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with lead from Galena, Ill., and then with furs and pelts from the upper Mississippi, three thousand miles to the northwest. . “When I contemplate the vast region of country which is just now opening to cultivation and of which New Orleans is the natural mart, I find it impossible to set limits to the city's future increase.”
Judge Porter, referring to plantation life:
“The traveler from the North as he touches the region of orange and cane of smiling plantations, bounded in the background by dense forests stretching onward to a seemingly illimitable extent toward the south, looks down upon the planter's mansion, the cluster of white cottages hard by, the slaves at their daily task and the mounted overseer.”
All of which confirms the prosperity and the civilization which was claimed for Louisiana in 1830, and which we find confirmed in the prospectus issued by the Citizens' Bank of Louisiana in 1833, which says:
“Louisiana, one of the most interesting of the United States, is increasing in population, in proportion nowhere equalled-and New Orleans, the only seaport of the State, will soon be able to vie with the great commercial cities of the known world.”
Andrew Jackson had received the largest electoral vote in 1824. But the contest was carried into the House of Representatives. The Electoral College stood :
Adams received the vote of 13 States.
Crawford received the vote of 4 States. Jackson always harbored the thought that he had been cheated out of the Presidency through the influence of the Bank of the United States. He was, however, elected in 1828. His first message to Congress sounded his opposition to the Bank of the United States as follows:
“The charter of the Bank of the United States expires on March 3, 1836, and its stockholders will most probably apply for a renewal of their privilege. I feel that I cannot in justice to the parties interested too soon present it to the deliberate consideration of the Legislature and the people.
“Both the constitutionality and the expediency of the law creating this bank are well questioned by a large portion of our fellow-citizens, and it must be admitted by all that it has failed in the great end of establishing a uniform and sound currency.
“Under these circumstances, if such an institution is deemed essential to the fiscal operations of the government, I submit to the wisdom of the Legislature whether a national one, founded upon the credit of the government and its revenues might not be devised, which would avoid all constitutional difficulties and at the same time secure all the advantages to the government and country that was expected to result from the present bank."
The records show that:
January 1, 1830, balance account public debt was only $48,565,406.50, including $7,000,000.00 subscribed to the stock of the Bank of the United States. Jackson persisted in the idea that the bank was leading the money power against him and that he was the was the champion of the masses, and he insisted upon paying off the public debt.
In 1831, Jr. Albert Gallatin, the then Secretary of the Treasury, in his treatise on the currency and banking system of the United States, pronounced the Second Bank of the United States one of the best institutions in the world.
Jackson was re-elected over Henry Clay in 1832, which he construed as an endorsement of his policies:
To pay off the public debt,
Congress, however, passed a bill granting an extension of charter under certain limitations—1832. Jackson immediately vetoed the bill, and in 1833, he began removing the public deposits from the Bank of the United States and appointing State fiscal agents.
The veto message of 1832 is full of venom, and his action in removing the public funds occasioned a vote of censure in the Senate, which, however, was finally expunged.
In 1833, the Commercial Bank, $3,000,000 capital, which bank had been chartered several years before to construct a system of waterworks and did construct at a cost of $708,000 a system of underground pipes made of cypress logs bored out and
joined, was designated by the Secretary of the Treasury a depository of public money, following the policy of Jackson, to experiment in withdrawing the public monies gradually from the Bank of the United States and deposit with State banks.
The letter of Secretary Taney and the contract between the bank and the treasury show that the United States Government was anxious to afford additional facilities for the extensive commerce of New Orleans, but was just as exact and definite in its requirements for the protection of its funds as to-day. The letter shows conclusively the confidence with which New Orleans financial institutions were regarded in 1833.
Louisiana had from the very beginning encouraged banking capital to develop her wonderful resources by taking an interest, subscribing State funds to the capital and participating in the profits.
In 1804, the State granted a charter to the Louisiana Bank, capital $2,000,000. In 1805, the United States Bank established a branch in New Orleans. In 1811, the Bank of Orleans was chartered, capital $5,000,000.
The Second Bank of the United States, chartered in 1816, after about three years of struggle, pending the test of its constitutionality before the Supreme Court-McCulloch vs. Maryland-gradually became a potential factor in the regulation of the heretofore free and easy State bank currency issues, after favorable decision in 1819 for the bank. By systematically requiring the State banks to redeem in specie such of their notes as came into possession of the Bank of the United States, the State banks were kept fairly well in check.
In 1818 the Louisiana State Bank's capital was $2,000,000. In 1824 the Bank of Louisiana's capital was $4,000,000.
