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H. OF R.)
Bank of the United States.
(21st Cong. 1st Sess.
have resumed specie payments. Their bills, in the re- bave done it, unaided by the Bank of the United States, spective spheres of their circulation, are of equal value without producing a degree of distress incomparably with gold and silver ; wbile for all the operations of greater than has been actually experienced. They will commerce, beyond that sphere, the bills or the checks of conclude their remarks on this branch of the subject by the Bank of the United States, are even more valuable the obvious reflection, that, if Congress, at the close of than specie. And even in the very few instances in which the war, bad left it to the States to restore the disordered the paper of State banks is depreciated, those banks are currency, this important function of sovereignty would vinding up their concerns; and it may be safely said, that have been left with those from which the Constitution has no citizen of the Union is under the necessity of taking de expressly taken it, and by whom it could not be beneficipreciated paper, because a sound currency cannot be ob- ally or effectually exercised. But another idea of consitained. North Carolina is believed to be the only State derable plausibility, is not without its advocates. It is where paper of the local banks is irredeemable in specie, seid that this Government, by making the resumption and consequently depreciated. Even there, the deprecia- and continuance of specie payments, the condition upon tion is only one or two per cert, and what is more import- which the State banks should receive the Government deant, the paper of the Bank of the United States can be ob-posites, might bave restored the currency to a state of unitained by all those who desire it, and bave an equivalent fornity. Without stopping to give their reasons for to give for it.
believing that specie payments could not bave been reThe committee are aware, that the opinion is enter- stored in this way, and that, even if they could, a onitained by some, that the local banks would, at some time form carrency of general credit, throughout the Union, or other, either voluntarily or by the coercion of the would not bave been provided, the committee will proState Legislatures, have resumed specie payments. In ceed to give their reasons for thinking that such a conthe very nature of things, this would seem to be an im- uexion between the Federal Government and the State possibility: It must be remembered, that no banks ever banks would be exceedingly dangerous to the purity of made such large dividends as were realized by the local both. While there is a Natiopal Bank, bound by its institutions, during the suspension of specie payments. charter to perform certain stipulated duties, and entitled A rich and abundant harvest of profit was opened to to receive the Government deposites as a compensation them, which the resumption of specie payments must in- fixed by the law creating the charter, and only to be forevitably blast. While permitted to give their own notes, feited by the failure to perform those duties, there is bearing no interest, and not redeemable in specie, in ex- nothing in the connexion at all inconsistent with the inchange for better notes, bearing interest, it is obvious dependence of the bank, and the purity of the Governthat the more paper they issued, the higher would be their ment. The country has a deep interest that the bank profits. The most powerful motive that can operate should maintain specie payments, and the Government upon moneyed corporations, would have existed, to prevent an additional interest that it should keep the public funds the State banks from putting an evd to the very state of safely, and transfer them, free of expense, wherever they things, from which their excessive profits proceeded. may be wanted. The Government, therefore, has no Their very nature must bave been changed, therefore, power over the bank, but the salutary power of enforcing before they could have been induced to cooperate, voluu- a compliance with the terms of its charter. Every thing tarily, in the restoration of the currency. It is quite as is fixed by the law, and nothing left to arbitrary discreimprobable that the State Legislatures would bave com- tion. It is true that the Secretary of the Treasury, with pelled the banks to do their duty. It has already been the sanction of Congress, would have the power to prevent stated, that the tendency of a depreciated currency to the bank froin using its power upjustly and oppressively, attract importations to the points of greatest depreciation, and to punish any attempt, on the part of the Directors, and to lighten the relative burdens of federal taxation, to bring the pecuniary influence of the institution to bear would paturally produce, among the States, a rivalry in upon the politics of the country, by withdrawing the the business of excessive bank 188ues. But there remains Government deposites from the offending branches. But to be stated, a cause of more general operation, which this power would not be lightly exercised by the Treasury, would have prevented the interposition of the State Legis- as its exercise would necessarily be subjected to be re lature to correct those issues.
