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Government for fifty years, overturning the law of comity, and leaving it to the States, each to establish a comity for itself.

Mr. Webster here took leave of the question of the power of a corporation created by one of the States to make contracts in another.

I now proceed (said Mr. Webster) to consider whether there be any thing in the law or constitution of the State of Alabama which prevents the agent of the Bank of the United States in that State from making such a contract as that which is the foundation of this suit.

It is said that the buying of a bill of exchange by such agent is contrary to the policy of the State of Alabama; and this is inferred from the law establishing the Bank of Alabama; that bank being authorized to deal in bills of exchange, and the constitution of the State authorizing the establishment of no other than one bank in the State.

This (said Mr. Webster) is a violent inference.

How does the buying or selling bills of exchange in Alabama, by another purchaser than the Bank of Alabama, infringe her policy? Because, it is said, it diminishes the profits which she derives from the dealings of the bank. Profit is her policy, it is argued; gain, her end. Is it against her policy for Mr. Biddle to buy bills, because his bank is incorporated; and not against her policy for Mr. Girard to buy bills, because his is not incorporated? Or how far does she carry this policy imputed to her? Is no one to be allowed to buy or sell bills of exchange in Alabama but a bank of her own, which may or may not be in credit, and may or may not be solvent? It would be strange, indeed, were any State in this Union to adopt such a policy as this. But, if the argument founded on this inferred policy of Alabama amounts to any thing, it proves, not that incorporated citizens of other States cannot buy or sell bills there, but that it is the policy of Alabama to prevent other citizens from buying bills at all in Alabama.

I think (said Mr. Webster) that there is no just foundation for the inference of any such policy on the part of the State of Alabama. By referring to Aikins's Digest of the laws of that State, it will be found that she has carried her policy a little further than merely the establishing of a bank. Her public officers are authorized to receive the notes of banks of other States in payment of dues to her; and she has enacted laws to punish the forgery of notes of other banks. Now, taking her acts together, considering them as a whole, the inference which has been drawn from her establishment of a State bank under her constitution is certainly not sustained.

To consider this argument, however, more closely: It is assumed by it, first, that the State meant, by her legislation, to take to herself all the profits of banking within her territorial limits; and, secondly, that the act of buying and selling a bill of exchange belongs to banking.

The profits of banking are derived more from circulation than from exchange. If the State meant, through her bank policy, to take all the profits of banking, why has she not taken all the profits of circulation? Not only she has done no such thing, but she protects the circulation of the notes of banks of other States.

Mr. Webster begged now to ask the particular attention of the court to this question: WHAT IS BANKING?

Alabama, in reference to banking, has done nothing but establish a bank, and give it the usual banking powers. And when the learned counsel on the other side speak of banking, what do they mean by it? A bank deals in exchange, and it buys or builds houses also; so do individuals. If there be any thing peculiar in these acts by a bank, it must be not in the nature of the acts individually, but in the aggregate of the whole. What constitutes banking must be something peculiar. There are various acts of legislation by different States in this country for granting or preventing the exercise of banking privileges. But has any law ever been passed to authorize or to prevent the buying by an individual of a bill of exchange? No one has ever heard of such a thing. The laws to restrain banking have all been directed to one end; that is, to repress the unauthorized circulation of paper money. There are various other functions performed by banks; but, in discharging all these, they only do what unincorporated individuals do.

What is that, then, without which any institution is not a bank, and with which it is a bank? It is a power to issue promissory notes with a view to their circulation as money.

Our ideas of banking have been derived principally from the act constituting the first Bank of the United States, and the idea of that bank was borrowed from the Bank of England. [To ascertain the character and peculiar functions of the Bank of England, Mr. Webster here referred, and referred the Court, to various authorities; to McCulloch's Commercial Dictionary; to Smollett's Continuation of Hume's England; to Godfrey's History of the Bank of England, in Lord Somers's Tracts, 11th volume, 1st article; to Anderson's History of Commerce, &c.]

The project of the Bank of England was conceived, Mr. Webster said, by Mr. Paterson, a Scotch gentleman, who had travelled inuch abroad, and had seen somewhere, (he believed in Lombardy,) a small bank which issued tickets or promises of payment of money. From this he took the idea of a bank of circulation. That was in 1694. At that time, neither inland bills nor promissory notes were negotiable or transferable, so as to enable the holder to bring suit thereon in his own name. There was no negotiable paper, except foreign bills of exchange. Mr. Paterson's conception was, that the notes of the Bank of England should be negotiable toties quoties, or transferable from hand to hand, payable at the bank in specie, either

on demand, or at very short sight. This conception had complete success, because there was then no other inland paper, either bills or notes, which was negotiable. The whole field was occupied by Bank of England notes. In 1698, inland bills were made negoti able by act of Parliament; and in the fourth year of Queen Anne's reign, promissory notes were made negotiable. Of course, after this, every body might issue promissory notes; and, where they had credit enough, they might circulate as money. There is not much of novelty in the inventions of mankind. Under this state of things, that took place in England which we have seen so often take place among us, and which we have put to the account of modern contrivance. Large companies were formed, with heavy amounts of capital, for purposes not professedly banking; one, especially, to carry on the mining business on a large scale. These companies issued promissory notes, payable on demand, and these notes readily got into circulation as cash, to the prejudice of the circulation of the Bank of England. But, Parliament being at this time in great want of ready money for the expenditures of the war on the continent, the bank proposed to double its capital, and to lend this new half of it to Government, if Government would secure to the bank an exclusive circulation of its notes. The statute of the 6th of Aune, chapter 22, was accordingly passed; which recites that other persons and divers corporations have presumed to borrow money, and to deal as a bank, contrary to former acts; and thereupon it is enacted, that "no corporation, or more than six persons in partnership, shall borrow, owe, or take up any money on their bills and notes, payable at demand, or at less than six months from the borrowing?' This provision has been often reënacted, and constitutes the banking privilege of the Bank of England. Competition was not feared from the circulation of individual notes. Hence individuals, or partnerships of not more than six persons, have been at liberty to issue small notes, payable on demand; in other words, notes for circulation. And we know that, in the country, such notes have extensively circulated; but private bankers in London, in the neighborhood of the bank, though it was lawful, have not found it useful, to issue their own notes. So that the banking privilege of the Bank of England consisted simply in the privilege of issuing notes for circulation, while that privilege was forbidden, by law, to all other corporations, and all large partnerships and associations. This privilege was restrained, in 1826, so as not to prohibit banking companies, except within the distance of sixty-five miles of London; and, at the same time, notes of the bank were made a tender in payment of all debts, except by the bank itself. This provision may be considered as a new privilege; but it does not belong to the original and essential idea of banking. Mr. McCulloch remarks, and truly, that all that Government has properly to do

