Part 113

I have made this motion, sir, said Mr. B., because it allows the greatest latitude of discussion upon the important points which are preliminary to the examination of the details. It tries the principle of the bill, and may save much tedious and useless labor. Should a majority decide in favor of the Bank of the United States, as an honest man I will aid in forming a system best adapted to the state of the country, and most subservient to the purposes of such an institution. The gentleman from Connecticut (Mr. MOSELY) has done justice to my conduct, and the fairness with which the subject has been treated. I have been anxious to present the question fairly, not from any doubt or indecision as to the course I should pursue, but from its magnitude, and the sensibility it has excited. It will be recollected by the committee, when the gentleman from Pennsylvania presented the memorial upon which the Secretary of the Treasury founded his report, on that, as on all subsequent occasions, my opposition was manifested; and I will add that the particular attention which my duty has compelled me to bestow on the bank, has confirmed more strongly former impressions.

The remarks I shall make are intended to show that Congress possesses no power to incorporate a bank; to show its effect on the government, and to satisfy the committee that the exercise of the power, even if possessed, is inexpedient. While, sir, I feel the most ardent desire to consult the convenience of the government and promote the prosperity of the community in general, I have not lost sight of the limits within which I am restrained by the Constitution of the United States and considerations of sound policy. It is my most deliberate conviction that the constitution of the country gives no authority to Congress to incorporate a bank and endow the stockholders with chartered immunities; and even if its dissolution should produce ruin to the merchants, and, what is of equal importance, embarrassment to the government, they would not be paramount to the sacred obligation of supporting the constitution; though I am persuaded the dreadful evils which have been predicted from the annihilation of the bank will soon vanish, and that no material shock will be produced by that cause. The construction which the constitution has received by the various persons who have at different times administered it, has been rigid or liberal according to the confidence in the General or State Governments. The unqualified extent given to its general powers, and the inclusion of incidental powers, as flowing from and belonging to particular enumerated grants, have constituted the essential points of difference among those who have divided upon the principles of the constitution. This has been the case not only in the exercise of authority where the right was questionable, but in cases where the right was undeniable, tending by its operation to increase the weight of the General Government. In giving to the constitution that construction which sound policy requires, and a just regard to the harmony of the States and the perpetuation of their Union dictates, I cannot find any part of it authorizing the exercise of a power which, from its nature, is obnoxious, its tendency alarming, and its influence in the hands of those who manage its concerns irresistible. The power to establish a bank cannot be deduced from the general phrases "to provide for the common defence and general welfare," because they merely announce the object for which the General Government was instituted. The only means by which this object is to be attained are specifically enumerated in the constitution, and if they are not ample, it is a defect which Congress are not competent to supply. I think this inference the stronger, inasmuch as those means were granted to us by those who had acted under the confederation and experienced its defects, and knew precisely to what extent power was requisite to provide for the common defence and general welfare. In relation to this particular subject, the proceedings of the convention itself furnish the plainest evidence, by rejecting the proposition to vest in Congress the right to grant incorporations. I readily admit the motive of deliberative bodies cannot always be known. Various considerations might have operated. They might have supposed the power already vested. But, it is incumbent on those who can place faith in an interpretation so repugnant to the cautious and guarded phraseology of the instrument, to demonstrate it. If the right to incorporate exists, it is a general grant of power, equally applicable to all the objects of incorporation, and cannot be assumed as a means to carry into effect any particular grant of authority. To my mind, it is much more natural to suppose a power to create monopolies had been surrendered, to quiet the fears of those who saw in the constitution the germ which would sooner or later palsy the vitals of the State authority. If the general phrases are not explained in the manner just mentioned, and powers so extensive and important are derived from them, it would be ridiculous to consider the jurisdiction of Congress restricted; they would confer equal authority to establish monopolies in all the various branches of individual industry and commercial enterprise. Sir, I will conclude this part of the subject by reminding you how essential it is, when we are giving an interpretation to the constitution, to which the States are parties, to assume only what clearly belongs to us. Moderation will inspire confidence, selfishness will excite disgust and suspicion.

