Thirty Years' View (Vol. I of 2)

"Mr. B. regretted that he had not seen in the papers any report of the argument of the senator from Virginia [Mr. Tazewell] in vindication of the right of the States to tax these branches. It was an argument brief, powerful, and conclusive – lucid as a sunbeam, direct as an arrow, and mortal as the stroke of fate to the adversary speakers. Since the delivery of that argument, they had sat in dumb show, silent as the grave, mute as the dead, and presenting to our imaginations the realization of the Abbé Sieyes's famous conception of a dumb legislature. Before the States surrendered a portion of their sovereignity to create this federal government, they possessed the unlimited power of taxation; in the act of the surrender, which is the constitution, they abridged this unlimited right but in two particulars – exports and imports – which they agreed no longer to tax, and therefore retained the taxing power entire over all other subjects. This was the substance of the argument which dumbfounded the adversary; and the distinction which was attempted to be set up between tangible and intangible, visible and invisible, objects of taxation; between franchises and privileges on one side, and material substances on the other, was so completely blasted and annihilated by one additional stroke of lightning, that the fathers of the distinction really believed that they had never made it! and sung their palinodes in the face of the House.

"The argument that these branches are necessary to enable the federal government to carry on its fiscal operations, and, therefore, ought to be independent of State legislation, is answered and expunged by a matter of fact, namely, that Congress itself has determined otherwise, and that in the very charter of the bank. The charter limits the right of the federal government to the establishment of a single branch, and that one in the District of Columbia! The branch at this place, and the parent bank at Philadelphia, are all that the federal government has stipulated for. All beyond that, is left to the bank itself; to establish branches in the States or not, as it suited its own interest; or to employ State banks, with the approbation of the Secretary of the Treasury, to do the business of the branches for the United States. Congress is contented with State banks to do the business of the branches in the States; and, therefore, authorizes the very case which gentlemen apprehend and so loudly deprecate, that New-York may refuse her assent to the continuance of the branches within her limits, and send the public deposits to the State banks. This is what the charter contemplates. Look at the charter; see the fourteenth article of the constitution of the bank; it makes it optionary with the directors of the bank to establish branches in such States as they shall think fit, with the alternative of using State banks as their substitutes in States in which they do not choose to establish branches. This brings the establishment of branches to a private affair, a mere question of profit and loss to the bank itself; and cuts up by the roots the whole argument of the necessity of these branches to the fiscal operations of the federal government. The establishment of branches in the States is, then, a private concern, and presents this question: Shall non-residents and aliens – even alien enemies, for such they may be – have a right to carry on the trade of banking within the limits of the States, without their consent, without liability to taxation, and without amenability to State legislation? The suggestion that the United States owns an interest in this bank, is of no avail. If she owned it all, it would still be subject to taxation, like all other property is which she holds in the States. The lands which she had obtained from individuals in satisfaction of debts, were all subject to taxation; the public lands which she held by grants from the States, or purchases from foreign powers, were only exempted from taxation by virtue of compacts, and the payment of five per centum on the proceeds of the sales for that exemption."

The motion of Mr. Moore was rejected, and by the usual majority.

Mr. Benton then moved to strike out so much of the bill as gave to the bank exclusive privileges, and to insert a provision making the stockholders liable for the debts of the institution; and in support of his motion quoted the case of the three Scottish banks which had no exclusive privilege, and in which the stockholders were liable, and the superior excellence of which over the Bank of England was admitted and declared by English statesmen. He said:

