Thirty Years' View (Vol. I of 2)

"Such, then, is the progress of the distribution spirit; a cormorant appetite, growing as it feeds, ravening as it gorges; seizing the appropriated moneys, and leaving the federal government to starve upon crumbs, and to die of inanition. But this appetite is not the sole cause for this seizure. There is another reason for it, connected with the movements in this chamber, and founded in the deep-seated law of self-preservation. For six months the public mind has been stimulated with the story of sixty millions of surplus money in the Treasury; and two months ago, the grave Senate of the United States carried the rash joke of that illusory asseveration so far as to pass a bill to commence the distribution of that vast sum. It was the land bill which was to do it, commencing its swelling dividends on the 1st day of July, dealing them out every ninety days, and completing the splendid distribution of prizes, in the sixty-four million lottery, in eighteen months from the commencement of the drawing. It was two months ago that we passed this bill; and all attempts then made to convince the people that they were deluded, were vain and useless. Sixty-four millions they were promised, sixty-four millions they were to have, sixty-four millions they began to want; and slates and pencils were just as busy then in figuring out the dividends of the sixty-four millions, to begin on the 1st of July, as they now are in figuring out the dividends under the forty, fifty, and sixty millions, which are to begin on the 1st of January next. And now behold the end of the first chapter. The 1st of July is come, but the sixty-four millions are not in the Treasury! It is not there; and any attempt to commence the distribution of that sum, according to the terms of the land bill, would bankrupt the Treasury, stop the government, and cause Congress to be called together, to levy taxes or make loans. So much for the land bill, which two months ago received all the praises which are now bestowed upon the deposit bill. So the drawing had to be postponed, the performance had to be adjourned, and the 1st of January was substituted for the 1st of July. This gives six months to go upon, and defers the catastrophe of the mountain in labor until the presidential election is over. Still the first of January must come; and the ridicule would be too great, if there was nothing, or next to nothing, to divide. And nothing, or next to nothing, there would be, if the appropriations were fairly made, and made in time, and if nothing but a surplus was left to divide. There would be no more in the deposit bank, in that event, than has usually been in the Bank of the United States – say ten, or twelve, or fourteen, or sixteen millions; and from which, in the hands of a single bank, none of those dangers to the country were then seen which are now discovered in like sums in three dozen unconnected and independent banks. Even after all the delays and reductions in the appropriations, the surplus will now be but a trifle – such a trifle as must expose to ridicule, or something worse, all those who have tantalized the public with the expectation of forty, fifty, or sixty millions to divide. To avoid this fate, and to make up something for distribution, then, the unexpended balances have been fallen upon; the law of 1795 is nullified; the fiscal year is changed; the policy of the government subverted; reason, justice, propriety outraged; all contracts, labor, service, salaries cut off, interrupted, or reduced; appropriations recaptured, and the government paralyzed. Sir, the people are deceived; they are made to believe that a surplus only, an unavoidable surplus, is to be divided, when the fact is that appropriated moneys are to be seized.

"Sir, I am opposed to the whole policy of this measure. I am opposed to it as going to sap the foundations of the Federal Government, and to undo the constitution, and that by evasion, in the very point for which the constitution was made. What is that point? A Treasury! a Treasury! a Treasury of its own, unconnected with, and independent of the States. It was for this that wise and patriotic men wrote, and spoke, and prayed for the fourteen years that intervened from the declaration of independence, in 1776, to the formation of the constitution in 1789. It was for this that so many appeals were made, so many efforts exerted, so many fruitless attempts so long repeated, to obtain from the States the power of raising revenue from imports. It was for this that the convention of 1787 met, and but for this they never would have met. The formation of a federal treasury, unconnected with the States, and independent of the States, was the cause of the meeting of that convention; it was the great object of its labors; it was the point to which all its exertions tended, and it was the point at which failure would have been the failure of the whole object of the meeting, of the whole frame of the general government, and of the whole design of the constitution. With infinite labor, pains, and difficulty, they succeeded in erecting the edifice of the federal treasury; we, not builders, but destroyers, "architects of ruin," undo in a night what they accomplished in many years. We expunge the federal treasury; we throw the federal government back upon States for supplies; we unhinge and undo the constitution; and we effect our purpose by an artifice which derides, mocks, ridicules that sacred instrument, and opens the way to its perpetual evasion by every paltry performer that is able to dethrone one word, and exalt another in its place.