The parts of the constitution which bear any analogy to this subject, are

1st. Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defence and general welfare, &c.

2d. To borrow money on the credit of the United States.

3d. To regulate commerce with foreign nations, and among the several States, and with Indian tribes. And

4th. To make all laws which shall be necessary and proper to carry the foregoing powers, and all other powers vested by the constitution in the General Government, into effect.

It will not be denied that, if the establishment of a bank comes within the meaning of the power to lay and collect taxes, to pay the debts of the United States, and to regulate commerce, or is necessary and proper to carry the foregoing powers into effect, it would be a fair subject for legislation by Congress. But can any one pretend that a bank would be a mode contemplated by the constitution to lay and collect taxes on the people for the purpose of raising revenue? Would it comport with that wise principle of uniformity, and those guarded restrictions against unequal burdens on the people, which constitute the most valuable safeguard to the citizen? To understand these terms we must give them a meaning which has been affixed by their usual import. When we speak of the power to lay taxes, we understand by it a demand of money from the community, regulated by fixed and equitable principles, indiscriminate as to persons, and the species of property taxed. To suppose that every law which imposed burdens or brought money into the Treasury was constitutional, would destroy our equal system of government, and substitute a capricious despotism. It would revive the exploded doctrine of free gifts, benevolences, and that shameful train of extortions practised by the old governments of Europe. Does it fall within the power to pay the debts of the United States? This clause relates entirely to the application of the funds after they have been accumulated; it is in conformity with that article which pledges the public faith for debts which had been contracted, as well as those which might be created in pursuance of the authority to borrow money upon the faith of the United States. If the power to incorporate a bank grew out of the obligation to pay the debts of the United States, its charter should be so worded as to cease whenever they were extinguished; and it would be no longer for Congress to fix a definite period for its expiration. If the right of incorporation was ever meant to be given, it would most naturally follow from the regulation of commerce; yet, no one has contended Congress could create insurance companies within the States. Those who contend the bank is constitutional, consider it as necessary and proper in collecting the revenue. That it may be an useful instrument, I do not deny. It forms depositories convenient to the government; but, you should recollect, depositories equally safe and convenient can be procured without being purchased at the expense of exorbitant and invidious privileges to a particular class in the community. I apprehend the constitution means something extremely different when it empowers the General Government to collect taxes; it relates exclusively to the authority thus given to Congress of employing compulsory process in coercing the payment of taxes; it enables Congress to create, within the jurisdiction of the States, officers of the revenue, and, through them, to exercise over the property of the citizens a concurrent jurisdiction, from which they otherwise would be precluded, and from which they had been precluded before the adoption of the constitution; it enables them to impose penalties and forfeitures, and to inflict punishment for resistance to their authority. But, sir, admit for a moment the bank may be formed to collect the revenue, ought it not to be exclusively used for that object? Whence the power to make it an instrument of commerce? Why invest it with a capital immense in amount, and sovereign in its control over the external and internal commerce of the country? Sir, I must again call your attention to the limited nature of our Government; we must administer it as we find it, and not as we think it ought to be. Under this view of the subject, so long as I understand the right to "lay taxes" to consist in drawing supplies from the people for public purposes, and not to tax one portion of the community for the benefit of another, and "to collect them," the right to enforce payment, I cannot construe them to authorize the establishment of a bank. Sir, a bank has been improperly considered a means of executing some power exclusively given to Congress. The nature of incorporations is so clearly a distinct class of political power, that, before they can be converted into means incidental to an object without the jurisdiction of the General Government, they must be shown to be absolutely necessary. Permit me to ask, how has it been ascertained that a bank is necessary to the operations of the Government? Has the experiment been tried? Upon a question involving a breach of the constitution, it would be safer to be guided by experience than conjecture.