"The three Scottish banks had held each other in check, had proceeded moderately in all their operations, conducted their business regularly and prudently, and always kept themselves in a condition to face their creditors; while the single English bank, having no check from rival institutions, ran riot in the wantonness of its own unbridled power, deluging the country, when it pleased, with paper, and filling it with speculation and extravagance; drawing in again when it pleased, and filling it with bankruptcy and pauperism; often transcending its limits, and twice stopping payment, and once for a period of twenty years. There can be no question of the incomparable superiority of the Scottish banking system over the English banking system, even in a monarchy; and this has been officially announced to the Bank of England by the British ministry, as far back as the year 1826, with the authentic declaration that the English system of banking must be assimilated to the Scottish system, and that her exclusive privilege could never be renewed. This was done in a correspondence between the Earl of Liverpool, first Lord of the Treasury, and Mr. Robinson, Chancellor of the Exchequer, on one side, and the Governor and Deputy Governor of the Bank of England on the other. In their letter of the 18th January, 1826, the two ministers, adverting to the fact of the stoppage of payment, and repeated convulsions of the Bank of England, while the Scottish banks had been wholly free from such calamities, declared their conviction that there existed an unsound and delusive system of banking in England, and a sound and solid system in Scotland! And they gave the official assurance of the British government, that neither His Majesty's ministers, nor parliament, would ever agree to renew the charter of the Bank of England with their exclusive privileges! Exclusive privileges, they said, were out of fashion! Nor is it renewed to this day, though the charter is within nine months of its expiration!

"In the peculiar excellence of the Scottish plan, lies a few plain and obvious principles, closely related to republican ideas. First. No exclusive privileges. Secondly. Three independent banks to check and control each other, and diffuse their benefits, instead of one to do as it pleased, and monopolize the moneyed power. Thirdly. The liability of each stockholder for the amount of his stock, on the failure of the bank to redeem its notes in specie. Fourthly. The payment of a moderate interest to depositors. Upon these few plain principles, all of them founded in republican notions, equal rights, and equal justice, the Scottish banks have advanced themselves to the first rank in Europe, have eclipsed the Bank of England, and caused it to be condemned in its own country, and have made themselves the model of all future banking institutions in Great Britain. And now, it would be a curious political phenomenon, and might give rise to some interesting speculations on the advance of free principles in England, and their decline in America, if the Scottish republican plan of banking should be rejected here, while preferred there; and the British monarchial plan, which is condemned there, should be perpetuated here! and this double incongruity committed without necessity, without excuse, without giving the people time to consider, and to communicate their sentiments to their constituents, when there is four, if not six years, for them to consider the subject before final decision is required!"

The clause for continuing the exclusive privilege of the bank, was warmly contested in the Senate, and arguments against it drawn from the nature of our government, as well as from the example of the British parliament, which had granted the monopoly to the Bank of England in her previous charters, and denied it on the last renewal. It owed its origin in England to the high tory times of Queen Anne, and its extinction to the liberal spirit of the present century. Mr. Benton was the chief speaker on this point; and —

"Pointed out the clauses in the charter which granted the exclusive privilege, and imposed the restriction, which it was the object of his motion to abolish; and read a part of the 21st section, which enacted that no other bank should be established by any future law of the United States, during the continuance of that charter, and which pledged the faith of the United States to the observance of the monopoly thereby created. He said the privilege of banking, here granted, was an exclusive privilege, a monopoly, and an invasion of the rights of all future Congresses, as well as of the rights of all citizens of the Union, for the term the charter had to run, and which might be considered perpetual; as this was the last time that the people could ever make head against the new political power which raised itself in the form of the bank to overbalance every other power in the government. This exclusive privilege is contrary to the genius of our government, which is a government of equal rights, and not of exclusive privileges; and it is clearly unauthorized by the constitution, which only admits of exclusive privileges in two solitary, specified cases, and each of these founded upon a natural right, the case of authors and inventors; to whom Congress is authorized to grant, for a limited time, the exclusive privilege of selling their own writings and discoveries. But in the case of this charter there is no natural right, and it may be well said there is no limited time; and the monopoly is far more glaring and indefensible now than when first granted; for then the charter was not granted to any particular set of individuals, but lay open to all to subscribe to it; but now it is to be continued to a particular set, and many of them foreigners, and all of whom, or their assignees, had already enjoyed the privilege for twenty years. If this company succeeds now in getting their monopoly continued for fifteen years, they will so intrench themselves in wealth and power, that they will be enabled to perpetuate their charter, and transmit it as a private inheritance to their posterity. Our government delights in rotation of office; all officers, from the highest to the lowest, are amenable to that principle; no one is suffered to remain in power thirty-five years; and why should one company have the command of the moneyed power of America for that long period? Can it be the wish of any person to establish an oligarchy with unbounded wealth and perpetual existence, to lay the foundation for a nobility and monarchy in this America!

