1 XXXVII. 1838, 489, 31. crisis in is believed, unparalleled in any other age or country.* CHAP. Notwithstanding all this, and though they themselves were the greatest sufferers from their own measures, the 1838. Government, trusting to a majority of ten in the House of Representatives, still clung with invincible tenacity to the measures of hostility to the banks, grounded avowedly on their jealousy of the weight and influence which the banks, from their vast capital and liberal advances, Ann. Reg. had acquired in the country, and which threatened to 490. wrest the sceptre of government from the republicans.1 + The suspension of the crisis by the issue of the longdated bills accepted by the English houses, proved, as Increased already mentioned, only temporary. Such was the 18:8 and scarcity of specie, in consequence of its being locked up United in the western banks, that the banks on the coast were compelled to apply to England for assistance before they could resume cash payments; and the Bank of England, with praiseworthy liberality, in April 1838, remitted the United States Bank £1,000,000 in specie. This enabled them to resume payments in specie, and recommence operations on a large scale, which soon restored credit, as all the other banks did the same. Their efforts were immediately directed to arrest the fall in the price of cotton, the great article of common export, which had fallen, in consequence of the measures of the Government, to 4d. a pound, "I submit to the consideration of Congress a statement prepared by the Secretary to the Treasury, by which it appears that the United States, with over 28,000,000 dollars in deposit with the States, and over 15,000,000 dollars due from individuals and bauks, are, from the situation in which these funds are placed, in immediate danger of being unable to discharge with good faith and promptitude the various pecuniary obligations of the Government." — President's Message, April 5, 1838; Ann. Reg. 1838, 490. "The number of State banks and branches is now 829. The number of presidents, directors, and other officers, is not over-estimated at 8200. The number of holders of bank stock may be safely estimated at 320,000, and the number of debtors, exclusive of stockholders, at 65,000. The capital of all the banks is about 317,636,770 dollars, and the amount of their loans is 485,631,867 dollars. If the minor banks were to act in subservience to the monarch of the great banking system, on whom the inexorable laws of credit and of trade confer the power to crush or caress them according to his uncontrollable will, who could withstand them?"- Address of Republican Members of Congress, July 6, 1838; Ann. Reg. 1838, p. 491. 1839 in the States. CHAP. being not a third of what it had been three years before, XXXVII. and that although the last crop had been deficient rather 1839. than the reverse. For this purpose they made immense advances on long-dated bills, drawn on and accepted by houses in England to the holders of cotton, to prevent their stock being forced into the English market at these ruinously low prices.* The operation, which was indispensable to arrest the ruin of the country, succeeded for a time, and prices of cotton rose considerably in the first half of 1839; but, unhappily, the crash which ensued at that time in England utterly destroyed the means of carrying it forward. The Bank of England itself, as will immediately appear, nearly as hard pressed as the banks of America, was obliged, in the autumn of 1839, rapidly and rigidly to contract its advances; the houses which had accepted the long-dated bills became bankrupt; and the consequence was, that the crash came on again in America, after this vain attempt to arrest it, with more severity than ever. The United States Bank stopped payment, finally and irrecoverably, on the 5th October; all the other banks, in the southern States of 1 Tooke on the Union, suspended cash payments; and before the end 401, ii. 59; of the year, nine-tenths of the whole commercial houses 1839, 425. in America were bankrupt, and nearly the whole commercial wealth of the country was swept away.1 Oct. 5, 1839. Prices, ii. Ann. Reg. 32. effect of these measures on the United States. So far the design of the democrats had been entirely Disastrous successful; the crusade against property had accomplished all for which it was intended. The banks were ruined; the "commercial aristocracy," the object of so much jealousy, was destroyed; all effectual resistance to democratic rule in the legislature was at an end. The little uninformed sturdy voters in the western States had XXXVII. 1839. now got the entire command of the country. Immense CHAP. was the effect of this change upon the government and policy of America; the revolution was as great and irremediable as that of 1789 had been in France-that of 1832 in Great Britain. But at what price was this victory gained? At that of the national wealth, the national happiness, the national honour. Foreign commerce was almost destroyed; that with England was reduced to little more than a fourth of its former amount.