Sir, I am well aware that I can add nothing new upon the constitutional points. The subject was more thoroughly examined in 1791, and more ably elucidated than any other since the adoption of the Government. The celebrated speech of Mr. MADISON, to which I ascribe my conviction, has been recently presented to us in the newspapers, and gentlemen must be familiar with it. I cannot give additional weight to the arguments, but I thought it proper to call the attention of the committee to that part of the subject by the remarks I have made.

I said, sir, it must be shown that the bank is necessary to the operations of the Government--without its aid our fiscal concerns cannot be managed. So far from subscribing to the necessity of the bank, I believe the revenue would be equally safe in the State banks, and could be distributed with inconsiderable difficulty. The revenue received in most of the States is nearly equal to the expenditure within them, and when a deficiency occurred in any one, it could be supplied by arrangements with the different banks, by transportation, or inland bills of exchange, in the manner that the public engagements are fulfilled abroad. I will venture to assert the Secretary of the Treasury will find no difficulty in contracting with individuals and corporate institutions, upon the most ample security, to transfer the public revenue upon terms equally advantageous to the United States. Among the several States commercial intercourse is great, and daily increasing; the constant traffic which the different portions of the country maintain with one another, will give facility to the operations of the Government, and obviate the obstacles which are anticipated; the very commerce which enables the Treasury to remit with ease immense sums to every part of Europe is the result of this interchange among the States, and insures equal facility at home. Where, then, is the necessity for this bank? The accommodation of the bank to the Government in times of emergency, and the use of its resources to support public credit, have been urged as motives for its establishment; how far such considerations weaken constitutional objections, it is needless to state. If, sir, the bank becomes a source of supply to the Government to an adequate extent, it ceases to be one to the merchants. It therefore cannot answer in both capacities. The same necessity which throws the Government upon the charity of the banks renders it incapable of discharging the obligation, and while the funds of the institution are locked up in the Government, its commercial functions must cease. The relief which sudden and temporary embarrassments require, can, at all times, be administered by the State banks, and, therefore, supersedes the necessity of aid from this bank. Whenever, by disasters, the ordinary sources of supply are exhausted, or the unavoidable objects of expenditure exceed the revenue, a more copious and permanent aliment will be found in the wealth and capital of the citizens than by loans from banks. Instead of diverting the active and productive capital from useful channels, the sluggish and inert mass will be drawn forth in its aid, to support public credit and cherish private enterprise. But, sir, is it prudent to rely upon an institution that may refuse you assistance? What will be the influence of such an institution on the Government, and the country at large? It cannot escape your recollection that the establishment of the Bank of the United States was the origin of a system which assumed as its basis the enlargement of the national jurisdiction. Whether the principles of expediency to which it owes its birth be regarded, or the overweening influence it established over the moneyed institutions and merchants of the States, the charge, to say the least, is plausible. The close and intimate connection between the Government and bank--the dependence of the former for loans, and the latter for public deposits, have given the Executive branch its full share of influence and odium--shows incontestably it was created to augment the power of the General Government, and the Executive in particular. Yes, sir, it was the commencement of those political animosities which have poisoned the sources of social intercourse; it was the origin of that doctrine of constructive power which abrogates the constitution and nullifies the restrictions imposed upon Congress. So long as it exists, the body politic will experience the agitations and convulsive throes of well-grounded jealousy in the States.

