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Six months ago, a state of things existed highly prosperous and advantageous to the country, but liable to be injuriously affected by precisely such a cause as has now been put into operation upon it. Business was active, and carried to a great extent. Commercial credit was expanded, and the circulation of money was large.
This circulation, being of paper, of course rested on credit; and this credit was founded on banking capital, and bank deposits. The public revenues, from the time of their collection to the time of their disbursement, were in the Bank and its Branches, and, like other deposits, contributed to the means of discount. Between the Bank of the United States and the State banks, there was a degree of watchfulness, perhaps of rivalry; but there was no enmity, no hostility. All moved in their own proper spheres, harmoniously and in order.
The Secretary disturbed this state of peace. He broke up all the harmony of the system. By suddenly withdrawing all the public moneys from the Bank of the United States, he forced that Bank to an immediate correspondent curtailment of its loans and discounts. It was obliged to strengthen itself; and the State Banks, taking the alarm, were obliged to strengthen themselves also by similar measures; so that the amount of credit actually existing, and on which men were doing business, was suddenly greatly diminished. Bank accommodations were withdrawn; men could no longer fulfil their engagements by the customary means; property fell in value; thousands failed; many thousands more maintained their individual credit by enormous sacrifices; and all, being alarmed for the future, as well as distressed for the present, forbore from new transactions and new engagements. Finding enough to do to stand still, they do not attempt to go forward. This deprives the industrious and laboring classes of their occupations, and brings want and misery to their doors. This, Sir, is a short recital of cause and effect. This is the history of the first six months of the " experiment."
Mr. President, the recent measures of the Secretary, and the opinions which are said to be avowed by those who approve and support them, threaten a wild and ruthless attack on the commercial credit of the country, on that most delicate and at the same time most important agent in producing general prosperity. Commercial credit is the creation of modern times, and belongs, in its highest perfection, only to the most enlightened and best-governed nations. In the primitive ages of commerce, article is exchanged for article, without the use of money or credit. This is simple barter. But, in its progress, a symbol of property, a common measure of value, is introduced, to facilitate the exchanges of property; and this may be iron, or any other article fixed by law or by consent, but has generally been gold and silver. This, certainly, is a great advance beyond simple barter, but no greater than has been gained, in modern times, by proceeding from the mere use of money to the use of credit. Credit is the vital air of the system of modern commerce. It has done more, a thousand times, to enrich nations, than all the mines of all the world. It has excited labor, stimulated manufactures, pushed commerce over every sea, and brought every nation, every kingdom, and every small tribe, among the races of men, to be known to all the rest. It has raised armies, equipped navies, and, triumphing over the gross power of mere numbers, it has established national superiority on the foundation of intelligence, wealth, and well-directed industry. Credit is to money what money is to articles of merchandise. As hard money represents property, so credit represents hard money; and it is capable of supplying the place of money so completely, that there are writers of distinction, especially of the Scotch school, who insist that no hard money is necessary for the interests of commerce. I am not of that opinion. I do not think any Government can maintain an exclusive paper system, without running to excess, and thereby causing depreciation.
I hold the immediate convertibility of bank notes into specie to be an indispensable security to their retaining their value; but, consistently with this security, and, indeed, founded upon it, credit becomes the great agent of exchange. . It is allowed that it increases consumption, by anticipating products; and that it supplies present wants out of future means. And as it circulates commodities without the actual use of gold and silver, it not only saves much by doing away with the constant transportation of the precious metals from place to place, but accomplishes exchanges with a degree of despatch and punctuality not otherwise to be attained. All bills of exchange, all notes running upon time, as well as the paper circulation of the banks, belong to the system of commercial credit. They are parts of one great whole. And, Sir, unless we are to reject the lights of experience, and to repudiate the benefits which other nations enjoy, and which we ourselves have hitherto enjoyed, we should protect this system with unceasing watchfulness, taking care, on the one hand, to give it full and fair play, and, on the other, to guard it against dangerous excess. We shall show ourselves unskilful and unfaithful statesmen, if we do not keep clear of extremes on both sides.
It is very true that commercial credit, and the system of banking, as a part of it, does furnish a substitute for capital. It is very true that this system enables men to do business, to some extent, on borrowed capital ; and those who wish to destroy all such, act wisely to that end by decrying it.
This commercial credit, Sir, depends on wise laws, steadily administered. Indeed, the best-governed countries are always the richest. With good political systems, natural disadvantages, competition, and the world, may all be defied. Without such systems, climate, soil, position, and every thing else, may favor the progress of wealth, and yet nations be poor. What but bad laws and bad government has retarded the progress of commerce, credit, and wealth, in the peninsula of Spain and Portugal, a part of Europe distinguished for its natural advantages, and especially suited, by its position, for an extensive commerce, with the sea on three sides of it, and as many good harbors as all the rest of Europe? The whole history of commerce shows that it flourishes or fades, just in proportion as property, credit, and the fruits of labor, are protected by free and just political systems. Credit cannot exist under arbitrary and rapacious governments, and commerce cannot exist without credit. Tripoli, and Tunis, and Algiers, are countries, above all others, in which hard money is indispensable ; because, under such governments, nothing is valuable which cannot be secreted and hoarded. And as government rises, in the scale of intelligence and liberty, from these barbarous despotisms, to the highest rank of free states, its progress is marked, at every step, by a higher degree of security and of credit. And this undeniable truth should make well-informed men ashamed to cry out against banks and banking, as being aristocratical, oppressive to the poor, or partaking of the character of dangerous monopoly. Banks are a part of the great system of commercial credit, and have done much, under the influence of good government, to aid and elevate that credit. What is their history? Where do we first find them? Do they make their first appearance in despotic governments, and show themselves as inventions of power to oppress the people? The first bank was that of Venice; the second that of Genoa. From the example of these republics, they were next established in Holland, and the free city of Hamburgh. England followed these examples, but not until she had been delivered from the tyranny of the Stuarts, by the revolution of 1688. It was William the Deliverer, and not William the Conqueror, that established the Bank of England. Who supposes that a Bank of England could have existed in the times of Empson and Dudley? Who supposes that it could have lived under those ministers of Charles II, who shut up the exchequer; or that its vaults could have been secure against the arbitrary power of the brother and successor of that monarch?
