ing immensely its powers, and giving it an unlimited control over the business and exchanges of the country.

The senator from Virginia (Mr. Rives) was right in supposing that this new trial of the experiment would be made under very different circumstances from the first, and would have a different termination. That, too, like this, was a bank--a government bank-as distinguished from the late Bank, to which it was set up as a rival, and was at the time constantly so designated in debate. But circumstances now are indeed different, very different, and so would be the result of the experiment. This bank,would not be the same rickety concern as the former. That ended in anarchy, and this would end in despotism. I will explain.

The former failed not so much in consequence of the adverse circumstances of the times, or any essential defect in the system, as from the want of a head —a common sensorium, to think, to will, and decide for the whole--which was indispensably necessary to ensure concert, and give unity of design and execution. A head will not be wanting now. Mr. Biddle's bank will supply the defect. His would be not only one of the resuming banks, as I have shown, but would also be one of the twenty-five to be selected. If there should be the temerity to omit it, the present project would share the fate of its predecessor. Mr. Biddle's bank, at the head of those excluded, would be an overmatch for the selected, in skill, capital, and power, and the whole league would inevitably be overthrown. But, if selected, the position of his bank in the league would be certain. Its vast capital, its extensive connexions, its superior authority, and his skill, abilities, and influence, would place it at the head, to think and act for the whole. The others would be as dependant on his as the branches of the late bank were on the mother institution. The whole would form one entire machine, impelled by a single impulse, and making a perfect contrast with its predecessor in the unity and energy of its operations.

Nor would its fate be less dissimilar. Anarchy was inscribed on the first from the beginning. Its deficiency in the great and essential element to ensure concert was radical, and could not be remedied. Its union with the government could not supply it, nor avert its destiny. But very different would be the case of the present. Add its intimate union with the government, for which the substitute provides, to its other sources of power, and it would become irresistible. The two, government and bank, would unite and constitute a single power; but which would gain the ascendency--whether the government would become the bank, or the bank the government-is neither certain nor material; for, whichever it might be, it would form a despotic money-cracy (if I may be permitted to unite an English and a Greek word) altogether irresistible.

It is not a little surprising that the senator from Virginia (Mr. Rives), whose watchful jealousy could detect, as he supposed, the embryo of a government bank in the bill, should overlook this regular incorporation of one by his own substitute. Out of the slender materials of treasury warrants, and draughts to pay public creditors, or transfer funds from place to place, as the public service might require, and four principal receivers to keep the public money, he has conjured up, with the aid of a vivid imagination, a future government bank, which, he told us, with the utmost confidence, would rise like a cloud, at first as big as a hand, but which would soon darken all the horizon. Now, it is not a little unfortunate for his confident predictions, that these seminal principles from which the bank is to spring have all existed, from the commencement of our government, in full force, except the four receivers, without showing the least tendency to produce the result he anticipates. Not only ours, but every civilized government, has the power to draw treasury warrants and transfer draughts; nor has the power in a single instance terminated in a bank. Nor can the fact that the money is to be kept by receivers contribute in the least

to produce one. The public funds in their hands will be as much beyond the control of the executive as it was in the vaults of the banks. But, to shorten discussion, I would ask, How can there be a bank without the power to discount or to use the deposites? and out of which of the provisions of the bill could the treasury by any possibility obtain either, under its severe penalties, which prohibits the touching of the public money, except on warrants or draughts, drawn by those having authority in due form, and for the public service.

But the danger which an excited imagination anticipates hereafter from the bill would exist in sober reality under the substitute. There it would require neither fancy nor conjecture to create one. It would exist with all its faculties and endowments complete-discount, deposites, and all-with immense 'means, guided by a central and directing head, and blended and united with the government, so as to form one great mass of power. What a contrast with the bill! How simple and harmless the one, with its four principal receivers, twice as many clerks, and five inspectors, compared with this complex and mighty engine of power! And yet there are many, both intelligent and patriotic, who oppose the bill and support the substitute, on the ground that the former would give more patronage and power than the latter! How strange and wonderful the diversity of the human mind!

So far from being true, the very fact of the separation of the government from the banks, provided for in the bill, would, of itself, be the most decisive blow that could be given against government patronage, and the union of the two the most decisive in its favour. When their notes are received in the public dues as cash, and the public money deposited in their vaults, the banks become the allies of the government on all questions connected with its fiscal action The higher its taxes and duties, the greater its revenue and expenditure; and the larger its surplus, the more their circulation and business, and, of course, the greater their profit; and hence, on all questions of taxation and disbursements, and the accumulation of funds in the treasury, their interest would throw them on the side of the government, and against the people.

All this is reversed when separated. The higher the taxation and disbursements, and the larger the surplus, the less would be their profit; and their interest, in that case, would throw them with the people, and against the government. The reason is obvious. Specie is the basis of banking operations, and the greater the amount they can command the greater will be their business and profits; but when the government is separated from them, and collects and pays away its dues in specie instead of their notes, it is clear that the higher the taxes and disbursements, and the greater the surplus in the treasury, the more specie will be drawn from the use of the banks, and the less will be left as the basis of their operations; and, consequently, the less their profit. Every dollar withdrawn from them would diminish their business fourfold at least; and hence a regard to their own interest would inevitably place them on the side to which I have assigned them.