Sir, in the administration of this Government two things alone are necessary to insure its durability. You must first avoid every measure which will produce uneasiness among the States, or, second, that will extend the jurisdiction of the United States Government to subjects purely local. I do not mean that the rightful authority of Congress is to be abandoned for fear of giving offence, but, whenever called on to take a step which will produce uneasiness, you should be perfectly satisfied the letter and spirit of the constitution bear you out. Do not gentlemen perceive the tendency of this measure to involve us with the States upon delicate points? Has not the United States' Bank produced serious alarm? Will not the alarm be increased by its continuance at this time? Yes, sir, some of the States have already taxed this institution, others have waited under the expectation we shall render a collision unnecessary. Suppose the charter renewed, and the stockholders should be taxed in such a manner as to destroy, virtually, the privileges you have guarantied to them. Are you to leave them unprotected, or will you draw the sword in their behalf? While you have time, avoid a situation not less perilous than the most serious foreign war. Since the establishment of the bank, the States have created banks--their people have accumulated capital, and they will not tamely witness the perpetuation of an institution whose strength can at any moment overthrow whatever State bank they may mark for destruction. However paradoxical it may appear, I consider the General Government strengthened by narrowing its jurisdiction; it will produce disunion whenever they interfere with local concerns. The habits, local interest, and passions of this country vary, and no one is a competent judge of what will suit the feelings of the State out of which he lives. But, sir, there are general principles in which our feelings and interests are identified; there are subjects upon which we may safely act, and trust to the co-operation of every man and State in the Union. Does the bank affect the people locally? The answer is obvious: it not only undertakes to fix the amount of capital, but interferes with the rights of property most essentially--it may change the fundamental principles of State law as to the liability of property for debts, and the mode of recovering them. Let me caution you against the renewal of the charter; it is pregnant with the most baneful consequences to the tranquillity of the country. Is it not better to sacrifice this golden calf upon the altar of concord, restore confidence and harmony among individuals as well as States, and to reunite the lovers of the constitution?

In the report of the Secretary of the Treasury, the convenience of obtaining loans from the bank is mentioned as an inducement to establish a National Bank. To me the abuse of this convenience is more dreaded than any other evil which will follow from the measure. Where have you seen a National Bank, connected with the Government, which has not ultimately ruined the circulating medium of the nation? It is a notorious fact that money has depreciated seriously, from the unlimited circulation of paper, and if the Government should be compelled, by necessity, to use the funds of the bank, they must permit the increased circulation of its paper, although its money capital remains stationary. In this situation the Government must tolerate an operation which will increase the evil of which we complain. The example of England is a salutary monition to us, and we ought to profit from it. In that country there was a time when the stability of the bank was a national phrase, "As good as the Bank of England." How is it now? The funds of the bank have been borrowed by the Government--its paper circulation increased, and Parliament has been compelled to make it a tender for the payment of all contracts. Who, sir, can estimate the complicated mischiefs of a depreciated paper currency, without specie for its redemption? Should we be involved in war, or our property seized abroad, nothing can present universal bankruptcy--one wide-spread ruin will pervade the continent. At this time the country is inundated with paper bottomed upon the whole floating and real property of the community: should an alarm exist, can these funds be converted into money to redeem its credit? Certainly not. Will it not be prudent to diminish the extent of this evil by putting down this bank which is the fountain from which the whole system flows? It is of little importance, as it regards the internal trade of a country, what constitutes the representation of property. Paper, iron, or any thing else, which passes current, will answer every purpose of barter and trade; but, in its commerce abroad, it is indispensable that the circulating medium should be equally valuable and readily acknowledged among all commercial nations; otherwise, all the operations of commerce, carried on with money, will be abandoned or prosecuted under disadvantages equal to the difference in the value of the currency at home and abroad. In countries actively engaged in business, this branch of trade is not only great in amount, but by far the most profitable. How unwise, therefore, not only to substitute for the precious metals paper currency, whose value is confined to the United States, but to augment the quantity until it depreciates even among ourselves.

THURSDAY, January 17.

Bank of the United States.

The House resolved itself into a Committee of the Whole on the bill for renewing the charter of the Bank of the United States--the motion for striking out the first section still under consideration.

Mr. FISK.--Mr. Chairman: I regret that we are called upon to vote for or against striking out the first section of this bill, at this time. I could have wished that, upon a bill of so much interest and importance, we could have proceeded to have filled the blanks, and made such amendments as would have obviated many objections which may be urged against it in its present form. I am not prepared to give my vote in favor of a renewal of the charter of the Bank of the United States, either upon the terms upon which it was originally granted, or in the manner contemplated by this bill; yet, upon conditions less objectionable, I should feel myself bound to vote in favor of a renewal. But the question presented upon this motion, is not upon what terms this charter shall be renewed, but whether it shall be renewed upon any terms, subject to any conditions Congress may impose.

