SPEECH

IN THE SENATE OF THE UNITED STATES, ON THE PRESIDENT'S VETO OF THE BANK BILL, JULY 11, 1832.

MR. PRESIDENT: No one will deny the high importance of the subject now before us. Congress, after full deliberation and discussion, has passed a bill for extending the duration of the Bank of the United States, by decisive majorities, in both Houses. It has adopted this measure not until its attention had been called to the subject, in three successive annual messages of the President. The bill having been thus passed by both Houses, and having been duly presented to the President, instead of signing and approving it, he has returned it with objections. These objections go against the whole substance of the law originally creating the Bank. They deny, in effect, that the Bank is Constitutional; they deny that it is expedient; they deny that it is necessary for the public service.

It is not to be doubted, that the Constitution gives the President the power which he has now exercised; but while the power is admitted, the grounds upon which it has been exerted become fit subjects of examination. The Constitution makes it the duty of Congress, in cases like this, to reconsider the measure which they have passed, to weigh the force of the President's objections to that measure, and to take a new vote upon the question.

Before the Senate proceeds to this second vote, I propose to make some remarks upon those objections. And, in the first place, it is to be observed, that they are such as to extinguish all hope, that the present Bank, or any Bank at all resembling it, or resembling any known similar institution, can ever receive his approbation. He states no terms, no qualifications, no conditions, no modifications, which can reconcile him to the essential provisions of the existing charter. He is against the Bank, and against any Bank constituted in a manner known either to this or any other country. One advantage, therefore, is certainly obtained, by presenting him the bill. It has caused his sentiments to be made known. There is no longer any mystery, no longer a con

test between hope and fear, or between those prophets who predicted a veto, and those who foretold an approval. The bill is negatived; the President has assumed the responsibility of putting an end to the Banks; and the country must prepare itself to meet that change in its concerns which the expiration of the charter will produce. Mr. President, I will not conceal my opinion, that the affairs of this country are approaching an important and dangerous crisis. At the very moment of almost unparalleled general prosperity, there appears an unaccountable disposition to destroy the most useful and most approved institutions of the Government. Indeed, it seems to be in the midst of all this national happiness, that some are found openly to question the advantages of the Constitution itself; and many more ready to embarrass the exercise of its just power, weaken its authority, and undermine its foundations. How far these notions may be carried, it is impossible yet to say. We have before us the practical result of one of them. The Bank has fallen, or is to fall.

It is now certain, that, without a change in our public councils, this Bank will not be continued, nor will any other be established, which, according to the general sense and language of mankind, can be entitled to the name. Within three years and nine months from the present moment, the charter of the Bank expires; within that period, therefore, it must wind up its concerns. It must call in its debts, withdraw its bills from circulation, and cease from all its ordinary operations. All this is to be done in three years and nine months; because, although there is a provision in the charter, rendering it lawful to use the corporate name for two years after the expiration of the charter, yet this is allowed only for the purpose of suits, and for the sale of the estate belonging to the Bank, and for no other purpose whatever. The whole active business of the Bank, its custody of public deposits, its transfers of public moneys, its dealing in exchange, all its loans and discounts, and all its issues of bills for circulation, must cease and determine on or before the third day of March, 1836; and within the same period, its debts must be collected, as no new contract can be made with it, as a corporation, for the renewal of loans, or discount of notes or bills, after that time.

The President is of opinion, that this time is long enough to close the concerns of the institution without inconvenience. His language is, "The time allowed the Bank to close its concerns is ample, and if it has been well managed, its pressure will be light, and heavy only in case its management has been bad. If, therefore, it shall produce distress, the fault will be its own." Sir, this is all no more than general statement, without fact or argument to support it. We know what the management of the

Bank has been, and we know the present state of its affairs. We can judge, therefore, whether it be probable, that its capital can be all called in, and the circulation of its bills withdrawn, in three years and nine months, by any discretion or prudence in management, without producing distress. The Bank has discounted liberally, in compliance with the wants of the community. The amount due to it, on loans and discounts, in certain large divisions of the country, is great; so great, that I do not perceive how any man can believe, that it can be paid, within the time now limited, without distress. Let us look at known facts. Thirty millions of the capital of the Bank are now out, on loans and discounts in the States on the Mississippi and its waters; ten of these millions on the discount of bills of exchange, foreign and domestic, and twenty millions loaned on promissory notes. Now, Sir, how is it possible, that this vast amount can be collected in so short a period, without suffering, by any management whatever? We are to remember, that, when the collection of this debt begins, at that same time, the existing medium of payment, that is, the circulation of the bills of the Bank, will begin also to be restrained and withdrawn; and thus the means of payment must be limited, just when the necessity of making payment becomes pressing. The whole debt is to be paid, and within the same time the whole circulation withdrawn.

