Thirty Years' View (Vol. II of 2)

If there were a thousand constitutional provisions in favor of paper money, I should still be against it – against the thing itself, per se and propter se – on account of its own inherent baseness and vice. But the Constitution is against it – clearly so upon its face; upon its history; upon its early practice; upon its uniform interpretation. The universal expression at the time of its adoption was, that the new government was a hard money government, made by hard money men, and that it was to save the country from the curse of paper money. This was the universal language – this the universal sentiment; and this hard money character of the new government was one of the great recommendations in its favor, and one of the chief inducements to its adoption. All the early action of the government conformed to this idea – all its early legislation was as true to hard money as the needle is to the pole. The very first act of Congress for the collection of duties on imports, passed in the first year of the new government's existence, and enacted by the very men who had framed the Constitution – this first act required those duties to be paid "in gold and silver coin only;" the word only, which is a contraction for the old English onely, being added to cut off the possibility of an intrusion, or an injection of a particle of paper money into the Treasury of the United States. The first act for the sale of public lands required them to be paid for in "specie" – the specie circular of 1836 was only the enforcement of that act; and the hard money clause in the independent treasury was a revival of these two original and fundamental revenue laws. Such were the early legislative interpretations of the Constitution by the men who made it; and corresponding with these for a long time after the commencement of the government, were the interpretations of all public men, and of no one more emphatically than of him who is now the prominent member of this administration, and to whose hand public opinion attributes the elaborate defence of the Cabinet Exchequer plan which has been sent down to us. In two speeches, delivered by that gentleman in the House of Representatives in the year 1816, he thus expressed himself on the hard money character of our government, and on the folly and danger of the paper system:

"No nation had a better currency than the United States. There was no nation which had guarded its currency with more care: for the framers of the Constitution and those who had enacted the early statutes on the subject, were hard money men. They had felt and duly appreciated the evils of a paper medium: they, therefore, sedulously guarded the currency of the United States from debasement. The legal currency of the United States was gold and silver coin: this was a subject in regard to which Congress had run into no folly. Gold and silver currency was the law of the land at home, and the law of the world abroad: there could, in the present condition of the world, be no other currency."

So spake the present Secretary of State in February, 1816; and speaking so, he spoke the language of the Constitution, of the statesman, and of the enlightened age in which we live. He was right in saying that Congress, up to that time, had run into no folly in relation to the currency; that is to say, had not attempted to supersede the hard money of the Constitution by a national currency of paper. I can say the same for Congress up to the present day. Can the Secretary answer in like manner for the cabinet of which he is a member? Can he say of it, that it has run into no folly in relation to the currency? The secretary is right again in saying that, in the present condition of the world, there can be no other currency than gold and silver. Certainly he is right. Gold and silver is the measure of values. The actual condition of the world requires that measure to be uniform and universal. The whole world is now in a state of incessant intercommunication. Commercial, social, political relations are universal. Dealings and transactions are immense. All nations, civilized and barbarian, acknowledge the validity of the gold and silver standard; and the nation that should attempt to establish another, would derange its connections with the world, and put itself without the pale of its monetary system. The Secretary was right in saying that, in the present condition of the world, in the present state of the universal intercommunications of all mankind, there could be no measure of values but that which was universally acknowledged, and that all must conform to that measure. In this he showed a grasp of mind – a comprehension and profundity of intellect – which merits encomium, and which casts far into the shade the lawyer-like argument, in the shape of a report, which has been sent down to us.

The senator from Virginia [Mr. Rives] felicitates himself upon the character of these proposed exchequer bills, because they are not to be declared by law to be a legal tender: as if there was any necessity for such a declaration! Far above the law of the land is the law of necessity! far above the legal tender, which the statute enacts, is the forced tender which necessity compels. There is no occasion for the statutory enactment: the paper will soon enact the law for itself – that law which no power can resist, no weakness can shun, no art elude, no cunning escape. It is the prerogative of all paper money to expel all hard money; and then to force itself into every man's hand, because there is nothing else for any hand to receive. It is the prerogative of all paper money to do this, and of government paper above all other. Let this government go into the business of paper issues: let it begin to stamp paper for a currency, and it will quickly find itself with nothing but paper on its hands; – paper to pay out – paper to receive in; – the specie basis soon gone – and the vile trash depreciating from day to day until it sinks into nothing, and perishes on the hands of the ignorant, the credulous, and the helpless part of the community.

