Abridgement of the Debates of Congress, from 1789 to 1856 (4 of 16 vol.)

Thursday, January 17

Bank of the United States

The House resolved itself into a Committee of the Whole on the bill for renewing the charter of the Bank of the United States – the motion for striking out the first section still under consideration.

Mr. Fisk. – Mr. Chairman: I regret that we are called upon to vote for or against striking out the first section of this bill, at this time. I could have wished that, upon a bill of so much interest and importance, we could have proceeded to have filled the blanks, and made such amendments as would have obviated many objections which may be urged against it in its present form. I am not prepared to give my vote in favor of a renewal of the charter of the Bank of the United States, either upon the terms upon which it was originally granted, or in the manner contemplated by this bill; yet, upon conditions less objectionable, I should feel myself bound to vote in favor of a renewal. But the question presented upon this motion, is not upon what terms this charter shall be renewed, but whether it shall be renewed upon any terms, subject to any conditions Congress may impose.

In this view, I consider it the most important subject upon which this Congress will be required to act. It is determining a question which is connected with our finances, with the circulating medium of the country, and with our agricultural, commercial, and manufacturing interests; and, as such, it cannot but be interesting to every class of our citizens.

The interests and prosperity of the United States are not only intimately, but inseparably, connected with trade. The market of the farmer depends greatly upon the merchant and the shipper. And the price and demand of every article of produce are in a great degree regulated by the difficulties or facilities of payment. Let the difficulty of paying be increased, and the price of produce immediately falls; for the demand for exportation becomes very limited, the markets are overstocked, and prices reduced. Any sudden check to our commerce, whether produced by our own municipal regulations, or the outrages of foreign powers, checks the market and the price of produce; so that not only the merchants, but the farmers feel its effects. I scarcely need recur to the history of the times when trade was principally suspended in this country, to show how severely the suspension operated upon every class of our citizens, and in every part of the country. This period in our political annals will be long remembered. So great was the distress in some States, and agricultural States, too, that their Legislatures deemed it necessary, for the protection of the debtor from the power of his creditor, to stay the administration of justice, and prohibit by statute the issuing of an execution for the collection of any debt.

This proves the connection which subsists between the two great agricultural and commercial interests of this country. Agriculture, commerce, and manufactures constitute the source of our wealth, revenue, and prosperity. To foster and cherish the principles upon which rest our existing hopes and future prospects, can never be a question of doubtful policy with a wise and patriotic legislature.

We have seen that commerce is essential to our interests; but commerce will not flourish without credit. It never has prospered independent of credit. As credit is essential to trade, so is punctuality to support credit. Look at the business of any commercial people, and see how much of it is done upon credit; and see the integrity and fidelity with which punctuality is maintained in order to support their credit.

For several centuries past, banks have been the successful medium through which credit has not only been preserved, but great wealth acquired. This assertion is warranted by the history of these institutions, and of the countries where they have been patronized. The first bank established in Europe, was at Genoa, in 1407 – four hundred and four years ago; this was soon followed by one at Venice.

The Bank of Amsterdam was established in 1609, and shortly after those of Hamburg and Rotterdam; and the Bank of England in 1694; the Royal Bank at Paris in 1718; the Bank of North America in 1784 – a memorable period in our history – and the Bank of the United States in 1791.

All these different institutions show, that enlightened legislators have entertained but one opinion upon this subject both in Europe and America for the last four hundred years. They have seen and acknowledged their utility. Banks have long since been considered not only essentially useful in the transaction of commercial concerns, but as highly necessary to aid the fiscal operations of Government. And a more unanswerable argument cannot be urged in favor of their general utility than their uniform success; to this may be added the prosperity of the people and the countries where banks have been supported. Their immediate advantages are, a convenient circulating medium; the safe depository they afford for cash and funds. And they serve to keep the standard of money steady and correct; to insure punctuality; to preserve credit; to inspire confidence, and to promote a spirit of industry and enterprise. They are not, as many have supposed, in their nature hostile to Government and dangerous to liberty. They rather form a barrier to tyranny and oppression. Their principal business is to lend money at the common rate of interest, and thus prevent usury. The owners of banks are generally rich men, who have not only their personal liberty, but a large property to risk, by sedition, treason, and rebellion. It is their interest to resist oppression. We need scarcely point to the Continent of Europe for proof of the fact, when we assert, that trade and banks cannot flourish where despotism prevails. Despotic power generally ruins trade and banks, but no instance occurs in history where banks, not under the control of Government, have ruined a State. A bank owned by Government, and under its command, would be an engine dangerous to the people. But when owned by individuals, neither the people nor the Government have any thing to fear from it. It is then dependent on both for its business, prosperity, and usefulness.

