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the third session of the Congress, in 1791. The bill for its creation originated in the Senate; the debates in which were at that time not public. We have, however, the debates in the House, we have the reports of the Secretaries, and we have the law itself. Let us endeavor to learn, from these sources,ybr what objects this institution was created, and whether a national currency was one of those objects.
Certainly, sir, it must be admitted that currency was not the only object in incorporating the bank of 1791. The Government was new; its fiscal affairs were not well arranged; it was greatly in debt; and the political state of things at the time rendered it highly probable that sudden occasions for making loans would arise. That it might assist the operations of the Treasury, therefore, and that it might make those loans to Government, if pressing occasions should arise, were two of the purposes had in view in establishing the bank. But it is equally clear that there was a third purpose, and that respected commerce and currency. To furnish a currency for general circulation., and to aid exchange, was, demonstrably, a clear, distinct, and avowed object, in the creation of the first bank.
On the 13th of December, 1790, the Secretary of the Treasury made a report to the House of Representatives, recommending a national bank. In this report, he set forth the advantages of such an institution; one of these advantages, he says, consists "in increasing the quantity of circulating medium, and quickening the circulation." And he then proceeds to observe — " This last may require some illustration. When payments are to be made between different places, having an intercourse of business with each other, if there happen to be no private bills at market, and there are no bank notes which have a currency in both, the consequence is, that coin must be remitted. This is attended with trouble, delay, expense, and risk. If, on the contrary, there are bank notes current in both places, the transmission of these, by the post, or any other speedy or convenient conveyance, answers the purpose; and these again, in the alternations of demand, are frequently returned, very soon after, to the place whence they were first sent; whence the transportation and retransportation of the metals are obviated, and a more convenient and a more expeditious medium of payment is substituted."
Is not this clear proof, that one object, in establishing the bank, in the opinion of the Secretary, was the creation of a currency which should have general credit throughout the country, and, by means of such credit, should become a convenient and expeditious medium of exchange? Currency, sir, currency and exchange were then, beyond all doubt, important objects, in the opinion of the proposer of the measure, to be accomplished by the institution. The debates which took place in the House of Representatives, confirm the same idea. Mr. Madison, who objected to the bill on constituVOL. III. 27 B*
tional grounds, admitted, nevertheless, that one of the advantages of a bank consists " in facilitating occasional remittances from different places where notes happen to circulate; " and Mr. Ames, who was one of the most distinguished friends of the measure, and who represented a commercial district, enlarged on the great benefit of the proposed institution to commerce. He insisted that the intercourse between the States could never be on a good footing, without an institution whose paper would circulate more extensively than that of any State bank; and what he saw in the future, we have seen in the past, and feel in the present. Other gentlemen, also, contended that some such institution was necessary, in order to enable Congress to regulate the commerce of the country, and, for that reason, that it would be constitutional, as being proper means for a lawful end.
When the bill had passed the two Houses, the President, as we all know, asked the opinion of his cabinet upon its constitutionality. The Secretary of State and the Attorney General were against it; the Secretary of the Treasury was in favor of it; and among the grounds on which he placed the right of Congress to pass the law, was its adaptation to the exercise of the commercial power, conferred by the Constitution on Congress. H is language is — " The institution of a bank has, also, a natural relation to the regulation of trade between the States, in so far as it is conducive to the creation of a convenient medium of exchange between them, and to the keeping up a full circulation, by preventing the frequent displacement of the metals in reciprocal remittances. Money is the very hinge on which commerce turns. And this does not mean merely gold and silver; many other things have served the purpose, with different degrees of utility. Paper has been extensively employed. It cannot, therefore, be admitted, with the Attorney General, that the regulation of trade between the States, as it concerns the medium of circulation and exchange, ought to be considered as confined to coin." "And it is," he adds," in reference to these general relations of commerce, that an establishment which furnishes facilities to circulation, and a convenient medium of exchange and alienation, is to be regarded as a regulation of trade."
Nothing can be plainer, sir, than this language; and therefore nothing is more certain than that those who recommended and supported the first bank, regarded it as a fit and necessary measure, in order to enable Congress to exercise its important duty of regulating commerce, and to fulfil, especially, that part of the duty which enjoined upon it the provision of a proper and suitable currency for circulation and exchange.
But it is not necessary to rely on these opinions of individual friends of the measure. Let the act speak for itself. Let us look into it, and search its reasons on its own face. What are the grounds and objects of the law, as set forth in the law itself? The preamble tells us. It declares —
"That the establishing of a bank will be very conducive to the successful conducting of the national finances; and will tend to give facility to the obtaining of loans, for the use of Government, in sudden emergencies; and will be productive of considerable advantage to trade and industry in general."
Trade and industry in general, therefore, constituted one distinct and definite object of the incorporation, if the law truly expounds its own purposes. It was not revenue alone ; it was not the facility of making loans, merely; it was not mere utility to Government; but, in addition to these, it was commerce; it was the interests of the people; it was trade and business in general, which, among other considerations, formed an important part of the objects of the incorporation. And indeed, sir, events proved that it was vastly the most important part of all. What else did the first bank do, for the Government or the country, at all to be compared, in the amount of benefit, to its influence on the currency and the exchanges?
It is as clear as demonstration, therefore, that the Government, in General Washington's time, did feel itself authorized by the Constitution, and bound in duty, to provide a safe currency, of general credit, for circulation and for exchange. It did provide such a currency. It is remarkable enough, so comparatively small was the mere object of keeping the public money, that no provision for that purpose was inserted in the charter; nor was there any law on the subject, so far as I remember, till the year 1800.