The same senator [Mr. Rives] consoles himself with the small amount of these exchequer bills which are to be issued – only fifteen millions of dollars. Alas! sir, does he recollect that that sum is seven times the amount of our first emission of continental bills? that it is fifteen times the amount of Sir Robert Walpole's first emission of exchequer bills? and double the amount of the first emission of the French assignats? Does he consider these things, and recollect that it is the first step only which costs the difficulty? and that, in the case of government paper money, the subsequent progress is rapid in exact proportion to the difficulty of the first step? Does he not know that the first emission of our continental bills was two millions of dollars, and that in three years they amounted to two hundred millions? that the first issue of Sir Robert Walpole's exchequer bills was the third of a million, and that they have since exceeded a thousand millions? that the first emission of assignats was the third of a milliard of francs, and that in seven years they amounted to forty-five thousand milliards? Thus it has been, and thus it will be. The first issues of government paper are small, and with difficulty obtained, and upon plausible pretexts of necessity and relief. The subsequent issues are large, and obtained without opposition, and put out without the formality of an excuse. This is the course, and thus it will be with us if we once begin. We propose fifteen millions for the start: grant it: it will soon be fifteen hundred millions! and those who go to that excess will be far less blamable than those who made the first step.

I have said that the present administration have gone back far beyond the times of General Hamilton – that they have gone to the times of Sir Robert Walpole; and I prove it by showing how faithfully they copy his policy in pursuing the most fatal of his measures. Yes, sir, they have gone back not merely far beyond where General Hamilton actually stood, but to the point to which he refused to go. He refused to go to government paper money. That great man, though a friend to bank paper, was an enemy to government paper. He condemned and deprecated the whole system of government issues. He has left his own sentiments on record on this point, and they deserve in this period of the retrogression of our government to be remembered, and to be cited on this floor. In his report on a national bank in 1791, he ran a parallel between the dangers of bank paper and government paper, assigning to the latter the character of far greatest danger and mischief – an opinion in which I fully concur with him. In that report, he thus expressed himself on the dangers of government paper:

"The emitting of paper money by the authority of the government is wisely prohibited to the individual States by the National Constitution: and the spirit of the prohibition should not be disregarded by the government of the United States. Though paper emissions, under a general authority, might have some advantages not applicable, and be free from disadvantages which are applicable, to the like emissions by the States separately, yet they are of a nature so liable to abuse – and, it may even be affirmed, so certain of being abused – that the wisdom of the government will be shown in never trusting itself with the use of so seducing and dangerous an expedient. The stamping of paper is an operation so much easier than the laying of taxes, that a government in the practice of paper emissions would rarely fail, in any such emergency, to indulge itself too far in the employment of that resource, to avoid, as much as possible, one less auspicious to present popularity. If it should not even be carried so far as to be rendered an absolute bubble, it would at least be likely to be extended to a degree which would occasion an inflated and artificial state of things, incompatible with the regular and prosperous course of the political economy."

A division has taken place in the great whig party on this point. It has split into two wings – a great, and a small wing. The body of the party stand fast on the Hamiltonian ground of 1791: a fraction of the party have slid back to the Walpole ground of 1720. The point of difference between them is a government bank and government paper on one hand, and a banking company under a national charter, issuing bank notes, on the other. This is the point of difference, and it is a large one, very visible to every eye; and I am free to say that, with all my objections to the national bank and its paper, I am far more opposed to government banking, and to government issues of paper money.

The Tyler-Webster whigs are for government banking – for making the transit from corporation credit, no longer available, to government credit, which is to stand the brunt of new follies and new extravagances. They go for the British exchequer system, with all the folly and degradation of modern banking superadded and engrafted upon it. And what are the pretexts for this flagrant attempt? The same that were urged by the scrivener, John Blunt, in favor of his South Sea bubble – and by the gambler, John Law, in favor of the Mississippi scheme. To relieve the public distress – to aid the government and the people – to make money plenty, and to raise the price of property and wages: these are the pretexts which usher in our exchequer scheme, and which have ushered in all the paper money bubbles and projects which have ever afflicted and disgraced mankind. Relief to the people has been the pretext for the whole; and they have all ended in the same way – in the enrichment of sharpers – the plunder of nations – and the shame of governments. All these schemes have been brought forward in the same way, and although base upon their face, and clearly big with shame and ruin, and opposed by the wise and good of the times, yet there seem to be seasons of national delusion when the voice of judgment, reason, and honor is drowned under the clamor of knaves and dupes; and when the highest recommendation of a new plan is its absolute folly, knavery, and audacity. Thus it was in England during the reign of the moneyed corporations under the protection of Walpole. Wise men opposed all the mad schemes of that day, and exposed in advance all their disastrous and disgraceful issues. Mr. Shippen, Sir Joseph Jekyll, Mr. Barnard, Sir William Wyndham, Mr. Pulteney, Lord Morpeth (that Howard blood which has not yet degenerated), all these and many others opposed the South Sea, exchequer issues, and other mad schemes of their day – to be overpowered then, but to be remembered, and quoted with honor now. The chancellor of France, the wise and virtuous D'Aguesseau, was exiled from Paris by the Regent Duke of Orleans for opposing and exposing the Mississippi scheme of the gambler, John Law; but his name lives in the pantheon of history; and I take a pleasure in citing it here, in the American Senate, as well in honor to him, as to encourage others to sacrifice themselves in the noble task of resisting the mad delusions of the day. Every nation has its seasons of delusion. They seem to come, like periodical epidemics, once in so many ages or centuries; and while they rage, neither morals nor reason can make head against them. The have to run out. We have just had our season of this delusion, when every folly, from a national bank whose notes were to circulate in China, to the morus multicaulis whose leaves were to breed fortunes to the envied possessors; when every such folly had its day of triumph and exultation over reason, judgment, morals and common sense. Happily this season is passing away – the delusion is wearing off – before this cabinet plan of a government bank, with its central board, its fifty-two branches, its national engine to strike paper, its brokerage and exchange dealings, its Cheapside and Change-Alley operations in real business transactions, its one-half of one per centum profits, its three dollars in paper money to any one who was fool enough to deposit one dollar in the hard: happily our season of delusion is passing off before this monstrous scheme was presented. Otherwise, its adoption would have been inevitable. Its very monstrosity would have made it irresistibly captivating to the diseased public appetite if presented while still in its morbid state.

