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SENATE.]

On the Currency.

[21ST CONG. 1ST SESS.

specie; that for bank notes of Baltimore, 2 per cent.
were paid; for those of Philadelphia, 6 to 7
per cent.
for those of New York, 15 to 16 per cent.; and for those
of Boston, 20 to 22 per cent.; ruinous inequalities, which
have now happily disappeared.

3d. The soundness of the currency may be further illustrated by the present condition of the foreign exchanges.

der any circumstances, does the paper, from the remotest branches, vary beyond a quarter of one per cent. in its actual exchange for silver. Here then, is a currency as safe as silver; more convenient, and more valuable than silver, which, through the whole Western and Southern and interior parts of the Union, is eagerly sought in exchange for silver; which, in those sections, often bears a premium paid in silver; which is throughout the Union equal to silver in payment to the Government, and pay- Exchange on England is, at the present moment, more ments to individuals in business; and with which, when- than 1 per cent, under par; that is, more than 1 per cent. ever silver is needed in any part of the country, will com- in favor of the United States. This being the real fact, mand it, without the charge of the slightest fraction of a disguised by the common forms of quoting exchange on per centage. By means of this currency, funds are trans England at between 8 and 9 per cent. premium. mitted at an expense less than in any other country. In It would lead the committee too far from its present no other country can a merchant do what every citizen of purpose to explain, that the original estimate of the the United States can do-deposit, for instance, his sil- American dollar, as being worth four shillings and six ver at St. Louis, or Nashville, or New Orleans, and re- pence, and that, therefore, the English pound sterling is ceive notes, which he can carry with him 1,000 or 1,500 worth $4 44, is wholly erroneous, and occasions a conmiles, to the Atlantic cities, and receive for them an equi- stant misapprehension of the real state of our intercourse valent amount of silver, without any expense whatever; with Great Britain. The Spanish dollar has not, for a and in no possible event, an expense beyond a quarter of century, been worth four and sixpence: the American one per cent. If, however, a citizen does not wish to in-dollar never was; and whatever artificial value we may cur the anxiety of carrying these notes with him, or to run assign to our coins, is wholly unavailing to them in the the hazard of the mail, he may, instead of them, receive a crucibles of London or Paris. According to the latest draft, payable to himself or his agent aloue, so as to en-accounts from London, at the close of December last, sure the receipt of an equal amount, at an expense of not the Spanish dollar, instead of being worth four shillings one-half, and often not one-fourth, of the actual cost of car and sixpence, or 54 pence, was worth only 49 pence; rying the silver. The owner of funds, for instance, at St. the American dollar at least one fourth per cent. less; so Louis or Nashville, can transfer them to Philadelphia for that, to produce one hundred times four and sixpence, one-half per cent.; from New Orleans, generally without it would be necessary to send to England, not 100 dolany charge at all-at most, one-half per cent.; from Mo-lars, but 109 6 Spanish Dollars, or 109 25 of the United bile, from par to one-half per cent.; from Savannah, to States dollar. If to this be added the expenses and one-half per cent.; and from Charleston, at from par to one charges of sending the money and converting it into quarter per cent. English gold, it will cost 111; so that 111 is, at this moThis seems to present a state of currency approaching ment the real par of exchange between the United States as near to perfection as could be desired: for here is a and England. If, therefore, a bill at sight can be procurrency issued at twenty four different parts of the Union, cured for less than this sum, or a bill at sixty days for one obtained by any citizen who has money or credit. When per cent. less, say 110 per cent., it is cheaper than sendin his possession, it is equivalent to silver in all his dealing silver; that is to say: he who has silver to send to ings with all the 9000 agents of the government, through- England can purchase a bill on London for a greater out the Union. In all his dealings with the interior, it is amount than he would get if he shipped the silver itself, better than silver; in all his dealings with the commercial and of course exchange would be in favor of the United cities, equal to silver; and if, for any purpose, he desires States against England, Now, such bills can be bought the silver with which he bought it, it is at his disposal, at a less rate, by more than one per cent. in every city in almost universally, without any diminution, and never the United States. more than a diminution of one quarter per cent. It is not easy to imagine, it is scarcely necessary to desire, any currency better than this.

