"3. The term corporations, as used in this article, shall be construed to include all associations and joint-stock companies having any of the powers or privileges of corporations not possessed by individuals or partnerships. And all corporations shall have the right to sue and shall be subject to be sued in all courts in like cases as natural persons."

This is doctrinal and not constitutional.

"4. The legislature shall have no power to pass any act granting any special charter for banking purposes; but corporations or associations may be formed for such purposes under general laws."

This is perfectly right, and applicable to all kinds of corporative business. If well carried out, the legislatures remain free to exercise their supervisory power without being in the least concerned or restricted by their own chartering. The legislator should not be complicated with mere ministerial office business.

"5. The legislature shall have no power to pass any law sanctioning in any manner, directly or indirectly, the suspension of specie payments, by any person, association, or corporation, issuing bank-notes of any description."

Perfectly right, nothing would be more unjust, because a political bank promises, upon the faith of the state, to pay cash for its bills of credit when presented. Any deviation from this constitutional policy must impair the credit of both banks and state. Alas! when in 1857, the banks suspended specie payment again, and the governor declined to interfere, the judges of the supreme court stepped in, declaring that this suspension is not exactly a refusal to pay, or an indication of insolvency, and refused, therefore, to proceed against them, as requested. This was generally denounced as an assumption of undue power. The clause obviously wishes to place the political banks and their notes as secure as possible. When the judiciary declares that the refusal of the promised specie is of no consequence, it unsettles the constitution, sports with the credit system, destroys confidence, prostrates the business, and places the banks above the constitution and law, and the confiding public at their mercy. This is more than a dangerous precedent, it is a public calamity. If those judges were appointed during good behavior, they would have been, no doubt, removed, when thus abusing their power. The question remains, whether they would then have acted thus?

The management of our public money affairs reminds one of a farmer, who, having a fine breadth of land, ordered his headman to plant it with wheat. This done, he sent another man out to

sow it over with oats. When the harvest arrived the wheat was gone and the oats not worth anything, whereupon came the crisis and bankruptcy of the farmer. A little reflection should teach, that people who establish two antagonistic monetary systems—the one in the states, the other in the Union-both in this regard the same thing, because commerce knows no political boundaries, act very inconsistently. We can not make one and the same business-coining money-at the same time national and municipal, without producing confusion and mischief. Banks, or no banks, make no difference. If such a hermaphrodite monetary system is right, then we may also have state navies, although expressly prohibited, like bills of credit, by chartering companies, as we charter banks, to build them. Good that it would be an unprofitable affair, otherwise we might have plenty of commodore navies, with the help of ingenious interpretation.

"6. The legislature shall provide by law for the registry of all bills or notes, issued or put in circulation as money, and shall require ample security for the redemption of the same in specie."

According to the opinion of Daniel Webster, our most distinguished constitutional expounder, this section is against clause 1, sect. x., art. I., of the federal constitution, for it is the cause of a real state paper-money. If a bank circulates paper-money under its own name, it is private money, if sanctioned by the state it is political or public money. But no state shall circulate money, neither directly nor indirectly, because Congress alone has to provide a circulating medium. This is a conflict which has been, on the ground of a judicial interpretation, waived by Congress up to this time, it must be said, to the great disadvantage of the nation.

"7. The stockholders in every corporation and joint-stock association for banking purposes, issuing bank notes or any kind of paper credits to circulate as money, after the first day of January, 1850, shall be individually responsible to the amount of their respective share or shares of stock in any such corporation or association, for all its debts and liabilities of every kind, contracted after the said first day of January, 1850."

This is plain and just enough, but does not belong to a constitution.

"8. In case of the insolvency of any bank or banking association, the bill

holders thereof shall be entitled to preference in payment, over all other creditors of such bank or association."

Belongs to a bankrupt law.

By allowing banks to circulate paper-money, (about two hundred million dollars in the United States), it is done on the supposition that the public will borrow it. Thus is created what is called a credit system. By this operation the industrious forces are artificially stimulated toward trading, speculating, and, perhaps, manufacturing, to the disadvantage of agriculture. Hence our cities grow fast in population, and the agricultural towns hardly any at all. Immense tracts of land in the vicinity of the greatest thoroughfares and most populous cities in the state of New York remain uncultivated. According to the census of 1850, it appears that Queens county, Long Island, comprises one hundred and twenty-three thousand three hundred and sixty acres of improved, and forty-six thousand two hundred and eighty-six of unimproved land, and Suffolk county one hundred and forty-three thousand six hundred and thirteen acres improved, and two hundred and ten thousand two hundred and ninety-two of unimproved land. This shows that a resistless force draws man from agricultural pursuits even in the vicinity of the best market. This force is the credit system, supported by banks with paper-money circulation; because it induces man to believe that it is the panacea and philosopher's stone which makes him rich without labor. Such stimulation and intoxication, in a free society like ours, must be injurious to the regular course of business and business habits. It creates reckless industrial fillibusters, who never think of the golden rule of the celebrated Virginian, "pay as you go," which may be considered the truc panacea of dull times, panics, and crises.