"I object to the time for another reason. There is no necessity to act at all upon this subject, at this session of Congress. The distribution is not to take effect until after we are in session again, and when the true state of the treasury shall be known. Its true state cannot be known now; but enough is known to make it questionable whether there will be any surplus, requiring a specific disposition, over and beyond the wants of the country. Many appropriations are yet behind; two Indian wars are yet to be finished; when the wars are over, the vanquished Indians are to be removed to the West; and when there, either the Federal Government or the States must raise a force to protect the people from them. Twenty-five thousand Creeks, seven thousand Seminoles, eighteen thousand Cherokees, and others, making a totality of seventy-two thousand, are to be removed; and the expenses of removal, and the year's subsistence afterwards, is close upon seventy dollars per head. It is a problem whether there will be any surplus worth disposing of. The surplus party themselves admit there will be a disappointment unless they go beyond the surplus, and seize the appropriated moneys. The Senator from New-York [Mr. Wright], has made an exposition, as candid and perspicuous as it is patriotic and unanswerable, showing that there will be an excess of appropriations over the money in the treasury on the day that we adjourn; and that we shall have to depend upon the accruing revenue of the remainder of the year to meet the demands which we authorize. This is the state of the surplus question: problematical, debatable; the weight of the evidence and the strength of the argument entirely against it; time enough to ascertain the truth, and yet a determination to reject all evidence, refuse all time, rush on to the object, and divide the money, cost what it may to the constitution, the government, the good of the States, and the purity of elections. The catastrophe of the land bill project ought certainly to be a warning to us. Two months ago it was pushed through, as the only means of saving the country, as the blessed act which was to save the republic. It was to commence on the first day of July its magnificent operations of distributing sixty four millions; now it lies a corpse in the House of Representatives, a monument of haste and folly, its very authors endeavoring to supersede it by another measure, because it could not take effect without ruining the country; and, what is equally important to them, ruining themselves.

"Admitting that the year produces more revenue than is wanting, is it wise, is it statesmanlike, is it consonant with our experience, to take fright at the event, and throw the money away? Did we not have forty millions of income in the year 1817? and did we not have an empty treasury in 1819? Instead of taking fright and throwing the money away, the statesman should look into the cause of things; he should take for his motto the prayer of Virgil: Cognoscere causa rerum. Let me know the cause of things; and, learning this cause, act accordingly. If the redundant supply is accidental and transient, it will quickly correct itself; if founded in laws, alter them. This is the part not merely of wisdom, but of common sense: it was the conduct of 1817, when the excessive supply was seen to be the effect of transient causes – termination of the war and efflorescence of the paper system – and left to correct itself, which it did in two years. It should be the conduct now, when the excessive income is seen to be the effect of the laws and the paper system combined, and when legislation or regulation is necessary to correct it. Reduction of the tariff; reduction of the price of land to actual settlers; rejection of bank paper from universal receivability for public dues; these are the remedies. After all, the whole evil may be found in a single cause, and the whole remedy may be seen in a single measure. The public lands are exchangeable for paper. Seven hundred and fifty machines are at work striking off paper; that paper is performing the grand rounds, from the banks to the public lands, and from the lands to the banks. Every body, especially a public man, may take as much as his trunks can carry. The public domain is changing into paper; the public treasury is filling up with paper; the new States are deluged with paper; the currency is ruining with paper; farmers, settlers, cultivators, are outbid, deprived of their selected homes, or made to pay double for them, by public men loaded, not like Philip's ass, with bags of gold, but like bank advocates, with bales of paper. Sir, the evil is in the unbridled state of the paper system, and in the unchecked receivability of paper for federal dues. Here is the evil. Banks are our masters; not one, but seven hundred and fifty! and this splendid federal Congress, like a chained and chastised slave, lies helpless and powerless at their feet.