The fact is conclusive as to the state of the currency. If the bank notes of the country were not equal to specie, specie would be at a premium, which it no where is It is not among its least advantages, that it bears a pro-at present. If the currency were unsound, more must per relation to the real business and exchanges of the be paid of that currency in order to produce an equal country; being issued only to those whose credit entitles amount of coin in another country, where these bank them to it, increasing with the wants of the active opera-notes do not circulate. But if, as is the case at present, tions of society, and diminishing, as these subside, into comparative inactivity; while it is the radical vice of all Government paper to be issued without regard to the business of the community, and to be governed wholly by considerations of convenience to the Government.

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the bank notes are convertible into specie; if you can buy with bank notes as much as you can buy with silver; and if, in the transactions of the country abroad, the merchants, who, if the notes were not equal to coin, would go to the bank and ship the coin, can pay as much debt in foreign countries with the notes as by sending the coin; there seems nothing wanting to complete the evidence of the soundness and uniformity of the currency.

After escaping so recently from the degradation of depreciated paper currency, the committee would abstain from every thing which might, however remotely revive it. The period is not remote when, in the language of the late Secretary of the Treasury, the country On the whole, the committee are of opinion that the was oppressed by a "currency without any basis of coin, present state of the currency is safe for the community, or other effective check, and of no value, as a medium and eminently useful to the government; that, for some of remittance or exchange, beyond the jurisdiction of years past, it has been improving by the infusion into the the State whence it had been issued-a currency that not circulating medium of a larger portion of coin, and the unfrequently imposed upon the Treasury the necessity substitution of the paper of more solvent banks in lieu of meeting, by extravagant premiums, the mere act of of those of inferior credit; and that, if left to the protransferring the revenue, collecting at one point, to de-gress of existing laws and institutions, the partial inconfray unavoidable expense at another." It is still within veniences, which still remain, of the paper currency of the recollection of the Senate, when, at the seat of Go-the last war, will be wholly and insensibly remedied. vernment itself, specie could only be had at 20 or 22 per Under these circumstances, they deem it prudent to abcent. in exchange for the bank paper promising to pay stain from all legislation; to abide by the practical good

21ST CONG. 1ST SESS.]

On the Currency.

which the country enjoys, and to put nothing to hazard by doubtful experiments.

The committee submit, for the information of the Senate, certain questions propounded to the President of the Bank of the United States, together with his answers thereto, and a document furnished by that officer, showing the rates of exchange at which drafts are drawn by the Bank of the United States and its offices of discount and deposit; and ask to be discharged from the further consideration of the subject.

Questions submitted to the President of the Bank of the United States, with his answers.

Question 1. When the Bank went into operation, was not Philadelphia paper ten per cent. worse than Boston, and that much better than Baltimore?

Answer. Philadelphia paper was 17 per cent. worse than Boston-9 to 9 worse than New York paper-4 better than Baltimore.

[SENATE

Q. 8. When the debt is annually paid off to foreigners, do they remit in specie or bills of exchange? Do you supply the means in either way!

A. When foreigners are paid off, a part is remitted in other stocks, a part goes in bills, a considerable portion of which are bills of the bank. Specie is never resorted to unless the bill market is so high as to make that mode of remittance cheaper.

Q. 9. Since you commenced the purchase and sale of bills of exchange, has the rate varied; if so, to what extent!

the effect of preventing the great fluctuations to which A. The operation of the Bank in exchanges has had they were previously liable.

Q. 10. What is the reason that exchange on England continues above what was formerly considered the part that is, the dollar value at 4s. 6d. sterling? Is it that the intrinsic value of the dollar has been found to be less than 48. 6d. If so, what is that intrinsic value

A. The reason is, that we chose to call our dollar 48. Q2. Were not the State Banks indebted to the Gov-6d. when it never has been worth four and six pence, and ernment in large sums, which they could not have paid in of course, when it goes abroad, it is estimated, not by the sound currency? If so, to what amount? And did not the name we give it, but according to its real value. the Bank in many instances assume those debts, and pay them in sound currency, (if so, to what amount?) and indulge those Banks until it was convenient for them to pay and did not the Bank lose money by such indulgence?

