the action of Congress constitutional, but Jackson succeeded to his own satisfaction in deducing the conclusion that if Congress, or any part thereof, should afterward hold another opinion, the act then in operation was unconstitutional.

Acting in accordance with this rather curious chain of reasoning, the President proceeded to declare the bill for the recharter of the bank unconstitutional, because he disapproved it. He thought it unnecessary that Congress should grant the monopoly without allowing open competition for it, particularly since much of the stock in the bank seeking a recharter was held by foreigners. He thought it unnecessary that the bank should have power to locate its branches where it thought fit. It is impossible in this connection, however, to go into all the curious financial ideas embodied in the veto message. It is sufficient to say that President Jackson reversed the decision of President Madison as to the constitutionality of the bank charter, and supported his position by a distorted argument.

§ 58. Tyler's Bank veto. John Tyler when in the Senate had supported Jackson in his attack on the bank; had agreed with Van Buren in his opposition to the revival of the bank; and felt sure that the "popular voice" approved Van Buren's course. When in 1841 he unexpectedly became President, he found himself obliged to accept the Whig policy of a bank, and agreed to give his assent to any bank bill that was constitutional. Notwithstanding the symptoms of a breach with their President, the Whigs passed a bank bill through Congress. It was not a bill that satisfied any one,1 but it accomplished the object of forcing an issue with the President. It was generally considered certain that the President would not listen to dictation, at least in this matter; and no one was really very much surprised when the Senate received a message on August 16, 1841, vetoing the bill.3

The President's reasons for vetoing the bill were twofold. In the first place he declared that approval would be inconsistent with his previous expressions on the subject. In the second place the

1 Niles, Register, LXI, 93.

2 Von Holst, Constitutional History of the United States, II, 424.

3 Appendix A, No. 23; Benton, Thirty Years in the U. S. Senate, II, chaps. lxxv,

lxxxi-lxxxiii.

+ Von Holst declares that "Tyler had too little firmness of character and too much vanity to be able to face the reproach that he had been unfaithful to his earlier convictions, because he did not dare defy the Whigs."-Constitutional History of the United States, II, 425.

President considered the bill unconstitutional because it established a bank with power to locate branches wherever it chose without the consent of the States within whose boundaries the branches were to be placed. This position is scarcely tenable. The Supreme Court had decided that a national bank was a necessary and proper means for carrying on the government, and therefore constitutional. But if the government was to make use of this constitutional agent in the conduct of its affairs, in collecting revenue, establishing revenue, and furnishing currency, — it must surely have the power to put the bank, or its branches, where they would be most effective; yet this is the very power which is denied by President Tyler. Clearly he was wrong for if the Constitution gave the government the power to establish a bank without the consent of the States, the consent of the States was not essential for the establishment of necessary branches of the bank.

The Whig leaders at once drew up a bill designed to avoid the objections against the first bill. It was entitled, “An act to provide for the better collection, safe keeping, and disbursement of the public revenue, by means of a corporation to be styled the Fiscal Corporation of the United States." September 9, 1841, Tyler vetoed it.1 The President's main objection to this bill, as to the last one, appears to be that the bank could establish branches in the various States without their consent. He also objected to the provision which allowed the bank to deal in bills of exchange drawn in one State, payable in another, and running an unlimited time. He further objected to the failure to place a limit on the premium on these bills. Since the measure had been drawn by the Whigs in accordance with the ideas and wishes expressed by the President, the veto greatly enraged them. That portion of the debate in Congress which is reported consists for the most part of a very sharp arraignment of the President by Mr. Botts,2 in which he discussed in no gentle fashion Tyler's vacillating political policy. During the course of his speech, he took occasion to say "that the President had changed his opinion since this session opened just as often as the sun had risen, and it had lasted now some one hundred and twenty days." 3

1 Appendix A, No. 23.

2 Congressional Globe, 27 Cong., I sess., 447-449.

3 Ibid., 448.

$ 59. Criticism of the Bank vetoes. Whatever the causes of Tyler's vetoes, however unsound his constitutional positions, and however justified the wrath of the Whigs, there can scarcely be any doubt that he did the country good service when he vetoed the bank bills. The creation of such a huge machine as the "Fiscal Corporation," closely connected with the government and parties as it must have been, could not have gained the confidence of bankers and financiers, and would always have been an object of party attack, and a fatally easy means of corruption and political dishonesty.

After the retirement of Tyler, the Whigs never again controlled both Houses and the executive at the same time; the Democrats finally established the independent treasury system inaugurated under Van Buren and repealed in 1841, and were in principle opposed to a bank. The Republican party created the compromise system of numerous so-called national banks, and there has been but one instance in which a President has felt called upon to interpose his veto even against details of bills affecting that system.

1

Congress in 1881 passed an act retiring the "new fives" issued under the funding act of 1870, and authorizing in their stead three and one-half per cent bonds which were to run forty years. March 3, 1881, President Hayes vetoed the bill on the ground that it was a "step in the direction of the destruction of the national banking system." It provided that after July 1, 1881, no bonds could be deposited by national banks as security which bore a greater interest than three per cent. This provision the President declared would prevent the future establishment of national banks except in the few large financial centres where the prevailing rates of interest are extremely low. The measure would also threaten the existence of the banks already established through the additional disadvantages to which it would subject them. The President then briefly referred to the great success of the national bank system with its almost indispensable advantages, and concluded that he could not approve any measure which, like the present one, unnecessarily attacked that system.

§ 60. Currency and coinage. Closely connected with the tariff and bank bills, are bills which treat of currency and coinage.

1 Appendix A, No. 128.

Vetoes of such bills have been comparatively few in number, but some of them have been exceedingly interesting.

March 3, 1837, at "11.45 P.M." President Jackson signed the veto of a bill entitled, “An act designating and limiting the funds receivable for the revenues of the United States." The bill was intended to repeal or nullify the specie circular. The friends of the measure had declared it to mean that the deposit banks and the Secretary of the Treasury must receive the notes of all specie paying banks in payment of duties or for public land. The President on the other hand held that the bill merely permitted the secretary and the deposit banks to receive the notes of specie paying banks. In this position he was supported by the Attorney General, who, however, considered the meaning of the bill ambiguous and liable to misinterpretation. The President did not review the bill either as interpreted by himself and the Attorney General, or as interpreted by its friends. He declared it to be ambiguous, and vetoed it for that reason. It is not difficult, however, to read between the lines of the message that the President's real objection to the measure was that it nullified the specie circular.2

The disposition made of this veto message is somewhat remarkable and strictly Jacksonian. It was signed within fifteen minutes of the end of the President's term of office. He could not send it to the existing Congress, and when the next Congress met, Jackson would be a private citizen without opportunity to submit a pocket veto message. He was determined, however, that his views. on the subject should be left on record; he therefore caused the message, together with the bill and the Attorney General's opinion on it to be deposited in the Department of State. It is the only instance in which a veto message has been thus preserved instead of in the journals of one or both of the Houses.

June 23, 1862, President Lincoln vetoed a bill entitled, "An act to repeal that part of an act of Congress which prohibits the circulation of bank notes of a less denomination than five dollars in the District of Columbia."4 The President objected to the bill on the ground that if a few banks were privileged to issue such notes, all the banks in the District would issue them, whether

1 Appendix A, No. 21.

2 Bolles, Financial History of the United States, II, 350.

3 Senate, Miscellaneous Documents, 49 Cong., 2 sess., No. 53, p. 151.
4 Appendix A, No. 50.

with or without authorization, and that it would be impracticable to prevent such unauthorized issue. The natural effect would be a deterioration of the currency in the District of Columbia, to the serious injury of trade. The President further suggested that the object contemplated, namely, providing the District with small bills, could be easily and unobjectionably attained by government issues.

§ 61. Inflation bill. April 22, 1874, President Grant vetoed what is commonly known as the inflation bill, providing that the issue of legal tender notes and of national bank-notes should each be increased to four hundred million dollars. The President pointed out that the bill practically increased the paper circulation of the country one hundred million dollars, and would eventually lead to a still greater inflation of the currency. His fear was justified. For it is a fact proved by experience that the more irredeemable paper a government issues, the greater is the call for it, and the greater the apparent scarcity of money..

The President added that not only was he opposed to inflation on principle, but that in this particular instance the government had practically pledged itself to contract the irredeemable currency instead of inflating it. In support of his assertion, he quoted the statement made by Secretary McCulloch at the close of the war to the effect that specie payment should be resumed as soon as possible; and the warm approval of that principle by the House of Representatives on December 5, 1865.2 Furthermore, on March 18, 1869,3 Congress had passed an act which solemnly pledged the faith of the United States to make provision at the earliest practicable period for the redemption of the United States notes in coin.

Inflation was urged upon Congress by the "debtor class," 4. a class which at that time may even have included some Congressmen. Throughout the country men were eager for inflation. as a means of raising prices, and thus diminishing their burdens of debt.5 The President had argued incidentally that inflation would impair the obligation of contracts, both public and private.

1 Appendix A, No. 92.

2 Congressional Globe, 39 Cong., I sess., 10.

8 16 Stats. at Large, I.

4 House Report, 43 Cong., 2 sess., No. 328.

5 Bolles, Financial History of the United States, III, 285.