"Sir, I can see nothing but evil, turn on which side I may, from this fatal scheme of dividing money; not surplus money, but appropriated funds; not by an amendment, but by a derisory evasion of the constitution. Where is it to end? History shows us that those who begin revolutions never end them; that those who commence innovations never limit them. Here is a great innovation, constituting in reality – not in figure of speech, but in reality – a revolution in the form of our government. We set out to divide the surplus; we are now dividing the appropriated funds. To prevent all appropriations except to the powerful States, will be the next step; and the small States, in self-defence, must oppose all appropriations, and go for a division of the whole. They will have to stand together in the Senate, and oppose all appropriations. It will not do for the large States to take all the appropriations first, and the bulk of the distribution afterwards; and there will be no way to prevent it but to refuse all appropriations, divide out the money among the States, and let each State lay it out for itself. A new surplus party will supersede the present surplus party, as successive factions supersede each other in chaotic revolutions. They will make Congress the quæstor of provinces, to collect money for the States to administer. This will be their argument: the States know best what they need, and can lay out the money to the best advantage, and to suit themselves. One State will want roads and no canals; another canals and no roads; one will want forts, another troops; one wants ships, another steam-cars; one wants high schools, another low schools; one is for the useful arts, another is for the fine arts, for lyceums, athenæums, museums, arts, statuary, painting, music; and the paper State will want all for banks. Thus will things go on, and Congress will have no appropriation to make, except to the President, and his head clerks, and their under clerks. Even our own pay, like it was under the confederation, may be remitted to our own States. The eight dollars a day may be voted to them, and supported by the argument that they can get better men for four dollars a day; and so save half the money, and have the work better done. Such is the progress in this road to ruin. Sir, I say of this measure, as I said of its progenitor, the land bill: if I could be willing to let evil pass, that good might come of it, I should be willing to let this bill pass. A recoil, a reaction, a revulsion must take place. This confederacy cannot go to ruin. This Union has a place in the hearts of the people which will save it from nullification in disguise, as well as from nullification in arms. One word of myself. It is now ten years since schemes of distribution were broached upon this floor. They began with a senator from New Jersey, now Secretary of the navy (Mr. Dickerson). They were denounced by many, for their unconstitutionality, their corrupting tendencies, and their fatal effects upon the federal and State governments. I took my position then, have stood upon it during all the modifications of the original scheme; and continue standing upon it now. My answer then was, pay the public debt and reduce the taxes; my answer now is, provide for the public defences, reduce the taxes, and bridle the paper system. On this ground I have stood – on this I stand; and never did I feel more satisfaction and more exultation in my vote, when triumphant in numbers, than I now do in a minority of six."

The bill went to the House, and was concurred in by a large majority – one hundred and fifty-five to thirty-eight – although, under the name of distribution, there was no chance for it to pass that House. Deeming the opposition of this small minority courageous as well as meritorious, and deserving to be held in honorable remembrance, their names are here set down; to wit:

Messrs. Michael W. Ash, James M. H. Beale, Benning M. Bean, Andrew Beaumont, John W. Brown, Robert Burns, John F. H. Claiborne, Walter Coles, Samuel Cushman, George C. Dromgoole, John Fairfield, William K. Fuller, Ransom H. Gillet, Joseph Hall, Thomas L. Hamer, Leonard Jarvis, Cave Johnson, Gerrit Y. Lansing, Gideon Lee, George Loyall, Abijah Mann, jr., John Y. Mason, James J. McKay, John McKeon, Isaac McKim, Gorham Parks, Franklin Pierce, Henry L. Pinckney, John Roane, James Rogers, Nicholas Sickles, William Taylor, Francis Thomas, Joel Turrill, Aaron Vanderpoel, Aaron Ward, Daniel Wardwell, Henry A. Wise.