A. In the years 1817 and 1818, the Government transferred to the Bank at Philadelphia, from the state institu. tions, $7,472,419 87, which was cashed, and $3,336,691 67 of special deposite, to be collected by the bank, making $10,809,111 54 The loss sustained by the bank, I cannot estimate. I should willingly compromise for a loss of only $200,000.

Q. 3. Has the bank at any time oppressed any of the State banks!

A. Never. There are very few banks which might not have been destroyed by an exertion of the powers of the bank. None have ever been injured. Many have been saved. And more have been, and are constantly relieved, when it is found that they are solvent, but are suffering under temporary difficulty.

Q. 4. When a State bank becomes indebted to the bank to an improper extent, what course do you pursue? Do you let them go beyond a certain amount, and what is that amouut?

A. The great object is to keep the State Banks within proper limits; to make them shape their business according to their means. For this purpose they are called upon to settle; never forced to pay specie, if it can be avoided, but payment is taken in their bills of exchange, or suffered to lie occasionally until the bank can turn round; no amount of debt is fixed, because the principle we wish to establish is, that every bank should always be ready to provide for its notes.

Q. 5. If you give drafts on any of the branches, or from one branch on another, or on the mother bank, what is the commission charged?

A. The charge for drafts is less than the transportation of specie. I send a detailed statement on this point. Q. 6. Do you, and at every branch, pay specie on demand? Has there ever been a refusal ? A. Never.

Q7. Can you state whether spécie is more or less abundant in the United States at present, than at any former period!

A. At the present moment I think specie is more abundant than usual. It comes in as usual. And the state of the exchanges with Europe is such, that it is cheaper to buy bills than to ship coin. The bank had, on the first instant, $7,608,000, which is more than it has had for nine years past.j

HOUSE OF REPRESENTATIVES.
APRIL 13, 1830.

BANK OF THE UNITED STATES.
Mr. McDUFFIE, from the Committee of Ways and
Means, to which the subject had been referred, made the
following Report:

The Committee of Ways and Means, to whom was re ferred so much of the Message of the President as relates to the Bank of the United States, beg leave to report:

That they have bestowed upon the subject all the attention demanded by its intrinsic importance, and now respectfully submit the result of their deliberations to the consideration of the House. There are a few subjects, having reference to the policy of an established government so vitally connected with the health of the body politic, or in which the pecuniary interests of society are so extensively and deeply involved. No one of the attributes of sovereignty carries with it a more solemn responsibility, or calls in requisition a higher degree of wisdom, than the power of regulating the common currency, and thus fixing the general standard of value for a great commercial community, composed of confederated States.

Such being, in the opinion of the Committee, the high and delicate trust exclusively committed to Congress by the Federal Constitution, they have proceeded to dis charge the duty assigned to them with a corresponding sense of its magnitude and difficulty.

The most simple and obvious analysis of the subject, as it is presented by the message of the President, exhibits the following questions for the decision of the National Legislature:

I. Has Congress the constitutional power to incorporate a bank, such as that of the United States !

II. Is it expedient to establish and maintain such an institution?

III. Is it expedient to establish "a National Bank, founded upon the credit of the Government and its reve

nues ?"

1. If the concurrence of all the departments of the Government, at different periods of our history, under every administration, and during the ascendancy of both the great political parties, into which the country was divided, soon after the adoption of the present Constitu tion, shall be regarded as having the authority ascribed to such sanctions by the common consent of all well re gulated communities, the constitutional power of Congress to incorporate a bank may be assumed as a postu

H. OF R.]

Bank of the United States.

[21ST CONG. 1ST SESS.

already regarded in the light of a public enemy. When, to these circumstances we add, that the stock of the Bank was principally held by British subjects, and Americans of the unpopular party, the House will readily perceive how great were the national and party prejudices, which must have been arrayed against the proposition to renew its charter. It was stated by Mr. Clay, in a speech delivered in the Senate, that seven-tenths of the stock belonged to British subjects, and that certain English noblemen, and a late Lord Chancellor, were among the very largest of the stock-holders. With all these difficulties to encounter, the proposition for renewing the charter was lost only by the casting vote of the President of the Senate, and by a majority of a single vote in the House of Representatives.