"The restriction upon future Congresses is at war with every principle of constitutional right and legislative equality. If the constitution has given to one Congress the right to charter banks, it has given it to every one. If this Congress has a right to establish a bank, every other Congress has. The power to tie the hands of our successors is nowhere given to us; what we can do our successors can; a legislative body is always equal to itself. To make, and to amend; to do, and to undo; is the prerogative of each. But here the attempt is to do what we ourselves cannot amend – what our successors cannot amend – and what our successors are forbidden to imitate, or to do in any form. This shows the danger of assuming implied powers. If the power to establish a national bank had been expressly granted, then the exercise of that power, being once exerted, would be exhausted, and no further legislation would remain to be done; but this power is now assumed upon construction, after having been twice rejected, in the convention which framed the constitution, and is, therefore, without limitation as to number or character. Mr. Madison was express in his opinions in the year 1791, that, if there was one bank chartered, there ought to be several! The genius of the British monarchy, he said, favored the concentration of wealth and power. In America the genius of the government required the diffusion of wealth and power. The establishment of branches did not satisfy the principle of diffusion. Several independent banks alone could do it. The branches, instead of lessening the wealth and power of the single institution, greatly increased both, by giving to the great central parent bank an organization and ramification which pervaded the whole Union, drawing wealth from every part, and subjecting every part to the operations, political and pecuniary, of the central institution. But this restriction ties up the hands of Congress from granting other charters. Behave as it may – plunge into all elections – convulse the country with expansions and contractions of paper currency – fail in its ability to help the merchants to pay their bonds – stop payment, and leave the government no option but to receive its dishonored notes in revenue payments – and still it would be secure of its monopoly; the hands of all future Congresses would be tied up; and no rival or additional banks could be established, to hold it in check, or to supply its place.

"Is this the Congress to do these things? Is this the Congress to impose restrictions upon the power of their successors? Is this the Congress to tie the hands of all Congresses till the year 1851? In nine months this Congress is defunct! A new and full representation of the people will come into power. Thirty additional members will be in the House of Representatives; three millions of additional people will be represented. The renewed charter is not to take effect till three years after this full representation is in power! And are we to forestall and anticipate them? Take their proper business out of their hands – snatch the sceptre of legislation from them – do an act which we cannot amend – which they cannot amend – which is irrevocable and intangible; and, to crown this act of usurpation, deliberately set about tying the hands, and imposing a restriction upon a Congress equal to us in constitutional power, superior to us in representative numbers, and better entitled to act upon the subject, because the present charter is not to expire, nor the new one to take effect, until three years after the new Congress shall be in power! It is in vain to say that this reasoning would apply to other legislative measures, and require the postponement of the land bill and the tariff bill. Both these bills require immediate decision, and therein differ from the bank bill, which requires no decision for three years to come. But the difference is greater still; for the land bill and tariff bill are ordinary acts of legislation, open to amendment, or repeal, by ourselves and successors; but the charter is to be irrevocable, unamendable, binding upon all Congresses till the year 1851. This is rank usurpation; and if perpetrated by Congress, and afterwards arrested by an Executive veto, the President will become the true representative of the people, the faithful defender of their rights, and the defender of the rights of the new Congress which will assemble under the new census.

"Mr. B. concluded his remarks by showing the origin, and also the extinction, of the doctrine in England. A tory parliament in the reign of Queen Anne had first granted an exclusive privilege to the Bank of England, and imposed a restriction upon the right of future parliaments to establish another bank; and the ministry of 1826 had condemned this doctrine, and proscribed its continuance in England. The charter granted to the old Bank of the United States and to the existing bank had copied those obnoxious clauses; but now that they were condemned in England as too unjust and odious for that monarchial country, they ought certainly to be discarded in this republic, where equal rights was the vital principle and ruling feature of all our institutions."