But the senator from Virginia who sits over the way [Mr. Rives], who has spoken in this debate, and who appears as a quasi defender of this cabinet plan of relief, he demands if the senator from Missouri (my poor self) will do nothing to relieve the distress of the people and of the government? He puts the question to me, and I answer it readily; yes! I will do my part towards relieving this distress, but not exactly in the mode which he seems to prefer – not by applying a cataplasm of lamp-black and rags to the public wounds! whether that cataplasm should be administered by a league of coon-box banks in the States, or by a Biddle king bank in Philadelphia, or by a Walpole exchequer bank in Washington city. I would relieve the distress by the application of appropriate remedies to notorious diseases – a bankrupt act to bankrupt banks – taxation to bank issues – restoration of the land revenue to its proper destination – the imposition of economy upon this taxing, borrowing, squandering, gold-hating, paper-loving administration; and by restoring, as soon as possible, the reign of democracy, economy, and hard money.

The distress! still the distress. Distress, still the staple of all the whig speeches made here, and of all the cabinet reports which come down to us. Distress is the staple of the whole. "Motley is their only wear." Why, sir, I have heard about that distress before; and I am almost tempted to interrupt gentlemen in the midst of their pathetic rehearsals as the Vicar of Wakefield interrupted Jenkinson in the prison, when he began again the same learned dissertation upon the cosmogony or creation of the world; and gave him the same quotations from Sanconiathan, Manetho, Berosus, and Lucanus Ocellus, with which he entertained the good old Vicar at the fair, while cheating him out of Blackberry, after having cheated Moses out of the colt. You know the incident, said Mr. B. (addressing himself to Mr. Archer, who was nodding recognition), you remember the incident, and know the Vicar begged pardon for interrupting so much learning, with the declaration of his belief that he had had the honor to hear it all before. In like manner, I am almost tempted to stop gentlemen with a beg-pardon for interrupting so much distress, and declaring my belief that I have heard it all before. Certain it is, that for ten years past I have been accustomed to hear the distress orations on this floor; and for twenty-two years I have been accustomed to see distress in our country; but never have I seen it, or heard of it, that it did not issue from the same notorious fountain – the MONEYED CORPORATIONS – headed and conducted by the Juggernaut of federal adoration, the Biddle King Bank of the United States! I have seen this distress for two and twenty years; first, from 1819 to 1826; then again in 1832 – '33 – '34 – '37 – '39; and I see something of it now. The Bank of the United States commenced the distress in 1819, and gave a season of calamity which lasted as long as one of the seven years' plagues of Egypt. It was a seven years' agony; but at that time distress was not the object, but only the effect of her crimes and follies. In 1832 she renewed the distress as an object per se and propter se to force a renewal of her charter. In 1833-'34 she entered upon it with new vigor – with vast preparation – upon an immense scale – and all her forces – to coerce a restoration of the deposits, which the patriot President had saved by taking from her. In 1837 she headed the conspiracy for the general suspension (and accomplished it by the aid of the deposit distribution act) for the purpose of covering up and hiding her own insolvency in a general catastrophe, and making the final, agonizing death-struggle, to clutch the re-charter. In 1839 she forced the second suspension (which took place all south and west of New York) and endeavored to force it all north and east of that place, and make it universal, in order to conceal her own impending bankruptcy. She failed in the universality of this second suspension only for want of the means and power which the government deposits would have given her. She succeeded with her limited means, and in her crippled condition, over three-fourths of the Union; and now the only distress felt is in the places which have felt her power; – in the parts of the country which she has regulated – and arises from the institutions which have followed her lead – obeyed her impulse – imitated her example – and now keep up, for their own profit, and on their own account, the distress of which they were nothing but the vicarious agents in the beginning. Sir, there has been no distress since 1819 which did not come from the moneyed corporations; and since 1832, all the distress which we have seen has been factitious and factious – contrived of purpose, made to order, promulgated upon edict – and spread over the people, in order to excite discontents against the administration, to overturn the democracy, to re-establish federalism, to unite bank and state – and to deliver up the credit and revenue of the Union, and the property and industry of the people, to the pillage and plunder of the muckworm nobility which the crimes of the paper system have made the lords of the land. This is the only distress we have seen; and had it not been that God had given our country a Jackson, their daring schemes would all have succeeded; and we and our children, and all the property and labor of our country, would have been as completely tributary to the moneyed corporations of America, as the people of Great Britain are to the Change-alley lords who hold the certificates of their immense national debt.

