Thirty Years' View (Vol. II of 2)

For misappropriating sixty thousand dollars of one of their customers – using it without his consent – these three great London bankers were sentenced to fourteen years' transportation: for misappropriating thirty-five millions, and sinking twenty-one millions more in other institutions, the wrong-doers go free in the United States – giving some countenance among us to the sarcasm of the Scythian philosopher, that laws are cobwebs which catch the weak flies, and let the strong ones break through. The Judge (Mr. Baron Alderson) who tried this case (that of the three London bankers), had as much heart and feeling as any judge, or man ought to have; but he also had a sense of his own duty, and of his obligations to the laws, and to the country; and in sentencing men of such high position, and with whom he had been intimate and social, he combined in the highest degree the feelings of a man with the duties of the judge. He said to the prisoners:

"William Strahan, Sir John Dean Paul, and Robert Makin Bates, the jury have now found you guilty of the offence charged upon you in the indictment – the offence of disposing of securities which were entrusted by your customers to you as bankers, for the purpose of being kept safe for their use, and which you appropriated, under circumstances of temptation, to your own. A greater and more serious offence can hardly be imagined in a great commercial city like this. It tends to shake confidence in all persons in the position you occupied, and it has shaken the public confidence in establishments like that you for a long period honorably conducted. I do very, very much regret that it falls to my lot to pass any sentence on persons in your situation; but yet the public interest and public justice require it; and it is not for me to shrink from the discharge of any duty, however painful, which properly belongs to my office. I should have been very glad, if it had pleased God that some one else now had to discharge that duty. I have seen (continued the learned judge, with deep emotion) at least one of you under very different circumstances, sitting at my side in high office, instead of being where you now are, and I could scarcely then have fancied to myself that it would ever come to me to pass sentence on you. But so it is, and this is a proof, therefore, that we all ought to pray not to be led into temptation. You have been well educated, and held a high position in life, and the punishment which must fall on you will consequently be the more seriously and severely felt by you, and will also greatly affect those connected with you, who will most sensitively feel the disgrace of your position. All that I have to say is, that I cannot conceive any worse case of the sort arising under the act of Parliament, applicable to your offence. Therefore, as I cannot conceive any worse case under the act, I can do nothing else but impose the sentence therein provided for the worst case, namely, the most severe punishment, which is, that you be severally transported for fourteen years."

For the admiration of all in our America – for the imitation of those who may be called to act in the like cases – with the sad conviction that the administration of criminal justice is not equal in our Republic to what it is in the monarchies of Europe: for the benefit of all such, this brief notice of judicial action in an English court against eminent, but culpable bankers, is here given – contrasting so strikingly with the vain attempts to prosecute those so much more culpable in our own country.

CHAPTER LXXXVIII.

