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them. A large part of the nation, too, sincerely entertained the chimerical notion, now universally exploded, that it was practicable to establish and maintain a safe and stable paper currency, even when not convertible into specie at the pleasure of the holder ; and the example of England and its national bank was referred to with effect, though, from its history since, the same example could now be referred to with double effect on the other side of the discussion. After an earnest and able debate, then, the bill, on the whole, passed the Senate, and it was understood that a considerable majority of the House of Representatives was in its favour.
When brought there on the 9th of December, 1814, it excited a very animated discussion, which, with various interruptions from the forms and rules of the House, references to committces, and occasional adjournments, was continued till the 2d of January. In this protracted debate Mr. Webster took a conspicuous part; and his efforts, of which the speech now published is but an inconsiderable item, did much to avert the threatened evil, and to establish his reputation, not merely as an eloquent and powerful debater, which had already been settled in the previous session, but as a sagacious and sound statesman.
His principal opposition to the bill was made on the last day of its discussion. He then introduced a series of resolutions, bringing the bank proposed within the limits of the specie-paying principle, and taking off from it the restraints, which placed it too much within the power of the government to make it uscful as a monied institution, either to the finances or to the commerce of the country. The objections to the plan then before Congress, and the disasters that would probably follow its adoption, he portrayed in the following strong language, which none, however, will now think to have been too strong.
“ The capital of the bank, then, will be five millions of specie, and forty-five millions of government stocks. In other words, the bank will possess five millions of dollars, and the government will owe it forty-five millions. This debt from government, the bank is restrained from selling during the war, and government is excused from paying until it shall see fit. The bank is also to be under obligation to loan government thirty millions of dollars on demand, to be repaid, not when the convenience or necessity of the bank may require, but when debts due to the bank, from government, are paid ; that is, when it shall be the good pleasure of government. This sum of thirty millions is to supply the necessities of government, and to supersede the occasion of other loans. This loan will doubtless be made on the first day of the existence of the bank, because the public wants can admit of no delay. Its condition, then, will be, that it has five millions of specie, if it has been able to obtain so much, and a debt of seventyfive millions, no part of which it can either sell or call in, due to it from governo ment.
“The loan of thirty millions to government, can only be made by an immediale issue of bills to that amount. If these bills should return, the bank will not be able to pay them. This is certain, and to remedy this inconvenience, power is given to the directors, by the act, to suspend, at their own discretion, the payment of thetr notes, until the President of the United States shall other. wise order. The President will give no such order, because the necessities of government will compel it to draw on the bank till the bank becomes as necessitous as itself. Indeed, whatever orders may be given or withheld it will be utterly impossible for the bank to pay its notes. No such thing is expected from it. The first note it issues will be dishonoured on its return, and yet it will continue to pour out its paper, so long as government can apply it in any degree to its purposes.
" What sort of an institution, sir, is this? It looks less like a bank, than a department of government. It will be properly the paper-money department. Its capital is government debts; the amount of its issues will depend on government necessities ; government, in effect, absolves itself from its own debts to the bank, and by way of compensation absolves the bank from its own contracts with others. This is, indeed, a wonderful scheme of finance. The government is to grow rich, because it is to borrow without the obligation of repaying, and is to borrow of a bank which issues paper, without liability to redeem it. If this bank, like other institutions which dull and plodding common sense has erected, were to pay its debts, it must have some limits to its issues of paper, and therefore, there would be a point beyond which it could not make loans to government. This would fall short of the wishes of the contrivers of this system. They provide for an unlimited issue of paper, in an entire exemption from payment. They found their bank, in the first place, on the discredit of government, and then hope to enrich government out of the insolvency of their bank. With them, poverty itself is the main source of supply, and bankruptcy a mine of inexhaustible treasure.” Pp. 224-5.
The resolutions proposed by Mr. Webster, and supported in this speech, were not passed. Probably he did not expect them to pass, when he proposed them ; but the same day, the main question was taken upon the passage of the bill itself; and, as it was rejected by the casting vote of the speaker, there can be no reasonable doubt, that without his exertions this portentous absurdity would not have been defeated. It is but justice, however, to the supporters of the measure, to say, that the mischie. vous consequences of its adoption, were by no means so apparent then as they are now.