viewed by Congress. It is, in its nature, & salutary The banks were, directly and indirectly, the creditors corrective, creating no undue dependence on the part of of the wbole community, and the resumption of specie the bank. payments necessarily involved a general curtailment of But the state of things would be widely different, if discounts, and withdrawal of credit, which would pro- there was no National Bank, and it was left to the discreduce a general and distressing pressure upon the entire tion of the Secretary of the Treasury, to select the local class of debtors. These constituted the largest portion banks in which the Government deposites should be made. of the population of all the States where specie pay. All the State banks would, in that case, be competitors ments were suspended, and bank issues excessive. Those, for the favor of the Treasury; and no one, who will duly therefore, who controlled public opinion in the States, consider the nature of this sort of patronage, can fail to where the depreciation of the local paper was greatest, perceive, that, in the hands of an ambitious man, pot were interested in the perpetuation of the evil. Deep possessed of perfect purity and unbending integrity, it and deleterious, therefore, as the disease evidently was would be imminently dangerous to the public liberty.in many of the States, their Legislatures could not have The State banks would enter the lists of political contro. been expected to apply a remedy, so painful as the com- versy with a view to obtain this patronage ; and very pulsion of specie, payments would have been, without the little sagacity is required to foresee, that, if there should aid of the Bank of the U. States. And here it is worthy ever happen to be an administration disposed to use its of special remark, that, wbile the Bank bas compelled the patronage to perpetuate its power, the public funds local banks to resume specie payments, it bas most ma- would be put in jeopardy by being deposited in banks terially contributed, by its direct aid and liberal arrange uoworthy of confidence, and the most extensive corrupments, to enable them to do so, and that with the least tion brought to bear upon the elections throughout the possible embarrassment to themselves and distress to the Union. A state of things more adverse to the purity of community. If the State Legislatures had been ever so the Government-a power more liable to be abused-can anxious to compel the banks to resume specie payments, scarcely be imagined. If five millions of dollars were and the banks ever so willing to make the effort, the appually placed in the hands of the Secretary of the Treacommittee are decidedly of opinion, that they could not sury, to be distributed at his discretion, for the purposes 21st Cong, 1st Sess.]
Bank of the United States.
(H. OF R.
of internal improvement, it would not invest him with a decision of Congress, the committee consider it so far more daugerous and corruptiog power.
involved in the matter referred to them, as to render it In connection with this branch of the subject, the com- their duty to present some considerations bearing on that mittee will briefly examine the grounds of the complaint, question, in addition to what they bave said on the genersometimes made against the Bank of the United States. al expediency of maintaining such an institution. If a Na It is alleged that this bank, availing itself of the Govern- tional Bank, similar to the present, be a necessary and ment deposites, consisting in some places principally of proper agent for the accomplishment of the great pur. local paper, makes beavy and oppressive draughts on the poses heretofore indicated, the only remaining question local banks for specie, and thus compels them to curtail would seem to be, wherber the charter. of the present their discounts, to the great injury of the community. In stockbolders should be renewed, or a new set of stockthe first place, it is to be remarked, that one of the high- holders incorporated. est duties of the bank, the great object for which it was In considering this question, Congress will, of course, established—was to prevent the excessive issues of local be governed in some degree, by the terms op wbich the paper; and this duty can only be performed, by epf rcing present stockholders will agree to accept a renewal of upou the State banks the payment of specie for any excess their charter. But, as the committee bave satisfactory in their issues. But the committee are induced to believe reasons for believing that terms eminently advantageous that this complaint is principally owing, so far as it now to the Government can be obtained, they will proceed to exists, to the fact
, that the operations of the Federal Trea- some other inquiries. What, then, would be the effect of sury are mistaken for the operations of the Bank, because refusing to renew the present charter ? And, in the the Bank is the agent by whom these operations are per- first place, what are the inducements for pursuing that formed. This instituțion receives the Government de course ? posites in the paper of the local banks, certainly in no It is sometimes alleged that the present stockholders spirit of hostility to those banks. On the contrary, it are large capitalists, and, as the stock of the bauk is some tends to give them credit, and is designed to have that twenty per cent. above par, that a renewal of the charter effect. But the Bank of the United States is not only would be equivalent to a grant to them of twenty per bound to pay in specie, or its own