late no longer open to controversy. In little more than People to view these leaders as the apologists of a nation, two years after the Government went into operation, and at a period when most of the distinguished members of the Federal Convention, were either in the Executive or Legislative councils, the act, incorporating the first bank of the United States, passed both branches of Congress by large majorities, and received the deliber ate sanction of President Washington, who had then recently presided over the deliberations of the Convention. The constitutional power of Congress to pass the act of incorporation was thoroughly investigated, both in the Executive Cabinet and in Congress, under circumstances, in all respects, propitious to a dispassionate decision. There was, at that time, no organization of political parties, and the question was, therefore, decided by those, who, from their knowledge and experience, were peculiarly qualified to decide correctly; and who In less than three years after the expiration of the were entirely free from the influence of that party ex charter-the war with Great Britain having taken place citement and prejudice, which would justly impair, in in the mean time-the circulating medium became so disthe estimation of posterity, the authority of a legislative ordered, the public finances so deranged, and the public interpretation of the constitutional charter. No persons credit so impaired, that the enlightened patriot, Mr. Dallas, can be more competent to give a just construction to who then presided over the Treasury Department, with the Constitution, than those who had a principal agen- the sanction of Mr. Madison, and, as it is believed, every cy in framing it; and no administration can claim a more member of the Cabinet, recommended to Congress the perfect exemption from all those influences which, some- establishment of a National Bank, as the only measure times, pervert the judgments, even of the most wise by which the public credit could be revived, and the fiscal and patriotic, than that of the Father of his Country, resources of the Government redeemed from a ruinous, during the first term of his service. and otherwise incurable embarrassment: and such had Such were the circumstances, under which all the been the impressive lesson taught by a very brief, but branches of the National Legislature solemnly determin- fatal experience, that the very institution, which had ed that the power of creating a National Bank was been so recently denounced and rejected by the Repubvested in Congress by the Constitution. The bank thus lican party, being now recommended by a Republican created, continued its operations for twenty years-the Administration, was carried through both branches of Conperiod for which its charter was granted-during which time, public and private credit was raised, from a prostrate, to a very elevated condition, and the finances of the nation were placed upon the most solid foundation.

gress as a Republican measure, by an overwhelming majority of the Republican party. It is true, that Mr. Madison did not approve and sign the bill which passed the two Houses, because it was not such a bill as had been recommended by the Secretary of the Treasury, and because the Bank it proposed to create, was not calculated, in the opinion of the President, to relieve the necessities of the country.

When the charter expired, in 1811, Congress refused to renew it, principally owing, as the Committee believe, to the then existing state of political parties. Soon after the bank was chartered, the two great parties that have since divided the country, began to assume an organized But he premised his objections to the measure, by existence. Mr. Jefferson and Mr. Madison, the former" waiving the question of the constitutional authority of in the Executive Cabinet, and the latter in Congress, had the Legislature to establish an incorporated bank, as bebeen opposed to the establishment of the bank, on con- ing precluded, in his opinion, by repeated recognitions, stitutional grounds, and being placed at the head of under varied circumstances, of the validity of such an instithe party most unfavorable to the extension of the pow-tution in acts of the Legislative, Executive, and Judicial ers of the Government, by implication, the bank question came to be regarded as, in some degree, the test of political principle.

When Mr. Jefferson came into power, upon the strong tide of a great political revolution, the odium of the alien and sedition laws was, in part, communicated to the Bank of the United States; and, although he gave his official sanction to an act, creating a new branch of that institution at New Orleans, and to another to punish the counterfeiting of its bills, yet, when the question of renewing the charter came before Congress, it was discussed as a party question. And, though some of the most distinguished republicans, including Mr. Gallatin, then Secretary of the Treasury, and Mr. Crawford, then a member of the Senate, were decidedly in favor of a renewal, sustaining the measure by able argaments, the votes in both branches of Congress were distinctly marked as party votes. At no time, since the commencement of the Government, has there existed a more violent party excitement, than that which marked the period under review. It was the period of the embargo, non intercourse, and other commercial restrictions; when the undiscriminating opposition of the leaders of the Federal party, to the measures adopted by the Administration, to vindicate our rights against British ag. gression, had caused the great majority of the American

branches of the Government, accompanied by indications, in different modes of a concurrence of the general will of the nation." Another bill was immediately introduced, and would in all probability have become a law, had not the news of peace, by doing away the pressure of the emergency, induced Congress to suspend further proceedings on the subject, until the ensuing session. At the commencement of that session, Mr. Madison invited the attention of Congress to the subject, and Mr. Dallas again urged the necessity of establishing a bank, to restore the currency, and facilitate the collection and disbursement of the public revenue; and so deep and solemn was the conviction upon the minds of the public functionaries, that such an institution was the only practicable means of restoring the circulating medium to a state of soundness, that, notwithstanding the decided opposition of all the State banks and their debtors, and indeed, the whole debtor class of the community, the act, incorporating the present Bank of the United States was passed by considerable majorities in both branches of Congress, and approved by Mr. Madison.