All the amendments proposed by the opponents of the bank being inexorably voted down, after a debate which, with some cessations, continued from January to June, the final vote was taken, several senators first taking occasion to show they had no interest in the institution. Mr. Benton had seen the names of some members in the list of stockholders; and early in the debate had required that the rule of parliamentary law should be read; which excludes the interested member from voting, and expunges his vote if he does, and his interest is afterwards discovered. Mr. Dallas said that he had sold his stock in the institution as soon as it was known that the question of the recharter would come before him: Mr. Silsbee said that he had disposed of his interest before the question came before Congress: Mr. Webster said that the insertion of his name in the list of stockholders was a mistake in a clerk of the bank. The vote was then taken on the passage of the bill, and Stood: YEAS: Messrs. Bell, of New Hampshire; Buckner, of Missouri; Chambers, of Maryland; Clay, of Kentucky; Clayton, of Delaware; Dallas of Pennsylvania; Ewing, of Ohio; Foot, of Connecticut; Frelinghuysen, of New Jersey; Hendricks, of Indiana; Holmes, of Maine; Josiah S. Johnston, of Louisiana; Knight, of Rhode Island; Naudain, of Delaware; Poindexter, of Mississippi; Prentiss, of Vermont; Robbins, of Rhode Island; Robinson, of Illinois; Ruggles, of Ohio; Seymour, of Vermont; Silsbee, of Massachusetts; Smith (Gen. Samuel), of Maryland; Sprague, of Maine; Tipton, of Indiana; Tomlinson, of Connecticut; Waggaman, of Louisiana; Webster, of Massachusetts; and Wilkins, of Pennsylvania: 28. Nays: Messrs. Benton, of Missouri; Bibb, of Kentucky; Brown, of North Carolina; Dickerson, of New Jersey; Dudley, of New-York; Ellis, of Mississippi; Forsyth, of Georgia; Grundy, of Tennessee; Hayne, of South Carolina; Hill, of New Hampshire; Kane, of Illinois; King, of Alabama; Mangum, of North Carolina; Marcy, of New-York; Miller, of South Carolina; Moore, of Alabama; Tazewell, of Virginia; Troup, of Georgia; Tyler, of Virginia; Hugh L. White, of Tennessee: 20.

CHAPTER LXVII.

BANK OF THE UNITED STATES – BILL FOR THE RENEWED CHARTER PASSED IN THE HOUSE OF REPRESENTATIVES

The bill which had passed the Senate, after a long and arduous contest, quickly passed the House, with little or no contest at all. The session was near its end; members were wearied; the result foreseen by every body – that the bill would pass – the veto be applied – and the whole question of charter or no charter go before the people in the question of the presidential election. Some attempts were made by the adversaries of the bill to amend it, by offering amendments, similar to those which had been offered in the Senate; but with the same result in one House as in the other. They were all voted down by an inexorable majority; and it was evident that the contest was political, and relied upon by one party to bring them into power; and deprecated by the other as the flagrant prostitution of a great moneyed corporation to partisan and election purposes. The question was soon put; and decided by the following votes:

Yeas. – Messrs. Adams, C. Allan, H. Allen, Allison, Appleton, Armstrong, Arnold, Ashley, Babcock, Banks, N. Barber, J. S. Barbour, Barringer, Barstow, I. C. Bates, Briggs, Bucher, Bullard, Burd, Burges, Choate, Collier, L. Condict, S. Condit, E. Cooke, B. Cooke, Cooper, Corwin, Coulter, Craig, Crane, Crawford, Creighton, Daniel, J. Davis, Dearborn, Denny, Dewart, Doddridge, Drayton, Ellsworth, G. Evans, J. Evans, E. Everett, H. Everett, Ford, Gilmore, Grennell, Hodges, Heister, Horn, Hughes, Huntington, Ihrie, Ingersoll, Irvin, Isacks, Jenifer, Kendall, H. King, Kerr, Letcher, Mann, Marshall, Maxwell, McCoy, McDuffie, McKennan, Mercer, Milligan, Newton, Pearce, Pendleton, Pitcher, Potts, Randolph, J. Reed, Root, Russel, Semmes, W. B. Shepard, A. H. Shepperd, Slade, Smith, Southard, Spence, Stanberry, Stephens, Stewart, Storrs, Sutherland, Taylor, P. Thomas, Tompkins, Tracy, Vance, Verplanck, Vinton, Washington, Watmough, E. Whittlesey, F. Whittlesey, E. D. White, Wickliffe, Williams, Young – 106.