Many other joint banks and property banks obtained their charters from the State upon assuming a specific obligation to create some public utility, or to promote some great enterprise for the greater comfort of the people, or facility for trade and commerce.
In the year 1831, the State granted a charter to the Canal and Banking Company, capital $4,000,000. This bank, at a cost of over $1,000,000, was required under its charter to construct a navigable canal from Rampart Street to the lake or West End.
In the same year the Union Bank was chartered, capital $7,000,000, with special privileges as a property bank, and the State of Louisiana guaranteed its bond issue of $7,000,000, which was secured by mortgage on property valued at $15,000,000, and the entire capital was obtained in Europe.
In 1833, the Citizens' Bank of Louisiana was chartered also as a property bank, and the $12,000,000 capital was oversubscribed. In fact, the subscription to the capital was found to be $25,857,600.
Mr. Webster, addressing the Senate of the United States, March 18, 1834, advocating his bill proposing to grant the Bank of the United States an extension of its charter for six years without any exclusive privilege, referred to the “experiment," as it was known, and criticised the action of the Secretary of the Treasury removing the public monies from the Bank of the United States. Extracts from Webster's speech say:
1. It is often inquired, how this enormous amount of evil could spring from a cause so apparently inadequate to produce it! Can it be possible, it is asked, that the Secretary has brought about all this distress, simply by removing a few millions of doliars from one bank into another bank? Sir, nothing is more true, and nothing more easily accounted for.
Every commercial country has one great representative, constantly passing and acting between all its citizens. This universal representative is money, or credit, in some form, as its substitute. Without this agency nothing can be bought, and nothing can be sold ; capital has no income, and labor no reward. It is no more posssible to maintain the ordinary business and intercourse between man and man without money and credit, than to maintain an intercourse between nations without ministers or public agents, or to maintain punctual correspondence by letter, without the mail. And all the distress which the country now suffers arises solely from acts which have deranged the currency of the country and the credit of the commercial community. The country is as rich, in its general appearance, as it was before the experiment was begun; that is to say, men have the same houses, lands, ships and merchandise. But the value of these has fallen; or, to speak more correctly, they have lost the power of being exchanged; and they have lost this power because of the embarrassment which has befallen the general medium of exchange.
Six months ago a state of things existed, highly prosperous and advantageous to the country, but liable to be injuriously affected by precisely such a cause as has now been put into operation upon it. Business was active, and carried to a great extent. Commercial credit was expanded, and the circulation of money was large. This circulation, being of paper, of course rested on credit; and this credit was founded on banking capital and bank deposits. The public revenues, from the time of their collection to the time of their disbursement, were in the bank and its branches; and, like other deposits, contributed to the means of discount. Between the bank of the Bank of the United States and the State banks there was a watchfulness, perhaps of rivalry; but there was no enmity, no hostility. All moved in their own proper spheres, harmoniously and in order.
2. The Secretary disturbed this state of peace. He broke up all the harmony of the system. But suddenly withdrawing all the public moneys from the Bank of the United States, he forced that bank to an immediate correspondent curtailment of its loans and discounts. It was obliged to strengthen itself; and the State banks, taking the alarm, were obliged to strengthen themselves also by similar measures. So that the amount of credit actually existing, and on which men were doing business, was suddenly greatly diminished. Bank accommodations were withdrawn; men could no longer fill their engagements by customary means; property fell in value; thousands failed; many thousands more maintained their individual credit by enormous sacrifices; and all being alarmed for the future as well as distressed for the present, forbore from new transactions and new engagements. Finding enough to do to stand still, they do not attempt to go forward. This deprives the industrious and laboring classes of their occupations, and brings want and misery to their doors. This, sir, is a short recital of cause and effect. This is the history of the first six months of the “experiment.”
3. I hold the immediate convertibility of bank notes into specie to be an indispensable security to retaining their value; but, consistently with this security, and, indeed, founded upon it, credit becomes the great agent of exchange. It is allowed that it increases consumption by anticipating products; and that it supplies present wants out of future means. And as it circu! lates commodities without the actual use of gold and silver, it not only saves much by doing away with the constant transportation of the precious metals from place to place, but accomplishes exchanges with a degree of dispatch and punctuality not otherwise to be obtained.
4. The whole history of commerce shows that it flourishes or fades, just in proportion as property, credit and the fruits of labor are protected by free and just political systems. Credit cannot exist under arbitrary and rapacious governments, and commerce cannot exist without credit.
5. Banks are a part of the great system of commercial credit, and have done much, under the influence of good government, to