This brief history of the former and present bank, forcibly suggests a few practical reflections. It is to be remarked, in the first place, that since the adoption of the Constitution, a bank has existed under the authority of the Federal Government, for thirty-three out of forty

21ST CONG. 1ST SESS.]

Bank of the United States.

[H. of R.

years; during which time, public and private credit have | fare, and its constitutionality is merely doubtful, it would been maintained at an elevation fully equal to what has seem to be one of the most obvious dictates of practical existed in any nation in the world: whereas, in the two wisdom, to regard the decision of those who had the best short intervals, during which no national bank existed, means of ascertaining the intention of the constitution, and public and private credit were greatly impaired, and, in who were actuated by the most undoubted purity and disthe latter instance, the fiscal operations of the Govern- interestedness of motive, as of sufficient authority at least ment were almost entirely arrested. In the second place, to overrule theoretical objections, and silence individual it is worthy of special notice, that, in both the instances scruples. in which Congress has created a bank, it has been done under circumstances calculated to give the highest authority to the decision. The first instance, as has been already remarked, was in the primitive days of the Republic, when the patriots of the Revolution, and the sages of the Federal Convention, were the leading members both of the Executive and Legislative councils; and when General Washington, who at the head of her armies, had conducted his country to Independence, and, as the head of the Convention, had presided over those deliberations which resulted in the establishment of the present Constitution, was the acknowledged President of a people, undistracted by party divisions. The second in stance was under circumstances of a very different but equally decisive character. We find the very party which had so recently defeated the proposition to renew the charter of the old bank, severely schooled both by If Congress, under the authority to pass all laws neadversity, and experience, magnanimously sacrificing the cessary and proper for carrying into effect the powers pride of consistency, and the prejudices of party, at the vested in all or any of the departments of the Governshrine of patriotism. It may be said without disparagement, may rightfully pass a law inflicting the punishment ment, that an assembly of higher talent and purer patri- of death, without any other authority, it is difficult to conotism has never existed since the days of the Revolution, ceive why it may not pass a law, under the same authorithan the Congress by which the present bank was incor- ty, for the more humble purpose of creating a corporaporated. If ever a political party existed of which it tion. The power of creating a corporation is one of the might be truly said, that "all the ends they aimed at lowest attributes, or, more properly speaking, incidents were their country's," it was the republican party of that of sovereign power. The chartering a bank, for examday. They had just conducted the country through the ple, does not authorize the corporation to do any thing, perils of war, waged in defence of her rights and honor, which the individuals composing it might not do without and, elevating their views far above the narrow and mise- the charter. It is the right of every individual of the rable ends of party strife, sought only to advance the per- Union to give credit to whom he chooses, and to obtain manent happiness of the people. It was to this great end credit where he can get it. It is not the policy of any that they established the present bank, commercial country to restrict the free circulation of credit, whether in the form of promissory notes, bills of exchange, or bank notes. The charter of the Bank of the United States, therefore, merely enables the corporation to do, in an artificial capacity, and with more convenience, what it would be lawful for the individual corporators to do without incorporation. Mr. Girard established a bank in Philadelphia without a charter, which was in very high credit within the sphere of its circulation; and it cannot That may be said of the bank charter, which can be be doubted, that he might have formed a banking cosaid of few contested questions of constitutional power. partnership with the principal capitalists in the other comBoth the great political parties that have so long divi-mercial cities of the Union, of which the bills would ded the country, have solemnly pronounced it to be con- have had a general credit in every part of the country, stitutional, and there are but very few of the prominent particularly if the Federal Government had provided men of either party, who do not stand committed in its that these bills should be received in discharge of its dues. favor. When to this imposing array of authorities, the The only material particular in which the charter of the committee add the solemn and unanimous decision of the Bank of the United States confers a privilege upon the Supreme Court, in a case which fully and distinctly sub-corporation, apparently inconsistent with the State laws, mitted the Constitutional question to their cognizance, is, the exemption of the individual property of the cormay they not ask, in the language of Mr. Dallas, "can it porators from responsibility-for the debts of the corpobe deemed a violation of the right of private opinion to ration. But, if the community deal with the bank, know. consider the constitutionality of a national bank as a ques-ing that the capital subscribed is alone liable for its debts, tion forever settled and at rest?" no one can complain either of imposition or injury; and,