END AND RESULTS OF THE EXTRA SESSION

This extraordinary session, called by President Harrison, held under Mr. Tyler, dominated by Mr. Clay, was commenced on the 31st of May and ended the 13th of September: seventy-five days' session – and replete with disappointed calculations, and nearly barren of permanent results. The whigs expected from it an easy and victorious course of legislation, and the consolidation of their power by the inauguration of their cherished measures for acting on the people – national bank – paper money national currency – union of bank and state – distribution of public money – bankrupt act – monopoly of office. The democracy saw no means of preventing these measures; but relied upon the goodness of their cause, the badness of the measures to be adopted by the whigs, and the blunders they would commit, to give them eventual victory, and soon to restore parties to their usual relative positions. The defection of Mr. Tyler was not foreseen: his veto of a national bank was not counted upon: the establishment of that institution was considered certain: and the only remedy thought of was in the repeal of the law establishing it. As a public political corporation, that repealability came within the decision of the Supreme Court of the United States in the Dartmouth College case; and being established for the good of the state, it became amenable to the judgment of the State upon the question of good, or evil – to be decided by the political power. Repealability was then the reliance against a national bank; and that ground was immediately taken, and systematically urged – both for the purpose of familiarizing the people with the idea of repeal, and of deterring capitalists from taking its stock. The true service that Mr. Tyler did the democratic party was in rejecting the bank charters (for such they both were, though disguised with ridiculous names). Numerically he weakened the whig ranks but little: potentially not at all – as those who joined him, took office: and became both useless to him, and a reproach. That beau ideal, of a whig unity – "whig President, whig Congress, and whig people" – which Mr. Webster and Mr. Cushing were to realize, vanished: and they with it – leaving Mr. Tyler without whig, and without democratic adherents; but with a small party of his own as long as he was in a condition to dispense office. The legislation of the session was a wreck. The measures passed, had no duration. The bankrupt act, and the distribution act, were repealed by the same Congress that passed them – under the demand of the people. The new tariff act, called revenue – was changed within a year. The sub-treasury system, believed to have been put to death, came to life again. Gold and silver, intended to have been ignored as a national currency, had become that currency – both for the national coffers, and the people's pockets. Of all the measures of that extraordinary session, opening with so much hope, nothing now remains to recall the idea of its existence, but, first – The Home Squadron! keeping idle watch on our safe coasts, at the cost of a million per annum. Next, The Ocean Line Steamers! plundering the country of two millions annually, oppressing fair competition and damaging the character of Congress. And last, not least, That One Hour Rule! which has silenced the representatives of the people in the House of Representatives, reduced the national legislation to blind dictation, suppressed opposition to evil measures, and deprived the people of the means of knowing the evil that Congress is doing.

To the democracy it was a triumphant session – triumphant in every thing that constitutes moral and durable triumph. They had broken down the whig party before the session was over – crushed it upon its own measures; and were ready for the elections which were to reverse the party positions. The Senate had done it. The House, oppressed by the hour rule, and the tyrannical abuse of the previous question, had been able to make but little show. The two-and-twenty in the Senate did the work; and never did I see a body of men more effective or brilliant – show a higher spirit or a more determined persistence. To name the speakers, would be to enumerate all – except Mr. Mouton, who not having the English language perfect was limited to his vote – always in place, and always faithful. The Globe newspaper was a powerful assistant, both as an ally working in its own columns, and as a vehicle of communication for our daily debates. Before the session was over we felt ourselves victorious, and only waiting for the day when the elections were to show it. Of all our successes, that of keeping the hour rule, and the previous question out of the American Senate, was the most brilliant, and durably beneficent – rising above party – entering the high region of free government – preserving the liberty of speech – preserving to republican government its distinctive and vital feature, that of free debate; and saving national legislation from unresisted party dictation.

CHAPTER LXXXIX.

FIRST ANNUAL MESSAGE OF PRESIDENT TYLER

This message coming in so soon after the termination of the extra session – only two months after it – was necessarily brief and meagre of topics, and presents but few points worthy of historical remembrance. The first subject mentioned was the acquittal of McLeod, which had taken place in the recess: and with which result the British government was content. The next subject was, the kindred matter of the Caroline; on which the President had nothing satisfactory to communicate, but expressed a high sense of the indignity which had been offered to the United States, and evinced a becoming spirit to obtain redress for it. He said:

"I regret that it is not in my power to make known to you an equally satisfactory conclusion in the case of the Caroline steamer, with the circumstances connected with the destruction of which, in December, 1837, by an armed force fitted out in the Province of Upper Canada, you are already made acquainted. No such atonement as was due for the public wrong done to the United Stares by this invasion of her territory, so wholly irreconcilable with her rights as an independent power, has yet been made. In the view taken by this government, the inquiry whether the vessel was in the employment of those who were prosecuting an unauthorized war against that Province, or was engaged by the owner in the business of transporting passengers to and from Navy Island in hopes of private gain, which was most probably the case, in no degree alters the real question at issue between the two governments. This government can never concede to any foreign government the power, except in a case of the most urgent and extreme necessity, of invading its territory, either to arrest the persons or destroy the property of those who may have violated the municipal laws of such foreign government, or have disregarded their obligations arising under the law of nations. The territory of the United States must be regarded as sacredly secure against all such invasions, until they shall voluntarily acknowledge their inability to aquit themselves of their duties to others. And in announcing this sentiment, I do but affirm a principle which no nation on earth would be more ready to vindicate, at all hazards, than the people and government of Great Britain."