Nays. – Messrs. Adair, Alexander, Anderson, Archer, J. Bates, Beardsley, Bell, Bergen, Bethune, James Blair, John Blair, Bouck, Bouldin, Branch, Cambreleng, Carr, Chandler, Chinn, Claiborne, Clay, Clayton, Coke, Conner, W. R. Davis, Dayan, Doubleday, Felder, Fitzgerald, Foster, Gaither, Gordon, Griffin, T. H. Hall, W. Hall, Hammons, Harper, Hawes, Hawkins, Hoffman, Hogan, Holland, Howard, Hubbard, Jarvis, Cave Johnson, Kavanagh, Kennon, A. King, J. King, Lamar, Leavitt, Lecompte, Lewis, Lyon, Mardis, Mason, McCarty, McIntire, McKay, Mitchell, Newnan, Nuckolls, Patton, Pierson, Polk, E. C. Reed, Rencher, Roane, Soule, Speight, Standifer, F. Thomas, W. Thompson, J. Thomson, Ward, Wardwell, Wayne, Weeks, Wheeler, C. P. White, Wilde, Worthington. – 84.

CHAPTER LXVIII.

THE VETO

The act which had passed the two Houses for the renewal of the bank charter, was presented to the President on the 4th day of July, and returned by him to the House in which it originated, on the 10th, with his objections. His first objection was to the exclusive privileges which it granted to corporators who had already enjoyed them, the great value of these privileges, and the inadequacy of the sum to be paid for them. He said:

"Every monopoly, and all exclusive privileges, are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank, must come directly or indirectly out of the earnings of the American people. It is due to them, therefore, if their government sell monopolies and exclusive privileges, that they should at least exact for them as much as they are worth in open market. The value of the monopoly in this case may be correctly ascertained. The twenty-eight millions of stock would probably be at an advance of fifty per cent., and command, in market, at least forty-two millions of dollars, subject to the payment of the present loans. The present value of the monopoly, therefore, is seventeen millions of dollars, and this the act proposes to sell for three millions, payable in fifteen annual instalments of $200,000 each.

"It is not conceivable how the present stockholders can have any claim to the special favor of the government. The present corporation has enjoyed its monopoly during the period stipulated in the original contract. If we must have such a corporation, why should not the government sell out the whole stock, and thus secure to the people the full market value of the privileges granted? Why should not Congress create and sell the twenty-eight millions of stock, incorporating the purchasers with all the powers and privileges secured in this act, and putting the premium upon the sales into the treasury?

"But this act does not permit competition in the purchase of this monopoly. It seems to be predicated on the erroneous idea that the present stockholders have a prescriptive right, not only to the favor, but to the bounty of the government. It appears that more than a fourth part of the stock is held by foreigners, and the residue is held by a few hundred of our citizens, chiefly of the richest class. For their benefit does this act exclude the whole American people from competition in the purchase of this monopoly, and dispose of it for many millions less than it is worth. This seems the less excusable, because some of our citizens, not now stockholders, petitioned that the door of competition might be opened, and offered to take a charter on terms much more favorable to the government and country.

"But this proposition, although made by men whose aggregate wealth is believed to be equal to all the private stock in the existing bank, has been set aside, and the bounty of our government is proposed to be again bestowed on the few who have been fortunate enough to secure the stock, and at this moment wield the power of the existing institution. I cannot perceive the justice or policy of this course. If our government must sell monopolies, it would seem to be its duty to take nothing less than their full value; and if gratuities must be made once in fifteen or twenty years, let them not be bestowed on the subjects of a foreign government, nor upon a designated or favored class of men in our own country. It is but justice and good policy, as far as the nature of the case will admit, to confine our favors to our own fellow-citizens, and let each in his turn enjoy an opportunity to profit by our bounty. In the bearings of the act before me upon these points, I find ample reasons why it should not become a law."