We have since had no little experience on the whole matter. It required all the power and influence of the general government, and of the present sound and speciepaying Bank of the United States, acting vigorously in concert for several years after the war, to relieve the country from the flood of depreciated notes of the state banks with which it was inundated, and to restore a safe and uniform currency. When or how this evil could have been remedied, if, at the very close of the war, it had been almost indefinitely increased by the establishment of a vast machine, issuing every day as much irredeemable paper as would be taken at any and every discount, and thus co-operating with the evil itself, instead of opposing it, is more than any man will now be bold enough to conjecture. We should, no doubt, have been in bondage to it to this hour, and probably left it as a yoke upon the necks of our children.
But, at the time referred to, the necessities of the government were urgent; and, on motion of Mr. Webster, the rule that pre
vented a reconsideration at the same session of a subject thus disposed of, was suspended the very next day, and a bill for a bank was on the same day, January 3, recommitted to a select committee. On the 6th, the committee reported a specie-paying bank, with a much diminished capital, which was carried in the house, with the fewest possible forms, on the 7th; Mr. Webster and most of his friends voting for it. It passed the senate, too, though with some difficulty ; but was refused by the president, on the ground, that it was not sufficient to meet the exigencies of the case, which, indeed, we now know, no bank would have been able to meet. This project, however, being thus rejected, another was immediately introduced into the senate, the basis of which was to be laid, like that of the first bank proposed, in a paper currency. It passed that body ; but on being brought into the house met a severe and determined opposition, which ceased only when, on the 17th, the news of peace being received, the bill was indefinitely postponed.
Mr. Webster's exertions, however, on the subject of the currency, did not cease with the overthrow of the paper bank system. He was re-elected to New Hampshire for the fourteenth Congress, and sat there during the sessions of 1815–16; and 1816–17. The whole state of things in the nation was now changed. The war was over, and the great purpose of sound statesmanship was therefore to bring the healing and renovating influences of peace into the administration and finances of the country. The present bank was chartered in April 1816, and was placed, substantially on the principles maintained in Mr. Webster's resolutions of the preceding year. But still it seemed doubtful whether this institution, however wisely managed, would alone have power enough to restore a sound currency The small depreciated notes of the state banks south of New-England, still filled the land with their loathed intrusion ; and, what was worse, the revenue of the general government, receivable at the different custom-houses, was collected in this degraded paper, to the great injury of the finances of the country, and to the still greater injury of the property of private individuals, who, in different states, paid, of course, different rates of duties to the treasury, according to the value of the paper medium in which it happened to be received. Mr. Webster foresaw the mischiefs that must follow from this state of things, if a remedy were not speedily applied. He, therefore, in the same month of April 1816, introduced a resolution, the effect of which was, to require the revenue of the United States to be collected and received only in the legal currency of the United States, or in bills equal to that currency in value.
In stating the nature of the evil, after showing by what means
paper of the state banks south of New-England had become depreciated; he says,
“What still farther increases the evil is, that this bank paper being the issue of very many institutions, situated in different parts of the country, and possessing different degrees of credit, the depreciation has not been, and is not now, uniform throughout the United States. It is not the same at Baltimore as at Philadelphia, nor the same at Philadelphia as at New.York. In New-England, the banks have not stopped payment in specie, and of course their paper has not been depressed at all. But the notes of banks which have ceased to pay specie, have nevertheless been, and still are, received for duties and taxes in the places where such banks exist. The consequence of all this is, that the people of the United States pay their duties and taxes in currencies of different values, in different places. In other words, taxes and duties are higher in some places than they are in others, by as much as the value of gold and silver is greater than the value of the several descriptions of bank paper which are received by government. This difference in relation to the paper of the District where we now are, is twenty-five per cent. Taxes and duties, therefore, collected in Massachusetts, are one quarter higher than the taxes and duties which are collected, by virtue of the same laws, in the District of Columbia.” Pp. 233--4.