Distress! – what, sir, are not the whigs in power, and was not all distress to cease when the democracy was turned out? Did they not carry the elections? Has Mr. Van Buren not gone to Kinderhook? Is General Jackson not in the Hermitage? Are democrats not in the minority in Congress, and expelled from office every where? Were not "Tippecanoe and Tyler too" both elected? Is not whiggery in entire possession of the government? Have they not had their extra session, called to relieve the country, and passed all the relief measures, save one? – all save one! – all except their national bank, of which this fine exchequer bank is to be the metempsychosis.

The cry is distress! and the remedy a national poultice of lamp-black and rags! This is the disease, and this the medicine. But let us look before we act. Let us analyze the case – examine the pathology of the disease – that is the word, I believe (looking at Dr. Linn, who nodded assent), and see its cause and effect, the habits and constitution of the patient, and the injuries he may have suffered. The complaint is, distress: the specifications are, depreciated currency, and deranged exchanges. The question is, where? all over the Union? not at all – only in the South and West. All north and east of New York is free from distress – the exchanges fair – the currency at par: all south and west of that city the distress prevails – the exchanges (as they are called) being deranged and the currency depreciated. Why? Because, in one quarter – the happy quarter – the banks pay their debts: in the other – the distressed quarter – they refuse to pay. Here then is the cause, and the effect. This is the analysis of the case – the discovery of the nature and locality of the disease – and the key to its cure. Make the refractory banks comply with their promises; and there is an end of depreciated paper and deranged exchanges, and of all the distress which they create; and that without a national bank, or its base substitute, an exchequer bank; or a national institution of any kind to strike paper money. Make the delinquent banks pay up, or wind up. And why not? Why should not the insolvent wind up, and the solvent pay up? Why should not the community know the good from the bad? Suspension puts all on a level, and the community cannot distinguish between them. Our friend Sancho (looking at Mr. Mouton) has a proverb that suits the case: "De noche todos los gatos son pardos."

"M. Mouton: 'De nuit tous les chats sont gris.'"

"Mr. Buchanan: What is all that?"

"Mr. Benton: It is this: Our friend, Sancho Panza, says that, in the dark all the cats are of one color. [A laugh.] So of these banks. In a state of suspension they are all of one credit; but as the light of a candle soon discriminates the black cats from the white ones, so would the touch of a bankrupt act speedily show the difference between a rotten bank and a solvent one.

But currency – currency – a national currency of uniform value, and universal circulation: this is what modern whigs demand, and call upon Congress to give it; meaning all the while a national currency of paper money. I deny the power of Congress to give it, and aver its folly if it had. The word currency is not in the constitution, nor any word which can be made to signify paper money. Coin is the only thing mentioned in that instrument; and the only power of Congress over it is to regulate its value. It is an interpolation, and a violation of truth to say that the constitution authorizes Congress to regulate the value of paper money, or to create paper money. It is a calumny upon the constitution to say any such thing; and I defy the whole phalanx of the paper money party to produce one word in that instrument to justify their imputation. Coin, and not paper, is the thing to be regulated; coin, and not paper, is the currency mentioned and intended; and this coin it is the duty of Congress to preserve, instead of banishing it from circulation. Paper banishes coin; and by creating, or encouraging paper, Congress commits a double violation of the constitution; first, by favoring a thing which the constitution condemns; and, secondly, by destroying the thing which it meant to preserve. But the paper money party say there is not gold and silver enough in the world to answer the purposes of a currency; and, therefore, they must have paper. I answer, if this was true, we must first alter our constitution before we can create, or adopt paper money. But it is not true! the assertion is unfounded and erroneous to the last degree, and implies the most lamentable ignorance of the specie resources of commercial and agricultural countries. The world happens to contain more specie than such countries can use; and it depends upon each one to have its share when it pleases. This is an assertion as easily proved as made; and I proceed to the proof of it, because it is a point on which there is much misunderstanding; and on which the public good requires authentic information. I will speak first of our own country, and of our own times – literally, my own times.