the late bank of the United States, there cannot be a doubt that that connection rendered it far less efficient than it would have been, if it had gone into operation with an unencumbered capital, freshly subscribed, of thirty-five millions of dollars.

To guard against all misconception or misrepresentation, I repeat, what I said on a former occasion, that, although I am convinced, thoroughly convinced, that this country cannot get along well without a bank of the United States, I have no thought of proposing such a bank, and have no wish to see it proposed by any other, until it is demanded by a clear and undisputed majority of the people of the United States.

Seeing that a bank of the United States could not be established, two years ago, I expressed my willingness to make an experiment with the state banks, rather than resort to this perilous measure. And now, such are my deep convictions of the fatal tendency of this project of a sub-treasury, that I would greatly prefer the employment of the agency of state banks. But whilst I should entertain hopes of their success, I confess that I should not be without strong apprehensions of their failure. My belief is, that the state banks would be constantly exposed to disorder and derangement, without the coöperation of a bank of the United States; and that our banking system will only be safe and complete, when we shall have both a bank of the United States, and state banks.