With the evidence which both history and experience offer to our reflection, we cannot doubt the utility of banks, nor deny but that they have been beneficial to us. And we are justified in the conclusion, that, under proper regulations, they may subserve the best interests of the people of the United States. They are now in successful operation in almost every State in the Union, and that they have been useful, the present prosperous state of the country abundantly proves. We enjoy as perfect security for life, liberty, and property, as any people under any Government ever did. These are the great objects of a good Government. And we may triumphantly ask, where is the nation or people that enjoy these with more freedom and safety than the American people? A parallel for our liberty and prosperity, for the last twenty years, is not to be found in the history of man. Our wealth, population, and resources, have increased beyond what any one would have calculated or imagined, and beyond what strangers and foreigners now believe. Industry, wealth, and contentment, pervade every quarter of our country, and poverty and oppression are unknown to our citizens.

In 1791, the year this bank was incorporated, our exports amounted to about eighteen millions of dollars; and in 1804, they had increased to about seventy-six millions, gaining in thirteen years fifty-eight millions; and our tonnage in about the same proportion.

Much of this prosperity is to be attributed to the active capital which has excited industry, and a spirit of enterprise among us, and the activity of this capital has been in a great degree created and promoted by the Bank of the United States. Its operations have been extensive in all our trading towns. It has aided in loans and discounts, and assisted in the collection, safe-keeping, and transmission of our revenues. It has been the depository of our Treasury, and is now become incorporated with the administration of the fiscal department of our Government. The connection which it has formed with almost every branch of business in the country, is not slight and trifling, and so easily to be severed as some seem to believe. Its operations are deeply interwoven with the dealings and concerns of all the men of business in the United States.

With a capital of ten millions, it has furnished accommodations of fifteen millions a year. This has been employed principally in trade; in making prompt and cash payments to our farmers for their produce. This, again, has furnished to our citizens a ready and profitable market for every article of produce. These high profits of a good market have gone into the hands of the farmer, to cultivate, improve, and enrich the country. And travel through any State in the Union, and their effects may be readily seen, affording a prospect, consoling and elevating to the philanthropist and the patriot. The land is highly cultivated, good buildings, turnpike roads, bridges, and other expensive improvement, indicate the wealth of our citizens, and the prosperity of the country. Money has been freely circulated, trade has been active, produce high, and our country has been improved by these unexampled advantages to a degree far beyond what the most sanguine calculations, twenty years ago, could have anticipated. And yet, sir, we are gravely told that this bank has nearly ruined the country; that it is threatening our best interests with destruction. As well might gentlemen tell us that total darkness prevails at noon-day, or that the sun, in his meridian splendor, affords neither light nor heat to any part of this globe.

The principal portion of the trade and business of the United States has been conducted by a paper medium; metallic has scarcely been seen. The amount of this circulating medium is, say fifty millions. Now what is proposed by denying a renewal of the United States' Bank charter? That this bank shall close its concerns, and of course stop all its accommodations. This must necessarily check and change at least one-third of the circulating medium of the country. It will undeniably require $24,000,000 to be directed to one operation, and for a time to one point – for the capital is $10,000,000; this is to be collected to divide among the stockholders. There are $19,000,000 due to the bank; this must be collected. This will occasion a demand for this amount from other sources; it must be paid. And the $5,000,000 in the bank makes the sum of $24,000,000, which must be suddenly called in. The effect this will have upon the various interests in the country can neither be described nor conceived. It must inevitably give a general and heavy shock to all paper credit; this credit, so much and profitably in operation, must receive a severe, if not a mortal wound. And what substitute have we for this when it shall be destroyed? Silver and gold coin cannot be relied on. There is not from the best estimate an amount to exceed $10,000,000 specie in all our cities and trading towns, and this will be collected by this bank. The price of all stocks, and every kind of produce and species of property must suffer a great depression, for a scarcity of money enhances its value, and consequently depresses the value of every other species of property. That this sudden, if not total change in our system, must occasion great embarrassment, produce failures, disappointments, and distress, among our citizens, is certain.