The finances were in a bad condition, and the President chiefly referred to the report of the Secretary of the Treasury upon them. Of the loan of twelve millions authorized at the previous session, only five millions and a half had been taken – being the first instance, and the last in our financial history in which, in time of peace, our government was unable to borrow money. A deficiency existed in the revenues of the year, and for the ensuing year that deficiency was estimated, would amount to a fraction over fourteen millions of dollars. To meet this large deficit the secretary recommended – first, an extension of the term for the redeemability of the remainder of the authorized loan, amounting to $6,500,000. Secondly, the re-issue of the five millions of treasury notes authorized at the previous session. Thirdly, the remainder ($2,718,570) to be made up by additional duties on imported articles. While recommending these fourteen millions and a quarter to be raised by loans, treasury notes, and duties, the President recommended the land revenue should still remain as a fund for distribution to the States, and was solicitous that, in the imposition of new duties, care should be taken not to impair the mutual assurance for each other's life which the land distribution bill, and the compromise clause contained in the tariff bill of the extra session provided for each other – saying: "It might be esteemed desirable that no such augmentation of the duties should take place as would have the effect of annulling the land proceeds distribution act of the last session, which act it declared to be inoperative the moment the duties are increased beyond 20 per centum – the maximum rate established by the compromise act." This recommendation, so far as it applied to the compromise act, was homage to the dead; and so far as it related to continuing the distribution of the land revenue was, probably, the first instance in the annals of nations in which the chief magistrate of a country has recommended the diversion and gratuitous distribution of a large branch of its revenues, recommending at the same time, money to be raised by loans, taxes, and government notes to supply the place of that given away. The largeness of the deficiency was a point to be accounted for; and that was done by showing the great additional expenses to be incurred – and especially in the navy, for which the new secretary (Mr. Upshur) estimated enormously, and gave rise to much searching discussion in Congress: of which, in its place. But the chief item in the message was another modification of the fiscalities of the extra session, with a new name, and an old countenance upon it, except where it was altered for the worse. This new plan was thus introduced by the President:

"In pursuance of a pledge given to you in my last message to Congress, which pledge I urge as an apology for adventuring to present you the details of any plan, the Secretary of the Treasury will be ready to submit to you, should you require it, a plan of finance which, while it throws around the public treasure reasonable guards for its protection, and rests on powers acknowledged in practice to exist from the origin of the government, will, at the same time, furnish to the country a sound paper medium, and afford all reasonable facilities for regulating the exchanges. When submitted, you will perceive in it a plan amendatory of the existing laws in relation to the Treasury department – subordinate in all respects to the will of Congress directly, and the will of the people indirectly – self-sustaining should it be found in practice to realize its promises in theory, and repealable at the pleasure of Congress. It proposes by effectual restraints, and by invoking the true spirit of our institutions, to separate the purse from the sword; or more properly to speak, denies any other control to the President over the agents who may be selected to carry it into execution, but what may be indispensably necessary to secure the fidelity of such agents; and, by wise regulations, keeps plainly apart from each other private and public funds. It contemplates the establishment of a Board of Control at the seat of government, with agencies at prominent commercial points, or wherever else Congress shall direct, for the safe-keeping and disbursement of the public moneys, and a substitution, at the option of the public creditor, of treasury notes, in lieu of gold and silver. It proposes to limit the issues to an amount not to exceed $15,000,000 – without the express sanction of the legislative power. It also authorizes the receipt of individual deposits of gold and silver to a limited amount, and the granting certificates of deposit, divided into such sums as may be called for by the depositors. It proceeds a step further, and authorizes the purchase and sale of domestic bills and drafts, resting on a real and substantial basis, payable at sight, or having but a short time to run, and drawn on places not less than one hundred miles apart – which authority, except in so far as may be necessary for government purposes exclusively, is only to be exerted upon the express condition, that its exercise shall not be prohibited by the State in which the agency is situated."