bills, what it receives cept. upon their capital. It is true that a small proporfor the Government in local paper, but to transfer the tion of the capital of the company belongs to very wealthy funds to any part of the Union, where they may be re- men. Something more than two millions of that owned quired for disbursement. Let it be assumed, that the in the United States, belongs to persons holding upwards Government collects anpually, at the Custom house in of one hundred thousand dollars each. It is also true, Charleston, oue million of dollars in local bank-potes, and that foreigoers own seven millions, or one fifth of the disburses in South Carolina only one buodred thousand, it capital. But, on the other hand, it is to be remarked would result from this, that the Government would have that the Government, in trust for the people of the United nide bundred thousaad dollars of local bauk paper de States, holds seven millions ; that persons owning less posited in the Charleston branch, which the bank' vould than five thousand dollars each, hold four millious six be bound by its charter, and for the national benefit, to buodred and eighty-two thousand, and that persons owntransfer, perbaps to Washington or Norfolk. As this pa. ing between five and ten thousand dollars each, hold opper would not answer the purposes of the Government wards of three millions. It is also worthy of remark, at those places, the Bank would be, of course compelled that a very considerable portion of the stock-very nearly to provide specie, or bills that will command specie at six millions, is held by trustees and guardians, for the use those places. It is obvious, then, that it is the inequality of females and orphan cbildren, andcharita ble and other in the collection and disbursement of the revenue, that institutions. Of the twenty eight millions of the stock produces the evil in question. If all the revenue collected which is owned by individuals, only three millions four in Charleston were disbursed in the State, no draughts hundred and fifty-three thousand is now beld by the oriwould be made upon the local banks for specie. The gipal subscribers. All the rest has been purchased at Bank of the United States, so far from being justly ob the market prices--a large portion of it. probably, when noxious to any complaint on this score, bas greatly miti- those prices were bigher than at present. Most of the gated the action of the Treasury upon the local banks, by investments made by wills, and deeds, and decrees in means of the liberal arrangements which its large capital equity, for the use of females and minors, are believed to and numerous branches have enabled it to make with have been made when the stock was greatly above par. them. The degree in which that institution has reduced From this brief analysis, it will appear that there is nothe rate of exchange, may be fairly assumed as that in thing in the character or situation of the stockholders, which it bas mitigated the action of the Treasury upon which should make it desirable to deprive them of the adthe State banks. If, for example, there existed no Na- vantage which they bave fairly gained, by an application tional Bank, and the deposites of the revenue collected in of their capital to purposes bigbly beneficial, as the comCharleston were made in one of the local banks, what mittee have attempied to show, to the Goveroment and would be the effect of transferring, annually, nine bundred people of the United States. If foreigners own seven thousand dollars to Wasbington or Norfolk? The local millions of the stock of the bank, our own government banks, baving no branches at either of those places, in- owns as much ; if wealthy men own more than two milstead of transmitting draughts, as is now generally done, lions, men in moderate circumstances, own between sevwould be compelled to transmit specie. The bank in en and eight millions ; and widows, orphans, and instituwhich the Government deposites were made, would con tions devoted to charitable and other purposes, own nearsequently be under the necessity of demanding specie ly six millions. from all the other banks, in a mapper, and to an extent, But the objection that the stock is owned by men of much more oppressive than any thing that can be imputed large capital would apply with equal, if not greater force, to the Bank of fthe United States.- If, to avoid these to any bank that could be organized. In the very nature specie draughts, the local banks should purchase bills on of things, men who have large surplus capitals are the Washington or Norfolk, they would probably cost five or principal subscribers at the first organization of a bank. six per cent. even in a tolerable state of the currency, Farmers and planters, merchants and manufacturers, ha. which would be a loss to the banks almost to the full ex- ving an active employment for their capitals
, do not tent of the premium.
choose to be the first adventurers in a bank project. AeAlthough the expediency of renewing the charter of cordingly, when the present bank went into operation, it the preront bank-is not a question now submitted for the is believed that most of the capital was owned by large
H. OF R.]
Bank of the United States.
[21st Cong. 1st Sess.
capitalists, and under a much more unequal distribution ease in the national currency. The nation, after having than exists at present. The large amount of stock pow suffered the almost convulsive agonies of this necessary rebeld in trust for females and minors, has been principally, medy, is now restored to perfect health.
In this state of is not entirely, purchased since the bank went into opera. things, it will be for Congress to decide whether it is the tion; and
the same remark is generally applicable to the part of wisdom to expose the country to a degree of sufferstock iu the bands of small bolders. It is only when the ing almost equal to that which it has already suffered, for character of a bank is fully established, and when its stock the purpose of bringing back that very derangement of the assumes a steady value, that these descriptions of persons currency which has been remedied by a progress as necesmake investments in it.
sary as it was distressing. It is morally certain, therefore, that, if another distinct If the Bank of the United States were destroyed, and institu'ion were created, on the expiration of the present the local institutions left without its restraining influence, charter, there would be a much greater portion of its capi- the currency would
almost certainly relapse into a state tal subscribed by men of large fortunes, than is pow own- of unsoundness. The very pressure which the present ed by persons of this description, of the stock of the Bank, in winding up its concerns, would make upon the United States Bank. Indeed, it might be confidently pre local institutions, would com pel them either to curtail dicted, that the large capitalists wbo now hold stock in their discounts when most needed, or to suspend specie that bank, would, from their local position and other ad- payınents. It is not difficult to predict which of these va tuges, be the first to forestall the subscriptions to the alternatives they would adopt, under the circumstances new bank, while the small stockholders, scattered over the in wbich they would be placed. The imperious wants country, would be probably excluded, and the females and of a suffering community would call for discounts, iu lanminors, and others interested in trust investments made guage which could not be disregarded. The public necesby decrees in equity, would be almost necessarily exclud- sities would demand, and public opinion would sanction, ed, as the sanction of a court could, scarcely be obtained, the suspension, or at least an evasion, of specie pay: after the passage of the new act of incorporation, in time ments. to authorize a subscription.
But, even if this desperate resort could be avoided in To destroy the existing bank, therefore, after it has a period of peace and general prosperity, peither reason rendered such signal services to the country, merely with nor experience will permit us to doubt, that a state of a view to incorporate another, would be an act rather of war would speedily bring about all the evils which so facruelty and caprice, than of justice and wisdum, as it re- tally affected the credit of the Government and the nagards the present stockholders. It is no light matter to tional currency, during the late war with Great Britain. depreciate the property of individuals, honestly obtained, We should be agaiy driven to the same miserable round and usefully employed, to the extent of five millions six of financial expedients, which, in little more than two hundred thousand dollars, and the property of the govern- years, brought a wealthy community almost to the very ment, to the extent of one million four hundred thou: briuk of a declared national bankruptoy, and placed the sand dollars, purely for the sake of change. It would Government completely at the mercy of speculating stockindicate a fondness for experiment, which a wise Govern- jobbers. ment will not indulge upon slight considerations.
The Committee feel warranted, by the past experience But the great injury which would result from the re of the country, in expressing it as their deliberate opinfusal of Congress to renew the charter of the present ion, that, in a period of war, the financial resources of Bank, would, beyond all question, be that which would the country could not be drawn into efficient operation, result to the commuuity at large. It would be difficult to without the aid of a national bank, and that the local estimate the extent of the distress which would naturally banks would certainly resort to a suspension of specie and necessarily result from the sudden withdrawal of payments. The maxim is eminently true in modern times, more than fortý millions of credit, wbich the community that money is the sinew of military power. Io this view now enjoys from the Bank. But this would not be the full of the subject, it does appear to the committee, that no extent of the operation. The Bank of the United States, one of the institutions of the country, not excepting the in winding up its concerns, would not oply withdraw its army or navy, is of more vital importance than a national own paper from circulation, and call in its debts, but bank. It has this decided advantage over the army and would unavoidably make such beavy draughts on the lo- navy: while they are of scarcely any value except in war, cal institutions for specie, as very greatly to curtail their the bank is not less useful than either of them in war, and discounts. The pressure upon the active, industrious, and is also eminently useful in peace. It has another advanenterprising classes, who depend most on the facilities of tage, still greater. If, like the army or wavy, it should cost bank credit, would be treniendous. A vast amount of the nation millions anuually to sustain it, the expediency property would change hands at half its value, passing of the expenditure might be doubted. But, when it actuunder the hammer, from the merchants, manufacturers, ally saves to the Government and to the country, as the and farmers, to the large moneyed capitalists, who al committee have beretofore attempted to show, more milways stand ready to avail themselves of the pecuniary lions annually than are expended in supporting both the embarrassments of the community. The large stockhold- army and navy, it would seem that, if there was any ers of the present Bauk, the very persons whose present one measure of national policy, upon which all the political lawful gains it would be the object of some to cut off, parties of the country should be brought to unite, by the having a large surplus money capital thrown upon their impressive lessons of experience, it is that of maintaiving hands, would be the very first to speculate upon the dis- a national bank. tresses of the community, and build up princely fortunes It is due to the persons, who, for the last ten years, upon the ruins of the industrious and active classes. On have been concerned in the adıninistration of the bank, the other hand, the females and minors, and persons in to state that they have performed the delicate and diffimoderate circumstances, who hold stock in the institution, cult trust committed to them, in such a manner as, at the would sustain an injury, in no degree mitigated by the same time, to accomplish the great national eods for general distress of the community.