In this view, I consider it the most important subject upon which this Congress will be required to act. It is determining a question which is connected with our finances, with the circulating medium of the country, and with our agricultural, commercial, and manufacturing interests; and, as such, it cannot but be interesting to every class of our citizens.

The interests and prosperity of the United States are not only intimately, but inseparably, connected with trade. The market of the farmer depends greatly upon the merchant and the shipper. And the price and demand of every article of produce are in a great degree regulated by the difficulties or facilities of payment. Let the difficulty of paying be increased, and the price of produce immediately falls; for the demand for exportation becomes very limited, the markets are overstocked, and prices reduced. Any sudden check to our commerce, whether produced by our own municipal regulations, or the outrages of foreign powers, checks the market and the price of produce; so that not only the merchants, but the farmers feel its effects. I scarcely need recur to the history of the times when trade was principally suspended in this country, to show how severely the suspension operated upon every class of our citizens, and in every part of the country. This period in our political annals will be long remembered. So great was the distress in some States, and agricultural States, too, that their Legislatures deemed it necessary, for the protection of the debtor from the power of his creditor, to stay the administration of justice, and prohibit by statute the issuing of an execution for the collection of any debt.

This proves the connection which subsists between the two great agricultural and commercial interests of this country. Agriculture, commerce, and manufactures constitute the source of our wealth, revenue, and prosperity. To foster and cherish the principles upon which rest our existing hopes and future prospects, can never be a question of doubtful policy with a wise and patriotic legislature.

We have seen that commerce is essential to our interests; but commerce will not flourish without credit. It never has prospered independent of credit. As credit is essential to trade, so is punctuality to support credit. Look at the business of any commercial people, and see how much of it is done upon credit; and see the integrity and fidelity with which punctuality is maintained in order to support their credit.

For several centuries past, banks have been the successful medium through which credit has not only been preserved, but great wealth acquired. This assertion is warranted by the history of these institutions, and of the countries where they have been patronized. The first bank established in Europe, was at Genoa, in 1407--four hundred and four years ago; this was soon followed by one at Venice.

The Bank of Amsterdam was established in 1609, and shortly after those of Hamburg and Rotterdam; and the Bank of England in 1694; the Royal Bank at Paris in 1718; the Bank of North America in 1784--a memorable period in our history--and the Bank of the United States in 1791.

All these different institutions show, that enlightened legislators have entertained but one opinion upon this subject both in Europe and America for the last four hundred years. They have seen and acknowledged their utility. Banks have long since been considered not only essentially useful in the transaction of commercial concerns, but as highly necessary to aid the fiscal operations of Government. And a more unanswerable argument cannot be urged in favor of their general utility than their uniform success; to this may be added the prosperity of the people and the countries where banks have been supported. Their immediate advantages are, a convenient circulating medium; the safe depository they afford for cash and funds. And they serve to keep the standard of money steady and correct; to insure punctuality; to preserve credit; to inspire confidence, and to promote a spirit of industry and enterprise. They are not, as many have supposed, in their nature hostile to Government and dangerous to liberty. They rather form a barrier to tyranny and oppression. Their principal business is to lend money at the common rate of interest, and thus prevent usury. The owners of banks are generally rich men, who have not only their personal liberty, but a large property to risk, by sedition, treason, and rebellion. It is their interest to resist oppression. We need scarcely point to the Continent of Europe for proof of the fact, when we assert, that trade and banks cannot flourish where despotism prevails. Despotic power generally ruins trade and banks, but no instance occurs in history where banks, not under the control of Government, have ruined a State. A bank owned by Government, and under its command, would be an engine dangerous to the people. But when owned by individuals, neither the people nor the Government have any thing to fear from it. It is then dependent on both for its business, prosperity, and usefulness.