The local Banks, where there are such, will be able to afford little assistance; because they themselves will feel a full share of the pressure. They will not be in a condition to extend their discounts, but, in all probability, obliged to curtail them. Whence, then, are the means to come for paying this debt? and in what medium is payment to be made? If all this may be done with but slight pressure on the community, what course of conduct is to accomplish it? How is it to be done? What other thirty millions are to supply the place of these thirty millions now to be called in? What other circulation, or medium of payment, is to be adopted, in the place of the bills of the Bank? The message, following a singular strain of argument, which had been used in this House, has a loud lamentation upon the suffering of the Western States, on account of their being obliged to pay even interest on this debt. This payment of interest is itself represented as exhausting their means, and ruinous to their prosperity. But if the interest cannot be paid without pressure, can both interest and principal be paid in four years without pressure? The truth is, the interest has been paid, is paid, and may continue to be paid, without any pressure at all; because the money borrowed is profitably employed by those who borrow it, and the rate of interest, which they pay, is at least two per cent. lower than the actual value of money in that

part of the country. But to pay the whole principal in less than four years, losing, at the same time, the existing and accustomed means and facilities of payment created by the Bank itself, and to do this without extreme embarrassment, without absolute distress, is, in my judgment, impossible. I hesitate not to say, that, as this veto travels to the West, it will depreciate the value of every man's property from the Atlantic States to the capital of Missouri. Its effects will be felt in the price of lands, the great and leading article of western property, in the price of crops, in the products of labor, in the repression of enterprise, and in embarrassment to every kind of business and occupation. I state this opinion strongly, because I have no doubt of its truth, and am willing its correctness should be judged by the event. Without personal acquaintance with the Western States, I know enough of their condition to be satisfied, that what I have predicted must happen. The people of the West are rich, but their riches consist in their immense quantities of excellent land, in the products of these lands, and in their spirit of enterprise. The actual value of money, or rate of interest, with them, is high, because their pecuniary capital bears little proportion to their landed interest. At an average rate, money is not worth less than eight per cent. per annum, throughout the whole western country; notwithstanding that it has now a loan, or an advance, from the Bank, of thirty millions, at six per cent. To call in this loan, at the rate of eight millions a year, in addition to the interest on the whole, and to take away, at the same time, that circulation which constitutes so great a portion of the medium of payment throughout that whole region, is an operation which, however wisely conducted, cannot but inflict a blow on the community of tremendous force and frightful consequences. The thing cannot be done without distress, bankruptcy, and ruin, to many. If the President had seen any practical manner in which this change might be effected without producing these consequences, he would have rendered infinite service to the community by pointing it out. But he has pointed out nothing, he has suggested nothing; he contents himself with saying, without giving any reason, that, if the pressure be heavy, the fault will be the Bank's. I hope this is not merely an attempt to forestall opinion, and to throw on the Bank the responsibility of those evils which threaten the country, for the sake of removing it from himself.

The responsibility justly lies with him, and there it ought to remain. A great majority of the people is satisfied with the Bank as it is, and desirous that it should be continued. They wished no change. The strength of this public sentiment has carried the bill through Congress, against all the influence of the administration, and all the power of organized party. But the

President has undertaken, on his own responsibility, to arrest the measure, by refusing his assent to the bill. He is answerable for the consequences, therefore, which necessarily follow the change which the expiration of the Bank charter may produce; and if these consequences shall prove disastrous, they can fairly be ascribed to his policy, only, and the policy of his administration.

Although, Sir, I have spoken of the effects of this veto in the Western Country, it has not been because I considered that part of the United States exclusively affected by it.

Some of the Atlantic States may feel its consequences, perhaps, as sensibly as those of the West, though not for the same reasons. The concern manifested by Pennsylvania, for the renewal of the charter, shows her sense of the importance of the Bank to her own interest, and that of the nation. That great and enterprising State has entered into an extensive system of internal improvements, which necessarily makes heavy demands on her credit and her resources; and by the sound and acceptable currency which the Bank affords, by the stability which it gives to private credit, and by occasional advances, made in anticipation of her revenues, and in aid of her great objects, she has found herself benefited, doubtless, in no inconsiderable degree. Her legislature has instructed her Senators here to advocate the renewal of the charter, at this session. They have obeyed her voice, and yet they have the misfortune to find that, in the judgment of the President, the measure is unconstitutional, unnecessary, dangerous to liberty, and is, moreover, ill timed. But, Mr. President, it is not the local interest of the West, nor the particular interest of Pennsylvania, or any other State, which has influenced Congress in passing this bill.

It has been governed by a wise foresight, and by a desire to avoid embarrassment, in the pecuniary concerns of the country, to secure the safe collection and convenient transmission of public moneys, to maintain the circulation of the country, sound and safe as it now happily is, against the possible effects of a wild spirit of speculation. Finding the Bank highly useful, Congress has thought fit to provide for its continuance.

As to the time of passing this bill, it would seem to be the last thing to be thought of, as a ground of objection, by the President; since, from the date of his first message to the present time, he has never failed to call our attention to the subject with all possible apparent earnestness. So early as December, 1829, in his message to the two Houses, he declares, that he "cannot, in justice to the parties interested, too soon present the subject to the deliberate consideration of the Legislature, in order to avoid the evils resulting from precipitancy, in a measure involving such important principles and such deep pecuniary interests.' Aware of this