The committee will now submit a few remarks, with the design of showing, that viewing the constitutionality of the bank as an original question, the arguments in its favor are at least as strong as those against it.

The earliest, and the principal objection urged against the constitutionality of a national bank, was, that Congress had not the power to create corporations. That Congress has a distinct and substantive power to create corporations, without reference to the objects entrusted to its jurisdiction, is a proposition which never has been maintained, within the knowledge of the committee; but, that any one of the powers expressly conferred upon Congress, is subject to the limitation, that it shall not be carried into effect by the agency of a corporation, is a proposition which cannot be maintained, in the opinion of the committee.

In this review, it will be no less instructive than curious, to notice some of the changes made in the opinions of prominent men, yielding to the authority of experience. Mr. Madison, who was the leading opponent of the bank created in 1791, recommended and sanctioned the bank created in 1816; and Mr. Clay, who strenuously opposed the renewal of the charter in 1811, as strenuously supported the proposition to grant the charter, in 1816.

And here the committee beg to be distinctly under-in point of fact, no one ever has complained on that score, stood, as utterly disclaiming the idea of ascribing to the or ever will. The real complaint against the bank, is decision of any, or of all the departments of the govern- not that it has not a sufficient basis for its credit, but that ment, upon a great constitutional question, the binding its credit is too extensive. The objection lies, therefore, authority which belongs to judicial precedents, in cases not against the artificial character communicated to the of mere private right, depending upon the construction stockholders by the charter, but against the pecuniary of the ordinary acts of the legislature. No length of operations of the bank itself. Now, these operations prescription, or concurrence of authority, can consecrate consist in the use of its own capital-a faculty not surely the usurpation of powers subversive of public liberty, derived from the Government, but, in the exercise of and destructive of public happiness. But, where the which, the Government imposes many useful restrictions power exercised is clearly conductive to the public wel-for the benefit of itself and of the community.

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The committee have presented this brief analysis of a bank corporation, with the view of showing that there is nothing in the nature of the thing which renders it unfit to be an instrument in the hands of a government, admitted to be sovereign in its appropriate sphere, for carrying into effect powers expressly delegated.

[21ST CONG. 1ST SESS.