The bill passed the House, and was approved by the President, but with a repugnance of feeling, and a recoil of judgment, which it required great efforts of friends to overcome; and with a regret for it afterwards which he often and publicly expressed. It was a grief that his name was seen to such an act. It was a most unfortunate act, a plain evasion of the constitution for a bad purpose – soon gave a sad overthrow to the democracy – and disappointed every calculation made upon it. Politically, it was no advantage to its numerous and emulous supporters – of no disservice to its few determined opponents – only four in number, in the Senate, the two senators from Mississippi voting against it, for reasons found in the constitution of their State. To the States, it was of no advantage, raising expectations which were not fulfilled, and upon which many of them acted as realities, and commenced enterprises to which they were inadequate. It was understood that some of Mr. Van Buren's friends favored the President's approval, and recommended him to sign it – induced by the supposed effect which its rejection might have on the democratic party in the election. The opponents of the bill did not visit the President to give him their opinions, nor had he heard their arguments. If they had seen him, their opinions concurring with his own feelings and judgment, his conduct might have been different, and the approval of the act withheld. It might not have prevented the act from becoming a law, as two thirds in each House might have been found to support it; but it would have deprived the bill of the odor of his name, and saved himself from subsequent regrets. In a party point of view, it was the commencement of calamities, being an efficient cause in that general suspension of specie payments, which quickly occurred, and brought so much embarrassment on the Van Buren administration, ending in the great democratic defeat of 1840. But of this hereafter.

CHAPTER CXLIII.

RECHARTER OF THE DISTRICT BANKS – SPEECH OF MR. BENTON: THE PARTS OF LOCAL AND TEMPORARY INTEREST OMITTED

"Mr. Benton rose to oppose the passage of the bill, notwithstanding it was at the third reading, and that it was not usual to continue opposition, which seemed to be useless, at that late stage. But there were occasions when he never took such things into calculation, and when he continued to resist pernicious measures, regardless of common usages, as long as the forms of parliamentary proceeding would allow him to go on. Thus he had acted at the passing of the United States Bank charter, in 1832; thus he did at the passing of the resolution against President Jackson, in 1834; and thus he did at the passing of the famous land bill, at the present session. He had continued to speak against all these measures, long after speaking seemed to be of any avail; and, far from regretting, he had reason to rejoice at the course that he had pursued. The event proved him to be right; for all these measures, though floated through this chamber upon the swelling wave of a resistless and impatient majority, had quickly run their brief career. Their day of triumph had been short. The bank charter perished at the first general election; the condemnatory resolution was received by the continent in a tempest of execration; and the land bill, that last hope of expiring party, has dropped an abortion from the Senate. It is dead even here, in this chamber, where it originated – where it was once so omnipotent that, to speak against it, was deemed by some to be an idle consumption of time, and by others to be an unparliamentary demonstration against the ascertained will of the House. Yet, that land bill is finished. That brief candle is out. The Senate has revoked that bill; has retracted, recanted, and sung its palinode over that unfortunate conception. It has sent out a committee – an extraordinary committee of nine – to devise some other scheme for dividing that same money which the land bill divides! and, in doing so, the Senate has authentically declared a change of opinion, and a revocation of its sentiments in favor of that bill. Thus it has happened, in recent and signal cases, that, by continuing the contest after the battle seemed to be lost, the battle was in fact gained; and so it may be again. These charters may yet be defeated; and whether they will be or not, is nothing to me. I believe them to be wrong – greatly, immeasurably wrong! – and shall continue to oppose them without regard to calculations, or consequences, until the rules of parliamentary proceeding shall put an end to the contest. Mr. B. said he had moved for a select committee, at the commencement of the session, to examine into the condition of these banks, and he had done so with no other object than to endeavor to provide some checks and guards for the security of the country against the abuses and excesses of the paper system. The select committee had not been raised. The standing Committee on the District of Columbia had been charged with the subject; and, seeing that they had made a report adverse to his opinions, and brought in a bill which he could not sanction, it would be his part to act upon the meagre materials which had been placed before the Senate and endeavor to accomplish as a member of that body, what could have been attempted, with better prospects of success, as a member of a committee which had had the management of the subject.

"Mr. B. said he had wished to have been on a select committee for the charter of these banks; he wished to have revived the idea of a bank without circulation, and to have disconnected the government from the banking of the district. He had failed in his attempt to raise such a committee; and, as an individual member of the Senate, he could now do no more than mention in debate the ideas which he would have wished to have ripened into legislation through the instrumentality of a committee.