* The embarrassment in the interior, from the failure of the customs and the diminished sales of the public lands, became so great that payment of public debts was impossible, since no legislator had ever ventured, for general and national objects, to pronounce the words direct taxation. Thence the REPUDIATION OF STATE DEBTS, which, as will hereafter appear, became general in the United States, and has affixed a lasting and ineffaceable stain on the national honour, and on the character of the people for common honesty. Thence, too, has arisen a grasping disposition on the part of the ruling multitude, who sought in foreign conquest an escape from the consequences of domestic mismanagement, which has brought them into constant broils with their neighbours in every direction, and made "filibustering" abroad as common as repudiation of debts at home. Such have been the direct and * EXPORTS OF GREAT BRITAIN TO THE UNITED STATES FROM 1835 TO 1842. +"Our progress in prosperity has indeed been the wonder of the world, but this prosperity has done much to counteract the ennobling influences of free institutions. The peculiar circumstances of the country and of our times have poured in upon us a torrent of wealth, and human nature has not been strong enough for the assault of such severe temptation. Prosperity has become dearer than freedom. Government is regarded more as a means of enriching the country than of securing private rights. We have become wedded to gain as our chief good. That under the predominance of this degrad CHAP. immediate effects of the ascendancy of numbers over proXXXVII. perty, and the unchecked sway of the majority in the 1839. 33. Effect of these America England. Government. Connected with the United States by a traffic which had come to reach £12,000,000 a-year, it was impossible changes in that Great Britain should not feel in the highest degree Anna on the consequences of this long-continued train of disasters, produced by the crusade of the democratic party against the banks in America. It produced effects, accordingly, of lasting importance on this side of the Atlantic, and which render an account of these Transatlantic proceedings a necessary prelude to the narrative of the great social changes ere long to commence in England. But independent of this cause of paramount importance and irresistible force, there were other causes tending to the same result in the British Islands, and which, acting ing passion, the higher virtues, the moral independence, the simplicity of manners, the stern uprightness, the self-reverence, the respect for man as mau, which are the ornaments and safeguards of a republic, should wither and give place to selfish calculation and indulgence, to show and extravagance, to anxious, envious, discontented strivings, to wild adventure, and to the gambling spirit of speculation, will surprise no one who has studied human nature. The invasion of Texas by our citizens is a mournful comment on our national morality. Whether without some fiery trial, some signal prostration of our prosperity, we can rise to the force and self-denial of freemen, is a question not easily solved. "There are other alarming views. A spirit of lawlessness pervades the community, which, if not repressed, threatens the dissolution of our present forms of society. Even in the old States, mobs are taking the government into their hands, and a profligate newspaper finds little difficulty in stirring up multitudes to violence. When we look at the parts of the country nearest to Texas, we see the arm of the law paralysed by the passions of the individual—men taking under their own protection the rights which it is the very office of government to secure. The citizen, wearing arms as means of defence, carries with him perpetual proofs of the weakness of the authorities under which he lives. The substitution of self-constituted tribunals for the regular course of justice, and the infliction of immediate punishment in the moment of popular frenzy, are symptoms of a people half reclaimed from barbarism. I know not that any civilised country on earth has exhibited during the last year a spectacle so atrocious as the burning of a coloured man, by a slow fire, in the neighbourhood of St Louis! and this infernal sacrifice was offered not by a few fiends selected from the whole country, but by a crowd gathered from a single spot." -Dr CHANNING to Mr CLAY, August 18, 1837. XXXVII. 1839. upon the currency, the main-spring for good or for evil CHAP. of the national fortunes, produced effects second only to those of the Reform Bill in consequence and durability. It is time to resume the narrative of these all-important events. 34. imports The first was the excess of imports over exports in Great Britain, in consequence of the continued prosperity Excess of and fine harvests of the three preceding years. It has over exbeen already mentioned, that in consequence of the un- ports. commonly fine seasons from 1832 to 1835, the importation of grain had entirely disappeared, and the nation had become self-supporting. In addition to this, these years had been so prosperous from other causes already detailed, that a great balance of imports over exports had come to take place. This balance had come, in the year 1837, to be no less than £12,000,000; and it of course required to be paid wholly, or at least chiefly, in gold or silver. This state of things is the inevitable result of a prosperous course of years, and its inevitable consequence a great domestic consumption, acting upon a currency dependent upon the retention of gold. There *EXPORTS AND IMPORTS FROM 1837 TO 1842. -PORTER'S Progress of the Nation, 3d edit., p. 356. It is true, the imports here are calculated according to the official, and the exports according to the declared value. But that the official value of the imports was not materially different from the real, is proved by the fact that, from 1797 down to 1819, the official value of exports exceeded their real value. In 1819, for the first time, the scale turned the official value of exports in that year was £33,534,176, the real value £35,208,321. So great and decisive had since that time been the effect of the contraction of the currency in lowering the prices of manufactured goods, that in 1840 the official value of exports was £102,705,372, the real value only £51,406,430.-Ibid. |