The history of banks belongs to the history of commerce and the general history of liberty. It belongs to the history of those causes which, in a long course of years, raised the middle and lower orders of society to a state of intelligence and property, in spite of the iron sway of the feudal system. In what instance have they endangered liberty, or overcome the laws? Their very
existence, on the contrary, depends on the security and the rule both of liberty and law. Why, Sir, have we not been taught, in qur earliest reading, that, to the birth of a commercial spirit, to associations for trade, to the guilds and companies formed in the towns, we are to look for the first appearance of liberty, from the darkness of the middle ages; for the first faint blush of that morning, which has grown brighter and brighter till the perfect day has come? And it is just as reasonable to say that bills of exchange are dangerous to liberty, that promissory notes are dangerous to liberty, that the power of regulating the coin is dangerous to liberty, as that credit, and banking, as a part of credit, are dangerous to liberty.
Sir, I hardly know a writer on these subjects who has not selected the United States as an eminent and striking instance, to show the advantages of well-established credit, and the benefit of its expansion, to a degree not incompatible with safety, by a paper circulation. Or, if they do not mention the United States, they describe just such a country; that is to say, a new and fast-growing country. Hitherto, it must be confessed, our success has been great. With some breaks and intervals, our progress has been rapid, because our system has been good. We have preserved and fostered credit, till all have become interested in its further continuance and preservation. It has run deep and wide into our whole system of social life. Every man feels the vibration, when a blow is struck upon it. And this is the reason why nobody has escaped the influence of the Secretary's recent measure. While credit is delicate, sensitive, easily wounded, and more easily alarmed, it is also infinitely ramified, diversified, extending every where, and touching every thing.
There never was a moment in which so many individuals felt their own private interest to be directly affected by what has been done, and what is to be done. There never was a moment, therefore, in which so many straining eyes were turned towards Congress. It is felt, by every one, that this is a case in which the acts of the Government come directly home to him, and produce either good or evil, every hour, upon his personal and private condition. And how is the public expectation met? How is this intense, this agonized expectation answered ? I am grieved to say, I am ashamed to say, it is answered by declamation against the Bank, as a monster, by loud cries against moneyed aristocracy, by pretended zeal for a hard-money system, and by professions of favor and regard to the poor.
The poor! We are waging war for the benefit of the poor. We slay that monster, the Bank, that we may defeat the unjust purposes of the rich, and elevate and protect the poor! And what is the effect of all this? What happens to the poor, and all the middling classes, in consequence of this warfare? Where are they? Are they well fed, well clothed, well employed, independent, happy, and grateful ? They are all at the feet of the capitalists; they are in the jaws of usury. If there be hearts of stone in human bosoms, they are at the mercy of those who have such hearts in their breasts. Look to the rates of interest, mounting to twenty, thirty, fifty per cent. Sir, this measure of Government has transferred millions upon millions of hard-earned property, in the form of extra interest, from the industrious classes, to the capitalists, from the poor to the rich. And this is called putting down a moneyed aristocracy! Sir, there are thousands of families who have diminished, not their luxuries, not their amusements, but their meat and their bread, that they might be able to save their credit, by paying enormous interest. And there are other thousands, who, having lost their employment, have lost every thing, and who yet hear, amidst the bitterness of their anguish, that the great motive of Government is kindness to the poor!
It is difficult, Sir, to restrain one's indignation, when, to so much keen distress, there is added so much which has the appearance of mere mockery. Sir, let the system of the Administration go on, and we shall soon not know our country. We shall see a new America. On the map, where these United States have stood, we shall behold a country that will be strange to us. We shall see a class of idle rich, and a class of idle poor; the former a handful, the latter a host. We shall no longer behold a community of men, with spirits all active and stirring, contributing, all of them, to the public welfare, while they partake in it, pushing on their fortunes, and bettering their own condition, and helping to swell, at the same time, the cup of the general prosperity to overflowing. We shall see no more of that credit which reaches out its hand to honest enterprise ; of that certainty of reward, which cheers on labor to the utmost stretch of its sinews; of that personal and individual independence, which enables every man to say that no man is his master. Sir, I will not look on the picture. I will not imagine what spectacle shall be exhibited, when this country not only halts in her onward march, but recedes; when she tracks back in the long and rapid strides of her forward movement; when she sets herself to undo all that she has done; when she renounces the good she has attained; when she obstructs credit, destroys enterprise, arrests commerce, and smothers manufactures.
Mr. President, I confess I find it difficult to respect the intelligence, and at the same time the mctives, of those, who alarm the people with the cry of danger to their liberties from the Bank. Do they see the same danger from other banks ? I think not. With them, bank capital and bank credit is dangerous or harmless, according to circumstances. It is a lion, whose conduct and char