which it was establishell
, and promote the permanent inA very grave and solemn question will be presented to terest of the stockholders, with the least practicable pregCongress, when they come to decide upon the expedi- sure upon the local banks. As far as the commi tee are ency of renewing the charter of the present Bauk. That enabled to form an opinion, from careful inquiry. the institution has succeeded in carrying the country through bank has been liberal and indulgent in its dealings with the painful process necessary to cure a deep seated dis- these institutions, and, with scarcely an exception, now
21st Cong. 1st Sess.)
Bank of the United States.
(H. OF R. H. or
stands in the most amicable relation to them. Some of place of circulation, and where the bill would never
But thuse institutions have borne the most disinterested and come but at a great expense, and for the sole purpose of unequivocal testimony in favor of the bank.
being presented for payment, would neither gire credit decke It is but strict justice also to remark, that the discretion to the notes, nor operate as an effective check upon exof the mother bank appears to have abstained, with cessive issues. Whatever credit such notes might have, scrupulous care, from bringing the power and influence at a distance from the place of issue, would not be. be. of the bank to bear upon political questions, and to have cause they were redeemable at the pleasure of the bolder selected, for the direction of the various branches, buei- —for such would not be the fact; but principally because ness men in no way connected with party politics. The of the ultimate responsibility of the Government, and of committee advert to this part of the conduct of the di- their being receivable in payment of all dues to the rectors, not only with a view to its commendation, but Treasury. for the purpose of expressing their strong and decided They would rest, therefore, upon almost precisely the conviction that the usefulness and stability of such an in- same basis of credit as the paper money of our Revolustitution will materially depend upon a steady and undevi- tion, the assignats of Revolutionary France, and the Treaating adherence to the policy of excluding party politics Bury notes of the late war. These were receivable in disand political partisans from all participation in its ma- charge of debts due to the Treasury, and the Government bagement. It is gratifyng to conclude this branch of the was, of course, ultimately responsible for their payment; subject, by stating, that the affairs of the present back, yet the two former depreciated almost to nothing, and the under the able; efficient, and faithful guidance of its two latter, though bearing interest, sunk to 20 per cent below last Presidents and their associates, have been brought par. But the potes of a central Government Bank, withfrom a state of great embarrassment into a condition of out branches, would be subject to depreciation, from a the highest prosperity. Having succeeded in restoring cause which constitutes a conclusive objection to such an the paper of the local banks to a sound state, its re- institution. There would be nothing to limit excessive sources are now such as to justify the directors in extend issues but the discretion and prudence of the Governing the issue and circulation of its paper so as to satisfy ment or of the direction. Human wisdom has never the wants of the community, both as it regards bank ac- devised any adequate security against the excessive issues, commodations and a circulating medium. Upon the and consequently the depreciation of bank paper, but its Boundest principles of banking, the very ample resources actual, and easy, and prompt convertibility into specie, of the institutiou would justify the directors in granting ac at the pleasure of the holder. Experience has shown commodations to a much greater extent than they have that, where the paper of a bank is, by any means, yet done ; and though they have increased the circula- babitually circulated at places remote from the point tion of their paper from four and a half to fourteen mil. where it is issued, and not connected with it by a regulione, since January, 1823, they are ready and willing to lar commercial intercourse, there will not exist that easy increase it still further, by discounting bills of exchange and prompt convertibility, which is so essential to the and other business paper. It is believed that the dis- credit of bank paper. When bank bills are confined to counts and issues of the institution are now actually li. their appropriate sphere of circulation, a redundant issue mited by the want of applications resting upon these, the is certainly and immediately followed by a run upon the only substantial and safe foundations of bank credit, and bank for specie. This timely admonition is as useful to circulation.