Put down this bank, and how then are your revenues to be collected? Through the medium of the State banks? You do what no prudent man, in his individual concerns, would think of doing. You discard a faithful, honest, responsible agent, whose integrity and fidelity you have known for twenty years, and you place your estate in the hands and at the disposal of twenty or thirty entire strangers, of whose character and responsibility you know nothing, nor have the means of acquiring any knowledge, and over whose conduct you have no control. Should an individual act thus with his property, he would be deemed to have lost all regard for it, if not considered a madman. In resorting to the State banks, we are offering the amount of our revenue as a bounty for intrigues, cabals, and factions, through the country. In almost every State there are a number of banks, and each will endeavor to get the revenue collected in that State, to keep and trade with. It must be given to one, or divided among them all. If one is selected as the favorite, all the rest become jealous, dissatisfied, and exert their capital and influence against the favorite bank and its patron, the Government. This will awaken a spirit of faction in every State, yet unknown in this country. If all are to be gratified in their request for the deposits, the Government must open separate accounts with all the different banks in the country, to the amount of fifty or sixty; and new companies will be formed, and new applicants request to divide the business, and share the profits. Indeed, there will be no end to the scenes of speculation and intrigue, which will soon appear, if this course is adopted by the Government.

Mr. Seybert. – It may be said that this subject has been exhausted by the discussions of the ablest politicians of the country. I will premise, the remarks which I shall offer are intended solely to justify the vote which it is my intention to give on this momentous occasion.

The question pending the United States' Bank has excited a peculiar interest throughout this nation, more especially in our seaports. The dissolution of this institution, which from its limitation, will expire on the fourth of March next, has been portrayed in colors of the darkest shades, and the distresses which many maintain will be consequent to that event, call seriously for a fair and deliberate investigation. I hope, sir, I shall be pardoned for imposing on the patience of the House, when it is recollected that the community which I represent have employed four-tenths of the capital stock of the United States' Bank. If evil consequences are to attend the dissolution of this establishment, or if beneficial results proceed from its continuance, in either case I must feel myself essentially interested; it is therefore my wish to be distinctly understood upon the important principles which have connection with the great question now before us.

At the last session of Congress, I presented the memorial of the President, Directors, and Stockholders of the Bank of the United States; at that time I entertained no positive opinion on the subject; the discussions which took place in the committee to whom the memorial was referred, necessarily, as a duty on my part, excited that attention which the importance of the question imperiously demanded. Under circumstances of doubt, I voted in favor of reporting a resolution in support of the bank, for the purpose of giving to the establishment every chance which reason could urge; at the same time reserving to myself the right to pronounce a final decision, according as policy and expediency, but more especially as principle should dictate. I will admit, sir, that this is not the time or place to institute the general inquiry, whether banks are or are not beneficial to a nation? Because, whether the charter of the United States' Bank be renewed or not, the several States, who have the unquestioned authority to incorporate bank establishments, have already created many, which it is not in our power to control. I do not hesitate to declare, though many persons in the United States are decidedly opposed to a banking system, under every possible circumstance, I am not of this class. Experience has proved, in a manner very satisfactory to my mind, the advantages which are derived from the banks when they are impartially directed, and when the accommodation afforded by them is prudently employed; the great difficulty seems to be to confine the system within its proper limits. I understand the proposition as applicable to the agricultural, manufacturing, and commercial interests of the United States.

For my proofs of this proposition, I will not rely upon the famous Bank of St. George, at Genoa, whose authority, by a gentleman from New York, (Mr. Fisk,) has been considered of much weight. I will recall to the mind of my friend the remark of an intelligent traveller, who, when he visited this bank of antiquity, exclaimed: Here lies concealed the enigma, whether the bank possesses millions of millions, or whether it is indebted millions of millions! He concludes, Upon this important secret rests the safety of the State. Unhappy State, say I, whose safety depends upon a secret concealed within the vaults of a bank. Perhaps to a development of this secret may we attribute the present servile condition of the people of the once far-famed and powerful Republic of Genoa.

Sir, I am decidedly opposed to a prominent, and what to me appears to be a very dangerous feature in the bill now under consideration. I allude to the eighth section, which admits of an increase of the present capital stock of the bank. Adopt this provision, you will thereby create an Herculean power, which will have at its mercy all the minor institutions of the States; thus constituted, it can oppress and destroy them, as whim or interest may dictate. The steps which have been taken preparatory to a dissolution of the present bank, it is said, occasion much embarrassment, and threaten with ruin many of our citizens; if the present capital of ten millions can thus affect society, who will pretend to accumulate present evils, or risk entailing misery on posterity, solely for the purpose of a temporary gain to the Government? In this question Pennsylvania is deeply concerned; she has several millions of dollars invested in her banks; this to her is a valuable source of revenue; upon this may she predicate much of her future prosperity; hence will she derive the funds requisite for future internal improvements; but if you fill up the blanks in this section with a considerable sum, all these prospects will be blasted forever; you will thereby destroy the tree from whose ramifications were to emanate the blessings of peace and the sinews of war. Those of her representatives who may deem it politic and constitutional to vote for a continuance of the charter of the United States' Bank, ought surely to oppose any increase of the present capital; we have been told that that which now exists has been found sufficient for all purposes, at a time when our commerce was much more extensive than we have reason to suppose will soon again be the case.