The effects on the politics of the country would be great and salutary. The weight of the banks would be taken from the side of the tax-consumers, where it has been from the commencement of the government, and placed on the side of the tax-payers. This great division of the community necessarily grows out of the fiscal action of the government. Take taxation and disbursement together, and it will always be found that one portion of the community pays into the treasury, in the shape of taxes, more than it receives back in that of disbursements, and that another receives back more than it pays. The former are the tax-payers, and the latter the consumers-making the great, essential, and controlling division in all civilized communities. If, with us, the government has been thrown on the side of the consumers, as it has, it must, in a considerable degree, be attributed to its alliance with the banks, whose influence has been, in consequence, at all times steadily and powerfully on that side. It is to this

mischievous and unholy alliance that may be traced the disasters which have befallen us, and the great political degeneracy of the country. Hence the protective system; hence its associated and monstrous system of disbursements; hence the collection of more money from the people than the government could require; hence the vast and corrupting surpluses; hence legislative and executive usurpations; and, finally, hence the prostration of the currency, and the disasters which give rise to our present deliberations. Revive this fatal connexion-adopt this substitute, and all this train of evils will again follow, with redoubled disasters and corruption. Refuse the connexion-adopt this bill, and all will be reversed, and we shall have some prospect of restoring the Constitution and country to their primitive simplicity and purity. The effect of the refusal on the patronage of the government would be great and decisive. Burke has wisely said, that the "revenue is the state in modern times." Violence and coercion are no longer the instruments of government in civilized communities. Their reign is past. Everything is now done by money. It is not only the sinew of war, but of politics, over which, in the form of patronage, it exercises almost unlimited control. Just as the revenue increases or dimin. ishes, almost in the same proportion is patronage increased or diminished.

But admit, for a moment, that neither the separation nor the connexion would have any sensible effect to increase or diminish the revenue, and that it would be of the same amount, whether the bill or substitute should be adopted, yet, even on that supposition, the patronage of the latter would be a hundred fold greater than the former. In estimating the amount of patronage of any meas ure, three particulars must be taken into the calculation: the number of persons who may be affected by it, their influence in the community, and the extent of the control exercised over them. It will be found, on comparison, that the substitute combines all these elements in a far greater degree than the bill, as I shall now proceed to show. I begin with the number.

The bill provides, as has been stated, for four principal receivers, eight or ten clerks, and a suitable number of agents to act as inspectors, making, in the whole, say 25 individuals. These would constitute the only additional officers to keep and disburse the public money. The substitute, in addition to the officers now in service, provides for the selection of 25 banks, to be taken from the most powerful and influential, and which would have, on an average, at the least 100 officers and stockholders each, making, in the aggregate, 2500 persons who would be directly interested in the banks, and, of course, under the influence of the government.

As to the relative influence of the officers and the selected banks over the community, every impartial man must acknowledge that the preponderance would be greater on the side of the latter. Admitting the respectability of the receivers and other officers provided for in the bill, and the officers and stockholders of the banks to be individually the same, still the means of control at the disposition of the former would be as nothing compared to that of the latter. They would not touch a cent of public money. Their means would be limited to their salary, which would be too small to be felt in the community. Very different would be the case with the officers and stockholders of the banks. They, of all persons, are by far the most influential in the community. A greater number depend on them for accommodation and favour, and the success of their business and prospects in life, than any other class in society; and this would be especially true of the banks connected with the government.

It only remains, now, to compare the extent of the control that may be exercised by the government over the two, in order to complete the comparison; and here, again, the preponderance will be found to be strikingly on the same. side. The whole amount of expenditure, under the bill, would not exceed $30,000 or $40,000 annually, at the very farthest, and this constitutes the whole amount of control which the government can exercise. There would be

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no perquisites, no contracts, jobs, or incidental gains. The offices and salaries would be all. To that extent those who may hold them would be dependant How stands the acon the government, and thus far they may be controlled. count on the other side? What value shall be put on the public deposites in the banks? What on the receivability of their notes as cash by the government? What on their connexion with the government as their fiscal agent, which would give so great a control over the exchanges and business of the country? How many millions shall these be estimated at, and how insignificant must the paltry sum of $30,000 or $40,000 appear to those countless millions held, under the provisions of the substitute, at the pleasure of the gov

ernment!

Having now finished the comparison as to the relative patronage of the two measures, I shall next compare them as fiscal agents of the government; and here let me say, at the outset, that the discussion has corrected an error which I once entertained. I had supposed that the hazard of keeping the public money under the custody of officers of the government would be greater than in bank. The senators from New-Hampshire and Connecticut (Messrs. Hubbard and Niles) have proved from the record, that the hazard is on the other side, and that we have lost more by the banks than by the collecting and disbursing officers combined. What can be done to increase the security by judicious selection of officers and proper organization is strongly illustrated by the fact, stated by the chairman (Mr. Wright) in his opening speech, that in the war department there has been no loss for 15 years-from 1821 to 1836-on an expenditure certainly not less than $100,000,000. I take some pride in this result of an organization which I originated and established, when Secretary of War, against a formidable opposition.