the bank as it is to the community ; for it enables · III. Having said thus much on the constitutionality the directors to avoid, with unfailing certaivty, an excess and expediency of an incorporated National Bank, the equally injurious to both, and which no human sagacity only question which remains to be examined by the com- could anticipate or prevent, by calculation merely. Whatmittee, is, the expediency of establishing “å National ever, therefore, is a system of bank circulation preBank founded upon the credit of the Government and its vents the reflux of redundant issues, necessarily derevenues."
stroys the only adequate security against these injurious It is presumed to have been the intention of the Presi- excesses. dent, in suggesting the inquiry as to a bank founded But a Government Bank without branches, would be upon the credit and revenues of the Goveroment, to be obnoxious to another objection, which could not be ob understood as having allusion to a bank of discount and viated. Its loans would be confined to the District of deposite. Such a bank, it is taken for grnoted. would Columbia ; or, if extended to the various parts of the have branches established in various parts of the Union, Union-to say nothing of the inconvenience to which it similar to those now established by the Bank of the would expose those at a distance who obtained accommo United States, and co-extensive with thein. The great dations—they would be unavoidably granted without any object of furnishing a national currency could not be ac- knowledge of the circumstances of the persons upon coinplished, with an approach to uniformity, without the whose credit the Government would depend for re-payagency of such branches ; and another object, second ment. It would, in fact, be, for all useful purposes, & only in importance to the one just stated, the exten. mere District Bank. siou of the commercial facilities of bank accommoda- These views of the subject have brought the committee
& tions to the different parts of the Union, could not be at to the conclusion, that, if a Government Bank should be all effected withont such agency. If there should be sim established, it would have at least as many branches as ply a great central bank established at the Seat of Go- the Bank of the United States, and probably a much veroment, without branches to connect its operations greater number. Few administrations would have the with the various points of the commerce of the Union, firmness to resist an application to establish a branch, the promise to pay specie for its notes whenever pre- coming from any quarter of the Union, however injudi. sented, would be almost purely nominal. Of what conse cious ihe location might be, upon correct principles of quence would it be to a merchant or planter of Louisi commerce and banking. ana, or a manufacturer or farmer of Maine, that he could The Bank of the United States now employs five hunobtain specie for bills of the National Bank, on presenting dred agents in the various parts of the Union where its them at the City of Washington—a place wholly uncon offices are established. From this fact, some idea may nected cither with Louisiana or Maine by any sort of be formed of the very great addition which may be made commercial intercourse, and where, consequently, these to the patronage of the Executive Government by the bills would never come in the regular course of trade ? establishment of such a bank as the one under consideA promise to pay specie at a place 80 remote from the ration.
H. OF R.]
[21st Cong. 1st Sess. But the patronage resulting from the appointment—thes on the part of the directors, of the two-fold power of apannual appointment of these agents, great as it would propriating the public revenue in the most dangerous of doubtless be, would be insignificant and harmless, when all forms—discretionary loans—and of pledging the recompared with that which would result from the dispen- sponsibility of the Government to an unlimited extent,
sation of bank accommodations to the standing amount of for the payment of the debts at the same time created ! at least fifty millions of dollars! The mind almost in- against it. These are among the highest functions of le
stinctively shrinks from the contemplation of an idea so gislative power, and have been expressly and exclusively ominous to the purity of the Government and the liberties vested in Congress. Unless, therefore, it be assumed, of the people. No government, of which the committee that Congress may rightfully transfer the powers with have any knowledge, except, perhaps, the despotism of which it is invested to these bank directors, it will be dif
Russia, was ever invested with a patronage at once so ficult to find any warrant, either in the letter or spirit of Ti prodigious in its influence and so dangerous in its char- the Constitution, for the creation of this tremendous enmai acter. In the most desperate financial extremities, no gine of pecuniary influence. It may, indeed, be doubted
other European government has ever ventured upon whether all the branches of the legislative authority unitan experiment so perilous, If the whole patronage of ed, have any constitutional power to lend the public rethe English monarchy were concentrated in the hands of venue, either to individuals, corporations, or States, with. the American Executive, it may be well doubted whether out reference to the objects to which it shall be applied. the public liberty would be so much endangered by it as But, whatever may be the power of Congress on this subit would by this vast pecuniary machine, which would ject, it appears to the committee to be inexpedient, in place in the hands of every administration fifty millions of every view of the question, that the Government should dollars, as a fund for rewarding political partisans. be converted into a great money lender. There is no