"Mr. B. said he had demonstrated that no bank of circulation ought to be authorized in this district; and, he would add, that none to furnish currency, except of large notes, ought to be authorized any where; yet what are we doing? We are breeding six little corporations at a birth, to issue $2,250,000 of paper currency: and on what terms? No bonus; no tax on the capital; none on the circulation; no reduction of interest in lieu of bonus or tax; no specie but what the stockholders please to put in; and no liability on the part of the stockholders for a failure of these corporations to redeem their notes and pay their debts. This is what we are doing; and now let us see what burdens and taxes these six corporations will impose upon the business part of the community – the productive classes among which they are to be perpetuated. First, there is the support of these six corporation governments; for every bank must have a government, like a State or kingdom; and the persons who administer these corporation governments must be paid, and paid by the people, and that according to the rates fixed by themselves and not by the people. Each of these six banks must have its president, cashier, clerks, and messengers; its notary public to protest notes; and its attorney to bring suits. The aggregate salaries, fees, and perquisites, of all these officers of the six banks will be the first tax on the people. Next comes the profits to the stockholders. The nett profits of banks are usually eight to ten per cent. at present; the gross profits are several per cent. more; and the gross profits are what the people pay. Assuming the gross profits to be twelve per cent., and the annual levy upon the community will be about $270,000. The third loss to the community will be on the fluctuations of prices of labor and property, and the rise and fall of stocks, from the expansions and contractions of currency, produced by making money plenty or scarce, as it suits the interest of the bank managers. This item cannot be calculated and depends entirely upon the moderation and consciences of the Neptunes who preside over the flux and reflux of the paper ocean; and to whom all tides, whether of ebb or flow, and all conditions of the sea, whether of calm or storm, are equally welcome, equally auspicious, and equally productive. Then come three other heads of loss to the community, and of profit to the bank: loss of notes from wear and tear, counterfeits imposed upon the people for good notes, and good notes rejected by the banks for counterfeits; and then the loss to the holders from the stoppage and failure of banks, and the shaving in of notes and stocks. Such are the burdens and taxes to be imposed upon the people to give them a paper currency, when, if the paper currency were kept away, and only large notes used, as in France, they would have a gold and silver currency without paying a tax to any body for it, and without being subject to any of the frightful evils resulting from the paper system.

"Objecting to all banks of circulation, but not able to suppress them entirely, Mr. B. suggested some ameliorations in the charters proposed to be granted to render them less dangerous to the community. 1. The liability of the stockholders for all the debts of the institution, as in the Scottish banks. 2. The bank stock to be subject to taxation, like other property. 3. To issue or receive no note of less than twenty dollars. 4. The charters to be repealable at the will of Congress: and he gave reasons for each of these improvements; and first for the liability of the stockholders. He said:

"Reasons for this liability were strong and palpable. A man that owes should pay while he has property to pay with; and it is iniquitous and unjustifiable that a bank director, or stockholder, should riot in wealth while the business part of the community should hold the bank notes which they have put into circulation, and be able to get nothing for them after the bank had closed its doors. Such exemptions are contrary to the rights of this community, and one of the great causes of the failure of banks. A liability in the stockbrokers is one of the best securities which the public can have for the correct management and solvency of the institution. The famous Scottish banks, which, in upwards of one hundred years' operations, had neither once convulsed the country with contractions and expansions, nor once stopped payment, were constituted upon this principle. All the country banks in England, and all the bankers on the continent of Europe, were liable to a still greater degree; for in them each stockholder, or partner, was liable, individually, for the whole amount of the debts of the bank. The principle proposed to be incorporated in these charters strikes the just medium between the common law principle, which makes each partner liable for the whole debts of the firm; and the corporation principle in the United States, which absolves each from all liability, and leaves the penniless and soulless carcase of a defunct and eviscerated bank alone responsible to the community. Liability to the amount of the stock was an equitable principle, and with summary process for the recovery of the amounts of notes and deposits, and the invalidity of transfers of stock to avoid this liability, would be found a good remedy for a great evil. If the stockholders in the three banks which stopped payment in this city during the panic session had been thus liable, the notes would not have been shaved out of the hands of the holders; if the bank which stopped in Baltimore at the same time, had been subject to this principle, the riots, which have afflicted that city in consequence of that stoppage, would not have taken place. Instead of these losses and riots, law and remedy would have prevailed; every stockholder would have been summoned before a justice of the peace – judgment granted against him on motion – for the amount held by the complainant; and so on, until all were paid, or he could plead that he had paid up the whole amount of his stock."