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with banks is only so far as they are banks of issue. Upon the same principle, the banks of other countries of Europe are incorporated, with the privilege to issue and circulate notes, as their distinctive character. Here Mr. Webster explained the character of the banks of France, Belgium, &c.

Now, how is it in our own country? When our State Legislatures have undertaken to restrain banking, the great end in view has been to prevent the circulation of notes. Mr. Webster here referred to the statute-books of Massachusetts, Maine, Rhode Island, and New Hampshire, for restraining unauthorized companies from issuing notes of circulation. He then turned to the statute of Ohio, imposing a punishment for unauthorized banking. Her law defines, in the first place, what constitutes a bank, viz., the issuing of notes which pass by delivery, and which are intended for circulation as cash. That, said Mr. Webster, is the true definition of a bank, as we understand it, in this country. Mr. Webster referred also to the laws of other States, Maryland, New Jersey, Missouri, Pennsylvania, Delaware, North Carolina, South Carolina, Virginia, Georgia, — all to the same effect. The law of the State of Alabama herself, said he, is much more important, in this view of the case, than that of any other State. The constitution of the State of Alabama was established in 1819; the law creating the Bank of Alabama was passed in 1823. The constitution and this law are all the authorities from which the inference has been drawn of the policy of the State of Alabama. Did she suppose that, by this law, she was establishing such a monopoly of the purchase of bills of exchange as has been contended for in this case? Certainly not. For, by a law passed afterwards, she restrained the circulation of unauthorized bank notes, that is, notes not issued by some authorized banks. But did she, also, restrain dealings in exchange? She did no such thing. Nor is there any thing, either in the constitution or the laws of the State of Alabama, which shows that by banking she ever meant more than the circulation of bills as currency. There is nothing, therefore, in any law, or any policy, of Alabama, against the purchase of bills of exchange by others as well as by the Bank of Alabama. She has prohibited, by law, other transactions which are clearly banking transactions; but she has not touched this. If even her banking policy includes as well buying exchange as circulation, and she guards against competition in the one, and leaves the other open, who can say, in the face of such evidence, that it is her policy to guard against what she leaves free and unrestrained?

Is there any thing in the constitution, or any ground in the legislation of Alabama, to sustain the allegation which has been made of her policy? If not, is the existence of such a policy to be established here by construction, and that construction far-fetched?

Mr. Webster here rested his argument on this case, which, he

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said, had been discussed by others so ably as not to justify his occupying the time of the court by going further into it.

The learned counsel on the other side had, in the course of his argument of yesterday, alluded to the newspapers, which, he said, had treated the decision of the court below scornfully. Mr. Webster said he was sorry to hear it; for the learned judge had acted, in his decision, he had no doubt, under a high sense of duty. I have been told, said Mr. Webster, but I have not seen it, that a press in this city, since this case has been under consideration in this court, has undertaken to speak, in a tone something approaching to that of command, of the decision upon it to be expected from this court. Such conduct is certainly greatly discreditable to the character of the country, as well as disrespectful and injurious to the court.

A learned gentleman on the other side said, the other day, that he thought he might regard himself, in this cause, as having the country for his client. He only meant, doubtless, to express a strong opinion that the interest of the country required the case to be decided in his favor. I agree with the learned gentleman, and I go, indeed, far beyond him, in my estimate of the importance of this case to the country. He did not take pains to show the extent of the evil which would result from undoing the vast number of contracts which would be affected by the affirmation here of the judgment rendered in the court below, because his object did not require that: his object was to diminish the prospect of mischief, not to enlarge it. For myself, I see neither limit nor end to the calamitous consequences of such a decision. I do not know where it would not reach, what interests it would not disturb, or how any part of the commercial system of the country would be free from its influences, direct or remote. And for what end is all this to be done? What practical evil calls for so harsh, not to say so rash, a remedy? And why, now, when existing systems and established opinions, when both the law and the public sentiment, have concurred in what has been found, practically, so safe and so useful; why now, and why here, seek to introduce new and portentous doctrines? If I were called upon to say what has struck me as most remarkable and wonderful in this whole case, I would, instead of indulging in expletives, exaggerations, or exclamations, put it down as the most extraordinary circumstance, that now, within a short month of the expiration of the first half century of our existence under this Constitution, such a question should be made; that now, for the first time, and here, for the last place on earth, such doctrines as have been heard in its support should be brought forward. With all the respect which I really entertain for the court below, and for the arguments which have been delivered here on the same side, I must say that, in my judgment, the decis ion now under revision by this court, is, in its principle, anti-commercial and anti-social, new and unheard-of in our system, and

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