Without assuming that a corrupt use would be made of species of trade in which it would be wise for the Governthis new species of government patronage, a very slight ment to embark; but of all the variety of pursuits known
acquaintance with the practice of all political parties, to human enterprise, that of lending money by the GoSo whatever may be their professions, will be sufficient tovernment to the citizens of the country, would be fraught
satisfy any reflecting mind that all the evil consequences with the most pernicious consequences, of corruption will flow from its exercise. Have not our In the first place, it is a business to which, in the very political contests too frequently degenerated into a selfish nature of things, do Government is adapted, and, least of scramble for the offices of the country? Are there not all, a popular Government. There is no employment of those who sincerely and honestly believe that these offices capital that requires a more vigilant and skilful superare legitimate objects of political warfare, and the right- intendence. Nothing, but the ever active motive of indi. ful reward of the victorious party! And disinterested vidual interest can supply the watchfulness necessary to and) patriotic as the great body of every political party is secure a banking institution against the grossest frauds admitted to be, the fact is no less true than it is lament- and impositions. In pecuniary transactions, few men are able, that the most devoted and active partisans are very to be found who will serve others, in cases involving the often mere soldiers of fortune, who watch the political exercise of discretionary power, with the same fidelity signs, and enlist, at the eleventh hour, under the banners that they would serve themselves; and when we conof the party most likely to prove successful. Such being sider the strong motives, both of private friendship and more or less, the composition of all political parties, what political attachment, which would operate on the direcwould be the probable use made of fifty millions of bank tors of a Government bank, to bestow its favors without patronage, by a political party which conscientiously held impartiality or prudence, it requires but little sagacity to
the doctrine that all the offices in the gift of the Executive foresee that enormous losses would be annually sustained F
should be divided among the partisans of a successful po- by the insolvencies of the Government debtors. litical leader 1 Would not the same principle be even All Governments have found it expedient to place the more applicable to bank loans ; and would not the Trea public Treasury under the guardianship of a high and sury of the United States, under the sanctifying influence confidential officer, aided in the enforcement of a rigid of party delusion and party infatuation, be literally plun- responsibility, by a system of checks and counterchecks, dered, by mercenary retainers, bankrupts in fortune, and operating upon all the subordinate officers concerned in ndventurers in politics !
collecting and disbursing the public revenue. Such is Even if the administration should be ever so much dis- our own system. No discretion is vested in the chief posed to restrain the abuse of this patronage, it would be officer of the Treasury, much less in those that are subutterly impracticable to exercise any efficient control over ordinate, in the appropriation of a single dollar of the the great number of bank directors who would be scatter- publie money. "No money can be drawn from the Treaed over the Union, and who, upon all the known princi- sury but in consequence of appropriations made by law." ples of human nature, it may be confidently predicted, How far these wise and provident safeguards, and this would principally consist of busy and officious political constitutional barrier, would be prostrated by placing partisans.
not only the publie revenue, but the public credit, at Such would be the depositaries—acting, not under the the disposal of some hundreds of bank directors in public eye, but under the protecting mystery of a sort of various parts of the Union, is a very grave question for concealment and secrecy deemed indispensable in banking the consideration of the House. outgo operations—to whom not only the whole Treasury of the Our own experience has demonstrated the great danUnion would be confided, to be squandered, perhaps in ger of having large masses of the community indebted to profligate favoritism, but the tremendous power of put- the Government. It was a deep conviction of this dan ting the whole property of the nation under mortgage, for ger that induced Congress to abolish the system of credit the redemption of the bills issued at their discretion. To sales in the disposition of the public lands. Congress say nothing of the utter insecurity of the public revenues has been compelled to yield to the pressing importuniunder such a system, a new species of legislative power, ties of the purchasers of these lands, by granting them unknown to the Constitution, would be committed to these not only repeated indulgencies, but by remitting some irresponsible bank directors, of which no human sagacity millions of the debt. What, then, would be the situation can predict the consequences.
of the Government, with a debt of fifty millions diffused A just analysis of the operation of granting loans by throughout the country, and due to it from the most acthis Government bank, in exchange for the notes of pri- tive, enterprising, and influential classes of the commuvate individuals, will show that it involves the exercise, I nity? Nothing that has not happened can be more cer