This was the prominent feature of the message, and appeared to Mr. Benton to be so monstrous and dangerous that it ought not to be allowed to get out of the Senate without a mark of reprobation should be first set upon it. The moment the reading was finished, the usual resolve was offered to print extra copies, when he rose and inveighed against the new fiscality with great vehemence, saying:

"He could not reconcile it to himself to let the resolution pass without making a few remarks on that part of the message which related to the new fiscal agent. Looking at that feature of it, as read, he perceived that the President gave an outline of his plan, leaving it to the Secretary of the Treasury to furnish the details in his report. He (Mr. Benton) apprehended that nothing in those details could reconcile him to the project, or in any manner meet his approbation. There were two main points presented in the plan, to which he never could agree – both being wholly unconstitutional and dangerous. One was that of emitting bills of credit, or issuing a treasury currency. Congress had no constitutional authority to issue paper money, or emit federal bills of credit; and the other feature is to authorize this government to deal in exchanges. The proposition to issue bills of credit, when under consideration at the formation of the constitution, was struck out with the express view of making this government a hard money government – not capable of recognizing any other than a specie currency – a currency of gold and silver – a currency known and valued, and equally understood by every one. But here is a proposition to do what is expressly refused to be allowed by the framers of the constitution – to exercise a power not only not granted to Congress, but a power expressly denied. The next proposition is to authorize the federal government to deal in and regulate exchanges, and to furnish exchange to merchants. This is a new invention – a modern idea of the power of this government, invented by Mr. Biddle, to help out a national bank. Much as General Hamilton was in favor of paper money, he never went the length of recommending government bills of credit, or dealings in exchange by the United States Treasury. The fathers of the church, Macon, and John Randolph, and others, called this a hard money government: they objected to bank paper; but here is government paper; and that goes beyond Hamilton, much as he was in favor of the paper system. The whole scheme making this government a regulator of exchange – a dealer in exchange – a furnisher of exchange – is absurd, unconstitutional, and pernicious, and is a new thing under the sun.

"Now he (Mr. Benton) objected to this government becoming a seller of exchange to the country (which is transportation of money), for which there is no more authority than there is for its furnishing transportation of goods or country produce. There is not a word in the constitution to authorize it – not a word to be found justifying the assumption. The word exchange is not in the constitution. What does this message propose? Congress is called upon to establish a board with agencies, for the purpose of furnishing the country with exchanges. Why should not Congress be also called on to furnish that portion of the community engaged in commerce with facilities for transporting merchandise? The proposition is one of the most pernicious nature, and such as must lead to the most dangerous consequences if adopted.

"The British debt began in the time of Sir Robert Walpole, on issues of exchequer bills – by which system the British nation has been cheated, and plunged irretrievably in debt to the amount of nine hundred millions of pounds. The proposition that the government should become the issuer of exchequer notes, is one borrowed from the system introduced in England by Sir Robert Walpole, whose whig administration was nothing but a high tory administration of Queen Anne: and infinitely worse; for Walpole's exchequer bills were for large sums, for investment: this scheme goes down to five dollar notes for common and petty circulation. He (Mr. Benton) had much to say on this subject, but this was not the time for entering at large into it. This perhaps was not the proper occasion to say more; nor would it, he considered, be treating the President of the United States with proper respect to enter upon a premature discussion. He could not, however, in justice to himself, allow this resolution to pass without stating his objections to two such obnoxious features of the proposed fiscality, looking, as he did, upon the whole thing as one calculated to destroy the whole structure of the government, to change it from the hard money it was intended to be, to the paper money government it was intended not to be, and to mix it up with trade, which no one ever dreamed of. He (Mr. Benton) had on another occasion stated that this administration would go back not only to the federal times of '98, but to the times of Sir Robert Walpole and Queen Anne, and the evidence is now before us.

