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SPEECH IN WALL STREET.*
I am duly sensible, fellow-citizens, both of the honor and of the responsibility of the present occasion. An honor it certainly is to be requested to address a body of merchants such as I behold before me, as intelligent, as enterprising, and as respectable as any in the world. A responsible undertaking it is to address such an assembly, and on a subject which many of you understand scientifically and in its elements at least as well as I do, and with which most of you have more or less of practical acquaintance. The currency of a country is a subject always important, and in some measure complex; but it has become the great leading question of our time. I have not shrunk from the expression of my opinions, since I have been in public life, nor shall I now, especially since on this question another great political question seems likely to turn; namely, the question whether one administration is about to go out of power, and another administration to come into power.
Under these circumstances, it becomes me to premise what I have now to say by remarking, in the first place, that I propose to speak for nobody but myself. My general opinions on the subject of the currency have been well known; and as it has now become highly probable that those who have opposed all that has recently been done by the government on that subject will be called on to propose some remedies of their own for the existing state of things, it is the more incumbent on me to notify all who hear me, that what I now say I say for myself alone; for in regard to the sentiments of the distinguished individual whom it is your purpose to support for the Presidency, I have no more authority
* A Speech delivered at the Merchants' Meeting in Wall Street, New York, on the 28th of September, 1840.
to speak than any of yourselves, nor any means of knowing his opinions more than is possessed by you, and by all the country.
I will, in the first place, state a few general propositions, which I believe to be founded on true principles of good, practical political economy, as understood in their application to the condition of a country like ours.
And first, I hold the opinion that a mixed currency, composed partly of gold and silver and partly of good paper, redeemable and steadily redeemed in specie on demand, is the most useful and convenient for such a country as we inhabit, and is sure to continue to be used, to a greater or less extent, in these United States; the idea of an exclusive metallic currency being either the mere fancy of theorists, or, what is probably nearer the truth, being employed as a means of popular delusion.
I believe, in the next place, that the management of a mixed currency, such as I have mentioned, has its difficulties, and requires considerable skill and care; and this position is as true in respect to England, the greatest commercial country of Europe, as it is of the United States. I believe, further, that there is danger of expansion and of contraction, both sudden in their recurrence, in the use of such a currency; yet I believe that where a currency altogether metallic exists, as it does in Cuba, and in countries where metallic coin is most in use, as in France, there are fluctuations in prices, there are disasters and commercial failures, occurring perhaps nearly as often, and being perhaps as bad in their character, as in countries where a well-regulated paper currency exists.
In the next place, I hold that the regulation of the currency, whether metallic or paper, — that a just and safe supervision over that which virtually performs the office of money, and constitutes the medium of exchange, whatever it may be, — necessarily pertains to government; that it is one of the necessary and indispensable prerogatives of government.
Every bank, as banks are now constituted in this country, performs two distinct offices or functions. First, it discounts bills or notes. This is merely the lending of money, and may be performed by corporations, by individuals, or by banks without circulation, acting as banks of discount merely. In this country, our banks are all banks of circulation, issuing
paper with an express view to circulation. When such a bank discounts notes, it pays the amount of discount in its own bills, and thereby adds so much to the actual amount of circulation, every such operation being, by so much, an increase of the circulating medium of the country. Hence it is true, that, in the absence of all government control and supervision, the wisdom and discretion regulating the amount of money afloat at any time in the community are but the aggregate of the wisdom and discretion of all the banks collectively considered; each individual bank acting from the promptings of its own interest, without concert with others, and not from any sense of public duty. In my judgment, such a regulator, or such a mode of regulating the currency, and of deciding what shall be the amount of money at any time existing in the community, is unsafe and untrustworthy, and is one to which we never can look to guard us against those excessive expansions and contractions which have produced such injurious consequences. Hence arises my view of the duty of government to take the care and control of the issues of these local institutions, and thereby to guard the community against the evils of an excessive circulation. I am of opinion, that the government may establish such a control and supervision as shall accomplish these purposes in two ways; and first, by restraining the issues of the local banks. You all know, and from experience, perfectly well, that a general institution for the circulation of a currency, which shall be as good in one part of the country as in another, if it shall possess a competent capital and shall be empowered to act as the fiscal agent of the government, is capable of controlling excessive issues, and keeping the bank paper in circulation in a community within reasonable limits. Such an institution acts also beneficially by supplying a currency which is of general credit, and uniform in value throughout the country.
This brings us to the point. What we need, and what we must have, is some currency which shall be equally acceptable in the Gulf of Mexico, in the valley of the Mississippi, on the Canada frontier, on the Atlantic Ocean, and in every town, vil. lage, and hamlet of our extended land. The question is, how to get this. Now, it seems to me that this question is to be answered by a plain reference to the condition of the country, to the form of its government, and to the objects for which the
general government was constituted. Why is it that no State bank paper, however secure, under institutions however respectable, in cities however wealthy, and with a capital however ample, has ever succeeded, but has uniformly failed, to give a national character to the currency? The cause of this is obvious. We live under a government which makes us, in many important respects, one people, and which does this, and was intended to do it, especially in whatever relates to the commerce of the country. Yet the nation exists in twenty-six distinct and sovereign States, extending over a space as wide almost as the greatest empires of Europe. In this state of things, every man knows, and is bound to know, two governments; first, the government of his own State. If that State has established banks, he knows, and is bound to know, on what principles these banks have been established, whether they are safe as objects of credit, and whether the laws of their administration are wise. Generally speaking, these State institutions - I refer now more particularly to those in the central and the northern and eastern sections of the Union, because with these I am best acquainted
– enjoy the confidence of the people of the several States where they exist. Their issues are in general well received, not only in the States where the banks are established, but frequently also in the neighboring States. Every citizen is also bound, in like manner, to know the laws of the general government, the security of the institutions it has founded, and their general character; and since this is a national subject, over which the general government acts as such, he regards its acts and provisions as of a national character. Every man looks to institutions founded by Congress as emanating from the national government, a government which he knows, and which, to a certain extent, he himself influences by the exercise of the elective franchise, and in which it is his duty, as a good citizen, to correct, so far as in his power, whatever may be amiss. He has confidence, therefore, in the national government, and in the institutions it sanctions, as in something of his own; but the case is very different when he is called to take the paper of banks chartered by a distant Ştate, over which he has no control, with which he has little personal acquaintance, and of whose institutions he knows not whether they are well or ill founded, or well or ill administered.
In exemplification of this, if you take a note of one of the best banks in the city of New York, rich as this city is, and place upon it forty indorsements of the most substantial mercantile houses, and then carry that note to the frontier, and read it to the people there, such is the nature of man, and such is his habit of looking to the nation for that medium which is to circulate through the nation, that you cannot get that New York note, with all its indorsements, to circulate there as national money. Can I give a stronger proof of the truth of this assertion than is found in a fact which you all know? Your city banks pay specie; the banks of Philadelphia and the Bank of the United States do not pay specie, and their paper is consequently at a discount here of three, and I believe of five, per cent. But how is it on the frontier? I undertake to say that you may go to Arkansas, or Missouri, with a note of the speciepaying banks of New York, and with another of the non-speciepaying Bank of the United States, and the latter shall be preferred. And why? Because it is in the name of its national predecessor. There is an odor of nationality which hangs around it, and clings to it, and is long in being separated from it.
In the next place, my opinion is, that a currency emanating partly from a national authority as broad in its origin as the whole country, and partly from local banks organized as our banks now are, and issuing paper for local circulation, is a better currency for the whole people than ever before existed in the world. Each of these classes of institutions, and each of these kinds of currency, has its own proper use and value. I affirm that the banking institutions of New York and of New England are organized on better principles than the joint stock companies of Great Britain; and I hold that we are competent, with a tolerable intellect, and with an honest purpose, to establish a national institution which shall act with less Auctuation than is experienced in England under the Bank of England.
Now, Gentlemen, I do not at all mean to say that there is only one mode, or two modes, of accomplishing this great national object. I do not say that a national bank is the only means to effect it; but, in my judgment, it is indisputably true that the currency should, in some degree, or in some portion of it, be nationalized in its character. This is indispensable to the great ends of circulation and of business in these United States,