As to the relative expense of the two agencies, that of the bill, as small as it is, if we are to judge by appearances, is the greatest; but if by facts, the substitute would be much the most so, provided we charge it with all the advantages which the banks would derive from their connexion with the government, as ought in fairness to be done, as the whole ultimately comes out of the pockets of the people.

In a single particular the banks have the advantage as fiscal agents. They would be the more convenient. To this they are entitled, and I wish to withhold from them no credit which they may justly claim.

The senator from Virginia (Mr. Řives) appeared to have great apprehension that the collection of the public dues in specie might lead to hoarding. He may dismiss his fears on that head. It is not the genius of modern and civilized governments to hoard; and if it were, the banks will take care that there shall be no extraordinary accumulation of cash in the treasury. Pass the bill, and I underwrite that we shall never have again to complain of a surplus. It would rarely, if ever, in peace and settled times, exceed three or four millions at the outside. Nor is his apprehension that hoarding of specie would lead to War is the harvest war less groundless. The danger is in another quarter. The vast increase of of banks, when they are connected with government. revenue and expenditures, and the enormous public loans, which necessarily inure mainly to their advantage, swell their profits in war to the utmost limits. But separate them from government, and war would then be to them a state of famine, for reasons which must be apparent after what has been said, which would throw their weight on the side of peace, and against war; just as certainly as I have shown that the separation would throw it on the side of taxpayers, and against the tax-consumers.

I come, now, to the comparison of the effects of the two measures on the currency of the country. In this respect, the senator from Virginia (Mr. Rives) seemed to think that his substitute would have a great superiority over the bill, but his reasons were to me wholly unsatisfactory. If we are to judge from ex

perience, it ought to be pronounced to be the worst possible measure. It has been in operation but twice (each for but a few years) since the commencement of the government, and it has so happened that the only two explosions of the currency occurred during those periods. But, without relying on these disastrous occurrences, we have seen enough to satisfy the most incredulous that there are great and radical defects in our bank circulation, which no remedy heretofore applied has been able to remove. It originates in the excess of paper compared to specie, and the only effective cure is to increase the latter and reduce the former; and this the substitute itself impliedly acknowledges, by proposing a remedy that would prove wholly inoperative. It proposes that, after a certain period mentioned, none of the banks to be selected should issue notesunder ten dollars. The effects would clearly be, not a diminution of the circulation of small notes, but a new division of the banking business, in which the issue of large notes would fall to the lot of the selected banks, and the small to the others, without restricting in the least the aggregate amount of paper circulation.

But what the substitute would fail to do, the bill would effectually remedy. None doubt but the separation from the banks would greatly increase the proportion of specie to paper; but the senator from Virginia (Mr. Rives) apprehends that its operation would be too powerful, so much so, in fact, as to destroy the banks. His argument is, that specie would be always at a premium, and that it would be impossible for the banks to do business so long as that was the case. His fears are groundless. What he dreads would be but a temporary evil. The very fact that specie would bear a premium would have the double effect to diminish paper circulation and increase the importation of specie, till an equilibrium between the two would be restored, when they would be at par. At what point this would be effected is a little uncertain; but the fear is, that with our decreasing revenue, instead of the specie being increased to excess, it would not be increased sufficiently to give the desired stability to the currency.

In this connexion, the senator urged an objection against the bill, which I regard as wholly groundless. He said that the payment of the dues of the gov ernment in specie would create a double demand: a domestic, as well as a foreign, the effects of which would be to increase greatly its fluctuations; and so deeply was he impressed with the idea, that he drew a vivid picture of its alternate flow from the coast to the interior, and from North to South, and back again. All this is the work of imagination. The effect would be directly the reverse. The more numerous the demands the less the fluctuation; so much so, that the greatest stability would be where it exclusively performed the function of circulation, and where each individual must keep a portion to meet his daily demands. This is so obvious, that I shall not undertake to illustrate it.

But the superiority of the bill over the substitute would not be limited only to a more favourable proportion between specie and paper. It would have another important advantage, that cannot be well over-estimated: it would make a practical' distinction between currency and circulation-between the currency of the country and private and local circulation, under which head bank paper would be comprehended. The effects would be, to render a general explosion of the circulation almost impossible. Whatever derangements might occur would be local, and confined to some one particular commercial sphere; and even within its limits there would be a sound currency to fall back on, not partaking of the shock, and which would greatly diminish the intensity and duration of the distress. In the mean time, the general business and finances of the country would proceed, almost without feeling the derangement.

With a few remarks on the comparative effects of the two measures on the industry and business of the country, I shall conclude the comparison. What has been said on their relative effects on the currency goes far to decide the question of their relative effects on business and industry.