A little further on, after showing that if this state of things is not changed by the government, it will be likely to change the government itself, he adds,
“ It is our business to foresee this danger, and to avoid it. There are some political evils which are seen as soon as they are dangerous, and which alarm at once as well the people as the government. Wars and invasions therefore are not always the most certain destroyers of national prosperity. They come in no questionable shape. They announce their own approach, and the general security is preserved by the general alarm. Not so with the evils of a debased coin, a depreciated paper currency, or a depressed and falling public credit. Not so with the plausible and insidious mischiefs of
paper money system. These insinuate themselves in the shape of facilities, accommodation, and relief. They hold out the most fallacious hope of an easy payment of debts, and a lighter burden of taxation. It is easy for a portion of the people to imagine that government may properly continue to receive depreciated paper, because they have received it, and because it is more convenient to obtain it than to obtain other paper, or specie. But on these subjects it is, that government ought to exercise its own peculiar wisdom and caution. It is supposed to possess on subjects of this nature, somewhat more of foresight than has fallen to the lot of indi. viduals. It is bound to foresce the evil before every man feels it, and to take all necessary measures to guard against it, although they may be measures attended with some difficulty and not without temporary inconvenience. In my humble judgment, the evil demands the immediate attention of Congress. It is not certain, and in my opinion not probable, that it will ever cure itself. It is more likely to grow by indulgence, while the remedy which must in the end be applied, will become less efficacious by delay.
"The only power which the general government possesses of restraining the issues of the state banks, is to refuse their notes in the receipts of the treasury. This power it can exercise now, or at least it can provide now for exercising in reasonable time, because the currency of some part of the country is yet sound, and the evil is not universal. If it should become universal, who, that hesitates now, will then propose any adequate means of relief? If a measure, like the bill of yesterday, or the
resolutions of to-day, can hardly pass here now, what hope is there that any efficient measure will be adopted hereafter ?" pp. 235–6.
The doctrine of this speech is as important as it is true. A sound and uniform currency is essential, not only for the convenient and safe management of the fiscal concerns of a government; but, no less so, for the security of private property. It is, indeed, at once the standard and basis of all transfer and exchange; and, whenever the circulating medium has become much deranged in any country, it has been found an arduous, and sometimes a dangerous task, to restore it to a sound state. The effort almost necessarily brings on a conflict between the two great classes of debtor and creditor, into which every community is divided, the creditor claiming the highest standard of value in the currency, and the debtor the lowest; and the results of such a conflict have not unfrequently been found in changes, convulsions, and political revolution. From such a conflict we were saved in this country, by the defeat of the papercurrency bank proposed in 1814,—by the establishment of the present specie paying bank, and by the adoption of Mr. Webster's resolution, which was approved by the President on the 30th of April, 1816.
It was at this period, however, that Mr. Webster determined to change his residence, and, of course, to retire for a time at least, from public life. He had now lived in Portsmouth nine years; and they had been to him years of great happiness in his private relations, and, in his relations to the country, years of remarkable advancement and honour. But, in the disastrous fire, which, in 1813, destroyed a large part of that devoted town, he had sustained a heavy loss, which the means and opportunities offered by his profession in New Hampshire were not likely to repair. He determined, therefore, to establish himself in a larger capital, where his resources would be more ample, and, in the summer of 1816, removed to Boston, where he has ever since resided.
His object now was professional occupation, and he devoted himself to it for six or eight years exclusively, with unremitting assiduity, refusing to accept office, or to mingle in political discussion. His success corresponded to his exertions. He was already known as a distinguished lawyer in his native state ; and the two terms he had served in Congress, had placed him, notwithstanding his comparative youth, among the prominent statesmen of the country. His rank as a jurist, in the general regard of the nation, was now no less speedily determined. Like many other eminent members of the profession, however, who have rarely been able to select at first what cases should be entrusted to them, it was not for him to arrange or determine the time and the occasion, when his powers should be decisively measured and made known. We must, therefore, account it for a fortunate accident, though perhaps one of those accidents granted only to talent like his, that the occasion was the well known case of Dartmouth College ; and, we must add, as a circumstance no less fortunate, that the forum where he was