With the evidence which both history and experience offer to our reflection, we cannot doubt the utility of banks, nor deny but that they have been beneficial to us. And we are justified in the conclusion, that, under proper regulations, they may subserve the best interests of the people of the United States. They are now in successful operation in almost every State in the Union, and that they have been useful, the present prosperous state of the country abundantly proves. We enjoy as perfect security for life, liberty, and property, as any people under any Government ever did. These are the great objects of a good Government. And we may triumphantly ask, where is the nation or people that enjoy these with more freedom and safety than the American people? A parallel for our liberty and prosperity, for the last twenty years, is not to be found in the history of man. Our wealth, population, and resources, have increased beyond what any one would have calculated or imagined, and beyond what strangers and foreigners now believe. Industry, wealth, and contentment, pervade every quarter of our country, and poverty and oppression are unknown to our citizens.

In 1791, the year this bank was incorporated, our exports amounted to about eighteen millions of dollars; and in 1804, they had increased to about seventy-six millions, gaining in thirteen years fifty-eight millions; and our tonnage in about the same proportion.

Much of this prosperity is to be attributed to the active capital which has excited industry, and a spirit of enterprise among us, and the activity of this capital has been in a great degree created and promoted by the Bank of the United States. Its operations have been extensive in all our trading towns. It has aided in loans and discounts, and assisted in the collection, safe-keeping, and transmission of our revenues. It has been the depository of our Treasury, and is now become incorporated with the administration of the fiscal department of our Government. The connection which it has formed with almost every branch of business in the country, is not slight and trifling, and so easily to be severed as some seem to believe. Its operations are deeply interwoven with the dealings and concerns of all the men of business in the United States.

With a capital of ten millions, it has furnished accommodations of fifteen millions a year. This has been employed principally in trade; in making prompt and cash payments to our farmers for their produce. This, again, has furnished to our citizens a ready and profitable market for every article of produce. These high profits of a good market have gone into the hands of the farmer, to cultivate, improve, and enrich the country. And travel through any State in the Union, and their effects may be readily seen, affording a prospect, consoling and elevating to the philanthropist and the patriot. The land is highly cultivated, good buildings, turnpike roads, bridges, and other expensive improvement, indicate the wealth of our citizens, and the prosperity of the country. Money has been freely circulated, trade has been active, produce high, and our country has been improved by these unexampled advantages to a degree far beyond what the most sanguine calculations, twenty years ago, could have anticipated. And yet, sir, we are gravely told that this bank has nearly ruined the country; that it is threatening our best interests with destruction. As well might gentlemen tell us that total darkness prevails at noon-day, or that the sun, in his meridian splendor, affords neither light nor heat to any part of this globe.

The principal portion of the trade and business of the United States has been conducted by a paper medium; metallic has scarcely been seen. The amount of this circulating medium is, say fifty millions. Now what is proposed by denying a renewal of the United States' Bank charter? That this bank shall close its concerns, and of course stop all its accommodations. This must necessarily check and change at least one-third of the circulating medium of the country. It will undeniably require $24,000,000 to be directed to one operation, and for a time to one point--for the capital is $10,000,000; this is to be collected to divide among the stockholders. There are $19,000,000 due to the bank; this must be collected. This will occasion a demand for this amount from other sources; it must be paid. And the $5,000,000 in the bank makes the sum of $24,000,000, which must be suddenly called in. The effect this will have upon the various interests in the country can neither be described nor conceived. It must inevitably give a general and heavy shock to all paper credit; this credit, so much and profitably in operation, must receive a severe, if not a mortal wound. And what substitute have we for this when it shall be destroyed? Silver and gold coin cannot be relied on. There is not from the best estimate an amount to exceed $10,000,000 specie in all our cities and trading towns, and this will be collected by this bank. The price of all stocks, and every kind of produce and species of property must suffer a great depression, for a scarcity of money enhances its value, and consequently depresses the value of every other species of property. That this sudden, if not total change in our system, must occasion great embarrassment, produce failures, disappointments, and distress, among our citizens, is certain.