The well-known machinery of modern banks of issue, and of the credit system, is, in the main, the art of making money by debts, on state authority. Some men of property lend money to the state on interest; whereupon they get permission from the state in debt to issue as large an amount in notes as the state has promised to pay them, which they loan to others on interest. Then they take deposits, for which they pay no interest, which, however, they lend again on interest, always taking care that the borrowers get the bank-notes, while the bankers dispose of the metal-money in the market to all who pay the highest price for it.

By thus making money out of money, all depends naturally upon credit, that is, upon the belief of the borrower that the bankers are able to pay his debts to their bill-holders and depositors, and that of the bankers that their debtors are able to pay on demand, in cash. But as they seldom or never have any cash, and in the main only promissory notes, it is obvious that this credit is a mere illusion, and must terminate in panics and crises as soon as the real squaring of accounts begins.

The mechanical art which produces a fine durable paper and print, has supported this roundabout debt-making or credit system vastly. It is disgraceful in a society under a government of law, because this is supposed to rest mainly on morals, principles not discernible in this credit system.

"Debt-money," says Hunt's Merchant's Magazine, " is an eternal falsehood, and the New York state-banking system the highest phase and refinement of the falsehood." Such money raises artificially the prices of merchandise, bread, and labor, and lowers the value of gold and silver, which is then bought and exported. It supports the laboring masses in Europe by stimulating importation, to the injury of our home industry.

While this paper-money credit system easily produces on one hand general mercantile derangements, it renders on the other hand a stable financial management of the federal government almost impossible. You know that the main source of the income of Congress is, indirect, from customs. Now who has the power to derange commerce, has the power to cut off the customs and deplete the common treasury. This explains why Congress borrows, at present, in time of peace, millions for the support of the common government, which really means that the whole nation has to fill up the gap caused by the paper-money credit-system crisis. Therefore, as long as the states indulge in such things, a correct estimate of the revenues from the customs, and of the income of the common treasury, is out of the question. And here you see again what an immense difference there is between the words national and municipal. The monetary affairs in regard to coin, standard, and circulation are national, not municipal, as you know from the federal constitution, and no other than a national currency should circulate.

The financial events of 1857, nothing but revivals of prior

commercial revulsions tracing their origin to England, prove again that the framers of the federal constitution understood their task and the true principles of political economy better than their successors, by abstracting from all so-called credit systems and financial commercial experiments, and placing upon the solid basis of liberty and justice, the national industry, commerce included. It is mere infatuation to believe for a single minute that the material progress of our nation rests upon another or better basis. Those who substitute state-bank paper-money do all in their power to counteract the effect of the federal constitution and the blessings of our Union at home and abroad. American investments would be eagerly sought for by intelligent people in all parts of the world, if we had never seen a single dollar of debt-money; for there would be no nation, no state, surpassing ours in solid credit. The state paper-credit system is the greatest enemy of the true progress and substantial wealth and welfare of this nation. It is nonsense to believe that there can be wealth represented by.money without labor and industry. Whether industrious people have mines or not, makes no difference; they will always attract and command so much wealth, represented by money, as their industry is really worth, and enjoy a world-wide firm credit; while on the other hand mountains full of gold and silver and Wall-streets full of paper money can not prevent a lazy, indolent, and unpractical people like the Mexicans from sinking into utter ruin and insignificance. As some of the states have already fairly, as in duty bound, adopted the policy of the federal constitution and prohibited the circulation of bills of credit of state bank-paper money, to their great benefit and honor, it is to be hoped that soon, very soon, the rest will follow and carry out their own supreme law of the land. There is no better credit system in the world, and never will be, than that which is the product of industrial liberty and justice; and this, as I have repeatedly said, has given us this great fundamental law, the patent of our nationality. It has, in this regard, been misunderstood by the judiciary, supporting as it is by a weak amaurotic interpretation or quibble, the state bank-paper money. I write this without the least intention to reflect upon the private business of banking. The fault is not with the banks and bankers, but the politicians, desiring to be teachers of the law, derstanding neither what they say nor whereof they affirm."

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