The bank went into operation, and its success was great and instantaneous; and during the whole period of its existence, there was no complaint of the state of the currency or the exchanges.
And now, sir, let me ask, what was it that gave this success to the new institution? Its capital was small, and Government had no participation in its direction ; it was committed entirely to individual management and control.
Its notes, it is true, were made receivable in payments to Government: that was one advantage. It had a solid capital, and its paper was at all times convertible into gold and silver, at the will and pleasure of the holder: that was another and a most important ground of its prosperity. But, sir, there was something more than all this. There was something which touched men's sentiments, as well as their understandings. There was a cause which carried the credit of the new-born bank, as on the wings of the wind, to every quarter and every extremity of the country. There was a charm, which created trust, and faith, and reliance, not only in the great marts of commerce, but in every corner into which money, in any form, could penetrate. That cause was its nationality of character. It had the broad seal of the Union to its charter. It was the institution of the nation, established by that new Government, which the people already loved; and it was known to be designed to revive and foster that commerce, which had so long been prostrate •nd lifeless.
Mr. President, let it be borne in mind that I am not now arguing the constitutionality, or present expediency, of a bank of the United States. My sentiments are already well known on that subject; and, if they were not, the subject is not now before us.
But I have adverted to the history of the first bank, and examined the grounds on which, and the purposes for which, it was established, in order to show the fact, that this Government, from the first, has acknowledged the important duty and obligation of providing for currency and exchange, as part of the necessary regulation of commerce. I do not mean, at present, to say that a bank is the only, or tho indispensable, means by which this duty can and must be performed; although I certainly think it the best. Yet I will not set limits to the wisdom and sagacity of gentlemen, in the invention and adaptation of means. If they do not like a bank, let them try whatever they do like. If they know a better instrument, or agent, let them use it. But I maintain that the performance of the duty, by some means, or some instrument, or some agent, is indispensable; and that so long as it shall be neglected, so long the commerce and business of the country must suffer.
The history of the late Bank of the United States manifests, as clearly as that of the first, that the Government, in creating it, w as acting, avowedly, in execution of its duty, in regard to the currency. Fiscal aid, except so far as the furnishing of a currency was concerned, was hardly thought of. Its bills were made receivable for revenue, indeed; but that provision, as far as it went, was obviously a provision for currency. Currency for the revenue, however, was not the leading object. The leading object was currency for the country.
The condition of things, at that time, was very much like that which now exists. The revenue of the Government was entirely adequate to all its wants; but its operations were all obstructed by the derangement of the currency, and the people were as bad off as the Government. The banks, or most of them, had suspended payments. Their paper was depreciated, in various degrees; the exchanges were all disordered, and the commerce of the country thrown into confusion. Government and people were all rich ; but, with all their riches, they bad no money. Both might apply to themselves what Mr. Addison, being a much readier writer than speaker, said of himself, when he observed, that although he could draw for a thousand pounds, he had not a guinea in his pocket.
Mr. Madison, at that time, was President of the Umted States, He had been one of the opposers of the first bank, on constitutional grounds, but he had yielded his own opinions to the general sentiment of the country, and to the consideration that the power had been established and exercised. He was not a man who carried his respect for himself, and his own opinions, so far as to overcome his respect for all other men's judgments. Wise men, sir, are sometimes wise enough to surrender their own opinions, or at least to see that there is a time when questions must be considered as settled. Mr. Madison was one of these. In his annual Message, in December, 1815, he says —
"The arrangements of the finances, with a view to the receipts and expenditures of a permanent peace establishment, will necessarily enter into the deliberations of Congress during the present session. It is true, that tho improved condition of the public revenue will not only afford the means of maintaining the faith of the Government with its creditors inviolate, and of prosecuting successfully the measures of the most liberal policy, but will also justify an immediate alleviation of the burdens imposed by the necessities of the war. It is, however, essential to every modification of the finances, that the benefits of a uniform national currency should be restored to the community. The absence of the precious metals will, it is believed, be a temporary evil; but, until they can again be rendered the general medium of exchange, it devolves on the wisdom of Congress to provide a substitute, which shall equally engage the confidence, and accommodate the wants of the citizens throughout the Union. If the operation of the State banks cannot produce this result, the probable operation of a national bank will merit consideration; and if neither of these expedients be deemed effectual, it may become necessary to ascertain the terms upon which the notes of the Government (no longer required as an instrument of credit) shall be issued, upon motives of general policy, as a common medium of circulation."
Here, sir, is the express recommendation to Congress to provide a "National Currency," a paper currency, a uniform currency, for the uses of the community, as a substitute for the precious metals, and as a medium of exchange. It devolves on Congress, says Mr. Madison, to provide such a substitute as shall engage the confidence and accommodate the wants of the citizens throughout the Union ; and if the State banks cannot produce this result, a national bank will merit consideration. Can language be more explicit? Currency, national currency, currency for exchange, currency which shall accommodate all the people, is the great, and leading, and, I may add, the sole and single object of the recommendation.
Contrast now, sir, this language, and these sentiments, with those of the Message before us. Did Mr. Madison confine his recommendation to such measures of relief as might be useful to Government merely? Did he look exclusively to the Treasury? Did he content himself with suggesting a proper medium for the receipt of revenue, or a proper deposit for its safe-keeping? Far otherwise. His view was general, statesmanlike, and fitted to the