The history of the banks in our country informs us, that the one usually termed the Bank of North America was the first establishment of the kind which received the sanction of the Government. This institution was incorporated by an act of Congress, in the month of May, 1781, under the authority of the "Articles of Confederation." The present Bank of the United States was incorporated by an act of Congress, on the 25th of February, 1791, during the operation of the present Constitution of the United States.

Without an attempt to examine every hypothesis, which has been or which might be proposed, respecting the constitutionality of the principle, I will content myself with the statement of the case, such as it appears to my mind. The first public act which I performed as a member of the Congress of the United States, was, to swear solemnly that I would support the Constitution of the United States. It therefore is my duty to examine and consider its precepts, according to the best of my ability.

The "Articles of Confederation" and the present Constitution of the United States do not differ as regards any power delegated by the States to Congress, touching charters of incorporation. I can never persuade myself that the constitution was intended other than to have a definite meaning; or that it was ever contemplated to speak an equivocal language; ambiguity arises solely from the misconceptions of its interpreters; it is very plain and of easy comprehension, especially as it relates to the present question, since it is totally silent on the right to create corporations – its wisdom is further illustrated by the special provision for the only exclusive privilege which is consistent with a free and equal government, and that is in favor of genius.

The powers delegated by the States are special and defined, and, it is expressly declared by the constitution, that "the powers not delegated to the United States by the constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." This language needs no interpretation. I cannot for a moment permit myself to suppose, that the patriots who were tested during the long-continued uncertainty of the most important events of our Revolutionary period, and to whom was ultimately assigned the right and power to construct the instrument which is to guide us in the political labyrinth – that they intended this their great work should alone be explicable by that refined reasoning to which common sense is a stranger, I never can admit. Surely that which they framed for the good and security of every individual in the nation, must be expressed in a manner to be understood by ordinary men, and those whom it was intended to direct. Sir, if simplicity was not originally contemplated by the framers of the constitution, why the imposition on the people in publishing it to the world? Was it not a prodigal waste of labor and materials, to furnish every citizen of our country with a copy of that which can only be understood by professional men, or such as are eminently skilled in scholastic research? It had better remain a secret, concealed amongst the musty rolls in the archives of State, than be a puzzle for mankind. As long as this instrument is preserved pure and untarnished, it will receive a becoming respect from your fellow-citizens – it will be regarded as "the stupendous fabric of human invention." Remember, the present argument, in several important points of view, affects posterity in common with ourselves. You had better commit the unintelligible jargon to the flames, than by the agency of construction, neutralize wisdom by folly. Sir, if we have a constitution which the people cannot understand, I then say, cut the original into slips, and provide the means for a better; or, if that is not to be done, and we are to be ruled by the iron hand of power, in that case, as one of the American people, I will pray you to be graciously pleased to grant a plain bill of rights for our better government.

If we look back, and attentively view the occurrences which took place, when the law incorporating the present bank of the United States was enacted, we shall find our reasoning supported and confirmed by many important circumstances; we shall then perceive, that the act of incorporation was opposed on constitutional ground, by men who were and continue to be esteemed for their talents, political skill, judicial knowledge, probity and patriotism; and it has been admitted, that the arguments formerly urged are unanswerable. That the power to create corporations was never intended to be ceded on the part of the United States, is proved beyond all manner of contradiction; for we are told by the highest authority, by one who was a member of the General Convention, that it had been proposed to cede to Congress the power to create corporations, and that the proposition was rejected, after a deliberate discussion. In my opinion this decision is in proof of the sagacity and wisdom of those who made it; it was highly justifiable to retain this power to be exercised by the States; because, corporations are generally founded on circumstances, which are entirely local – as such, they can be better understood by the Legislatures of the respective States, than by that of the General Government.

The experience of every session proves that the decisions of Congress vary with the men who at different times compose that body; therefore, the act of February, 1791, can have no force in settling the principle contended for.

I have heard it urged, that the States have recognized the constitutionality of the United States' Bank, by their laws. I know of no law in any of the States, which declares this charter constitutional. Were it even proved, that several of the States had published this declaration, with me it would signify nothing, unless the sanction of two thirds of the States was thus had. On a former occasion, several of the States were induced, from peculiar circumstances, to relinquish for a time their right in favor of a particular case – I allude to the first establishment of the Bank of North America. If this had been intended to decide this very important question, without any reservation of their power in other cases, they would have expressed it in the most positive and unequivocal manner.