But, even if it should be conceded, that the grant of power to "coin money and fix the value thereof" does not, in its terms, give Congress the power of regulating any other than the "coined" currency of the Union, may not the power of regulating any substituted currency, and especially one which is the professed representative of It now remains for the committee to show that the Bank coin, be fairly claimed as an incidental power-as an esof the United States is 66 a necessary and proper," or, in sential means of carrying into effect the plain intention of other words, a natural and appropriate means, of execut- the constitution, in clothing Congress with the principal ing the powers vested in the Federal Government. In the power! This power was granted in the same clause with discussion of 1791, and also in that before the Supreme that to regulate weights and measures, and for similar reaCourt, the powers of raising, collecting, and disbursing the sons. The one was designed to ensure a uniform measure public revenue, of borrowing money on the credit of the of value, as the other was designed to ensure a uniform United States, and paying the public debt, were those measure of quantity. The former is decidedly the more which were supposed most clearly to carry with them the important, and belongs essentially to the General Governincidental right of incorporating a bank, to facilitate these ment, according to every just conception of our system. operations. There can be no doubt that these fiscal opera- A currency of uniform value is essential to what every tions are greatly facilitated by a bank, and it is confidently one will admit to be of cardinal importance: the equal believed, that no person has presided twelve months over action of our revenue system, upon the different parts of the Treasury, from its first organization to the present the Union. The state of things which existed when the time, without coming to the conclusion, that such an insti- bank was incorporated, furnished a most pregnant comtution is exceedingly useful to the public finances in time mentary on this clause of the Constitution. The currency of peace, but indispensable in time of war. But as this of the country consisted of the paper of local banks, variview of the question has been fully unfolded in former dis-ously depreciated. At one of the principal seaports the cussions, familiar to the House, the committee will prolocal currency was twenty per cent. below par. Now it eeed to examine the relation which the Bank of the Unit- was in vain for Congress to regulate the value of coin, ed States bears to another of the powers of the Federal when the actual currency, professing to be its equivalent, Government, but slightly adverted to in former discussions bore no fixed relation to it. This great and essential of the subject. power of fixing the standard of value, was, in point of The power to "coin money and fix the value thereof," fact, taken from Congress, and exercised by some hunis expressly and exclusively vested in Congress. This dreds of irresponsible banking corporations, with the grant was evidently intended to invest Congress with the strongest human motives to abuse it, because their power of regulating the circulating medium. enormous profits resulted from the abuse. The power of was regarded, at the period of framing the Constitution, laying and collecting imposts and excises is expressly subas synonymous with "currency," as it was then generally ject to the condition, that they "shall be uniform throughbelieved that bank notes could only be maintained in cir-out the United States," and it is also provided, that no culation by being the true representative of the precious preference shall be given, by any regulation of commerce, metals. The word "coin," therefore, must be regarded Now, when it is known that the circulating medium of or revenue, to the ports of one State over those of another." as a particular term, standing as the representative of a Baltimore was twenty per cent. below the value of the general idea. No principle of sound construction will justify a right adherence to the letter, in opposition to circulating medium of Boston, is it not apparent that an the plain intention of the clause. If, for example, the impost duty, though nominally uniform, would, in effect, gold bars of Ricardo should be substituted for our present to the depreciation of the local currency Congress, make a discrimination, in favor of Baltimore, proportioned coins, by the general consent of the commercial world, could it be maintained that Congress would not have therefore, not only had the power, but, as it seems to the the power to make such money, and fix its value, be-Committee, were under the most solemn constitutional cause it is not " coined?" This would be sacrificing sense Bank of the United States was not only an appropriate obligations to restore the disordered currency; and the to sound, and substance to mere form. This clause of

"Coin "

the Constitution is analogous to that which gives Con- means for the accomplishment of that end, but, in the gress the power "to establish post roads." Giving to opinion of the Committee, the only safe and effectual the word "establish" its restricted interpretation, as be- means that could have been used. This view of the subing equivalent to "fix," or " prescribe," can it be doubted ject is in full accordance with the opinions of Mr. Madison, that Congress has the power to establish a canal, or a riv-as expressed in his message of December, 1816. "But," er, as a post route, as well as a road? Roads were the say he, "for the interest of the community at large, as ordinary channels of conveyance, and the term was, there. fore, used as synonymous with "routes," whatever might be the channel of transportation, and, in like manner, "coin," being the ordinary and most known form of a cir culating medium, that term was used as synonymous with currency.

An argument in favor of the view just taken, may be fairly deduced from the fact, that the States are expressly prohibited from "coining money, or emitting bills of credit," and from "making any thing but gold and silver a lawful tender in payment of debts." This strongly confirms the idea, that the subject of regulating the circulating medium, whether consisting of coin or paper, was, at the same time that it was taken from the control of the States, vested in the only depository in which it could be placed, consistently with the obvious design of having a common measure of value throughout the Union.

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as for the purposes of the Treasury, it is essential the Nation should possess a currency of equal vacredit, and use, wherever it may circulate. The itution has entrusted Congress, exclusively, with ower of creating and regulating a currency of that ption, and the measures which were taken during st Session, in execution of the power, give every se of success. The Bank of the United States, unspices the most favorable, cannot fail to be an imat auxiliary."

Such are the authorities, and such the arguments which have brought the Committee to the conclusion, that the power to incorporate a bank is incidental to the powers of collecting and disbursing the public revenue, of borrowing money on the credit of the United States, of paying the public debt; and, above all, of fixing and regulating the standard of value, and thereby ensuring at least so far as the medium of payment is concerned, the uniformity and equality of taxation.

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