"He (Mr. Benton) had only said a few words on this occasion, because he could not let the proposition to sanction bills of credit go without taking the very earliest opportunity of expressing his disapprobation, and denouncing a system calculated to produce the same results which had raised the funded debt of Great Britain from twenty-one millions to nine hundred millions of pounds. He should avail himself of the first appropriate opportunity to maintain the ground he had assumed as to the identity of this policy with that of Walpole, by argument and references, that this plan of the President's was utterly unconstitutional and dangerous – part borrowed from the system of English exchequer issues, and part from Mr. Biddle's scheme of making the federal government an exchange dealer – though Mr. Biddle made the government act indirectly through a board of bank directors, and this makes it act directly through a board of treasury directors and their agents.

"This is the first time that a formal proposition has been made to change our hard money government (as it was intended to be) into a paper money machine; and it is the first time that there has been a proposal to mix it up with trade and commerce, by making it a furnisher of exchanges, a bank of deposit, a furnisher of paper currency, and an imitator of the old confederation in its continental bills and a copyist of the English exchequer system. Being the first time these unconstitutional and pernicious schemes were formally presented to Congress, he felt it to be his duty to disclose his opposition to them at once. He would soon speak more fully."

The President in his message referred to the accompanying report of the Secretary of the Treasury (Mr. Walter Forward), for the details of his plan; and in looking at these they were found to comprise all the features of a bank of circulation, a bank of deposit, and a bank of discount upon bills of exchange – all in the hands of the government, and they to become the collectors and keepers of the public moneys, and the furnishers of a national paper money currency, in sums adapted to common dealings, both to the people and the federal government. It was a revolting scheme, and fit for instant condemnation, but in great danger of being adopted from the present predominance of that party in all the departments of the government which was so greatly addicted to the paper system.

CHAPTER XC.

THIRD PLAN FOR A FISCAL AGENT, CALLED EXCHEQUER BOARD: MR. BENTON'S SPEECH AGAINST IT: EXTRACTS

Mr. President: – I have said on several occasions since the present administration was formed, that we had gone back not merely to the federal times of General Hamilton, but far beyond them – to the whig times of Sir Robert Walpole, and the tory times of Queen Anne. When I have said this I did not mean it for sarcasm, or for insult, or to annoy the feelings of those who had just gotten into power. My aim was far higher and nobler – that of showing the retrograde movement which our government was making, and waking up the country to a sense of its dangers before it was too late; and to the conviction of the necessity of arresting that movement, and recovering the ground which we have lost. When I had said that we had gone back to the Walpole and Queen Anne times of the British government, I knew full well the extent of the declaration which I had made, and the obligation which I had imposed on myself to sustain my assertion, and I knew that history would bear me out in it. I knew all this; and I felt that if I could show to the American people that we had retrograded to the most calamitous period of British history – the period from which her present calamities all date – and that we were about to adopt the systems of policy which she then adopted, and which has led to her present condition; I felt that if I could do this, I might succeed in rousing up the country to a sense of its danger before it was too late to avoid the perils which are spread before us. The administration of Sir Robert Walpole was the fountain-head of British woes. All the measures which have led to the present condition of the British empire, and have given it more debt and taxes, more paupers, and more human misery than ever before was collected under the sway of one sceptre: all these date from the reigns of the first and second George; when this minister, for twenty-five years, was the ruler of parliament by means of the moneyed interest, and the ruler of kings by beating the tories at their own game of non-resistance and passive obedience to the royal will. The tories ruled under Queen Anne: they went for church and state, and rested for support on the landed interest. The whigs came into power with the accession of George the First: they went for bank and state; and rested for support on the moneyed interest. Sir Robert Walpole was the head of the whig party; and immediately became the favorite of that monarch, and afterwards of his successor; and, availing himself during that long period of power of all the resources of genius, unimpeded by the obstacle of principles, he succeeded in impressing his own image upon the age in which he lived, and giving to the government policy the direction which it has followed ever since. Morals, politics, public and private pursuits, all received the impress of the minister's genius; and what that genius produced I will now proceed to show: I read from Smollet's continuation of Hume: