XXXVII. 1837. CHAP. were published in the United States, were enlisted in the war against the banks. This is nothing extraordinary: the press invariably fans the passions of the moment, and follows the wishes of the numerical majority of its readers. By this means, and the unceasing activity of the whole political agents of the majority over the Union, the people beyond the sphere of the commercial towns were worked up to a state of perfect frenzy against the banks; and General Jackson's war against the United States banks was regarded with as much enthusiasm as ever his defence. of New Orleans had been. Since the fervour of France in 1789, and of England in 1832, nothing in the world had been seen like it. The cry "Bank or no Bank!" i. 66, 67, 339. 1 Chevalier, convulsed the Union as violently as that of "Liberté et Egalité!" had done France, or "The Bill, the whole Bill, and nothing but the Bill!" had shaken England.1 The ostensible grounds of complaint preferred by the President against the banks were-1st, That they had intrigued to obtain the renewal of their charter during the session 1831-2, in order either to force him to consent to it, or throw all their adherents into opposition to him at the next election. 2d, That they had exerted their influence against him in the election of 1832, and increased their discounts by 28,500,000 dollars to augment their own. 3d, That they had corrupted the press, especially in the commercial towns, to support their cause. The banks answered-1st, That the President had, in his opening address to the Congress in 1831, recommended the bank question to their consideration, with a view to its early decision. 2d, That the increase of their discounts had been no more than was required by the extension and necessities of commerce. 3d, That being menaced with destruction from a powerful party in the State, with the President at its head, they were perfectly entitled to defend themselves at the bar of public opinion, and that no way of doing that could be so safe and legitimate as reprinting the speeches of enlightened men XXXVII. 1837. in their favour, which was all they had done. These CHAP. were the ostensible grounds of debate between the parties; the real causes of discord were very different, and were as carefully concealed as the pretended ones were ostentatiously put forward. They were the inherent jealousy, on the one hand, of democracy at eminence. foreign to itself, whether in rank, fortune, genius, learning, or accomplishment; and the vanity of newborn wealth on the other, which sought to overbear all other interests in the State by the sway of capital, and had imprudently let fall hints, that the time was not far Ann. Reg. distant when, by means of the influence of mercantile 1834, 467. advances, they would gain the entire command of the i. 64, 69. State.1 1 1833, 469; Chevalier, the Demo crats pro voked by banks in settlements. The democratic party were the more alarmed at the 16. growing influence of the bank interest in the Union, Enmity of from the vast extension of paper advances which had tra recently taken place for the purchase of lots of waste the extenlands in the back settlements. These rude agricultural sion of districts, the cradles of a sturdy and robust democracy, the back had hitherto been their stronghold, and enabled them, by their rapid extension, to outvote the commercial towns on the coast, which were for the most part in the opposite interest. But when banks were established in all the back settlements, and made liberal advances to settlers to enable them to purchase lots of the public lands, upon the security of the deposit of their titledeeds, this source of power was likely not only to be lost to them, but gained to their enemies. It is well known that there is no influence so difficult to resist as that of a creditor; and when nearly all the settlers on the frontier in the valley of the Mississippi had purchased their freeholds with money advanced by banks with whom their title-deeds were deposited, it was easy to see that a great, and to the Democrats most alarming, source of influence was opened up in what had hitherto been the centre of their power. Had the Government XXXVII. 1837. CHAP. been animated by a real patriotic spirit, what they should have done, obviously, was to have retained the credit system, under which the nation had made such unparalleled progress, but put it under such regulations as should have checked the over-issue of paper, and secured the stability of such as was in circulation. But being actuated, not by the enlightened spirit of patriotism, but the blind passions of faction, they did just the reverse, and adopted a course of measures which brought ruin upon the banks, bankruptcy and desolation upon the country, and the effects of which, extending beyond the Atlantic, produced a crisis of the most terrible kind in Great Britain, a crisis which was the main cause of the longcontinued suffering which terminated in the entire change of her commercial policy. 17. ment of the Jackson vetoes the renewal of bill for the the Bank Charter. The charter of the United States Bank being only for Commence- twenty years from 1816, the directors of that establishcontest. ment, under the direction of their able chairman Mr Biddle, brought forward a bill in 1832 to authorise the renewal of the charter for the like term of years. This was the signal for the deadly strife which ensued. War to the knife was immediately proclaimed by the whole democratic party over the Union, not only against the United States Bank, but against all the banks in the country, no matter how long their establishment, how high their credit, how widespread their beneficence. The creatures of their bounty, the citizens who owed their all to their courageous enterprise, the holders of fields won from the forest by their advances, were the first, like the serpent in the fable, when warmed into life, to sting their benefactors. The legislature, however, took a more enlightened view of the subject, and after the publication of very able reports, which went fully March 7, into the subject, both houses of Congress passed the bill, renewing the charter of the United States Bank by considerable majorities. But the democratic party were not discouraged. Secure of the concurrence of General 1832. 1837. 1 Ann. Reg. Jackson, the President, they raised such a clamour CHAP. against the Bank in the newspapers, that he was induced XXXVII. to oppose the VETO which the constitution intrusted to him to the bill. It was the old story of Rome over 1832, 279; again democratic ambition, led on by a dictator, was 300. crushing the aristocracy of property and intelligence.1 1833, 299, 18. al of the public de the United Bank. 1833. Not content with putting a negative on the act passed by the Congress renewing the bank charter, General WithdrawJackson, in the succeeding year, went a step farther, and took the very hazardous step of withdrawing the whole posits from public deposits from the United States Bank and its States branches, and handing them over to the local banks.* Sept. 18, No step could be imagined more hazardous in a mercantile point of view, as it implied such a serious distrust of the solvency of the first banking establishment in the country, as could hardly fail to shake its stability and that of all similar establishments; but as a mere party-move, it was well conceived, as it tended to divide the banking interest, and give the local banks, which got the deposits on interest, to remain at least neuter in the effort to destroy the United States Bank, from which they had been taken. Once taken, however, the decisive step was attended by the effects which might have been anticipated. The * The principal charge brought against the Bank, in a paper justifying this step, published on 18th September 1833, was this: "Although the charter of the Bank was approaching its termination, and the Bank was aware it was the intention of Government to use the public deposits as fast as they accrued in the payment of the public debt, yet it did extend its loans, from January 1831 to May 1832, from 32,402,304 dollars to 70,428,070 dollars, being an increase of 28,056,766 dollars in sixteen months. It is confidently believed that the leading object of this immense extension of its loans was to bring as large a portion of the people under its power and influence as possible, and it has been disclosed that some of the largest loans were granted on very unusual terms to conductors of the public press. In some of these cases, the motives were made manifest by the nominal or insufficient security taken for the loans, by the large amounts discounted, by the extraordinary time allowed for payment, and especially by the subsequent conduct of those receiving the accommodation." It was to compel the President to take his stand that the bill was brought forward for the renewal of the Bank Charter at the time it was. He met the challenge, willingly took the position into which his adversaries sought to force him, and frankly declared his unalterable opposition to the Bank, as being both unconstitutional and inexpedient.-GENERAL JACKSON'S Memoir, Sept. 18, 1832; Ann. Reg. 1833, p. 300, note. 1837. CHAP. United States Bank, thus violently assailed, and openly XXXVII. charged with insolvency by the Government, was compelled, in its own defence, suddenly, and to a great extent, to contract its operations. This, like all similar changes brought about in the midst of a period of high prosperity and great undertakings, gave a violent shock to credit, produced a similar contraction of issues on the part of all other banks, and speedily spread embarrassment and insolvency throughout the community. These disasters were immediately taken advantage of by the democratic party, who represented them as the fatal 1 Ann. Reg. result of the banking system, when, in fact, it was the 300; Che consequence of the impediment thrown in the way of its operations, as the effect of the extension of credit, when, in truth, it was so of its contraction.1 1833, 299, valier, i. 66, 67. 19. Which is approved of by the House of tives, and condemned by the Senate. These violent stretches on the part of the democratic President caused, as soon as Congress met, stormy debates in both houses, which were contemporaneous with Represents meetings on the subject, when the most violent language was used on both sides in every part of the Union. The House of Representatives, by a majority of 15 in a house of 240, approved of the measures of the President, and passed resolutions, that the charter of the Bank should not be renewed, and that the public deposits should not be restored to it. On the other hand, the Senate, by a majority of 26 in a house of 46, voted " that the President, in the late executive proceedings, had assumed to himself authority and power not conferred by the constitution and laws, but in derogation of both." * Thus the two houses, as in England on the Reform Bill, were brought into direct collision; and this was the more serious, that the Senate shared with the President the executive authority, and formed the court before which he * The Senate in the United States consists of forty-eight members, two for each state of the Union, elected by their legislatures. The House of Representatives is elected by the direct suffrage of the inhabitants. From the former being the result of a double election, it is in general more identified with the interests of property than the latter, chosen directly by universal suffrage. |