control was to be regulated, not by the solvency of the banks, but by the state of the exchanges.

We shall find that General Jackson, when President, entertained very different views respecting the United States Bank.

P. 19.:

“In 1832, a law passed both Houses of Congress for a renewal of the charter of the Bank of the United States; but the President, General Jackson, refused to ratify it. This power is conferred upon the President."

P. 20.:

The President returned the bill to the Senate, with a very long message, stating his objections, which were principally of a political nature.

P. 21.:

"It will make the American people debtors to aliens in nearly the whole amount due to this Bank, and send across the Atlantic from two to five millions of specie every year to pay the Bank dividends."

Also, by conferring too great power on the directors, it might endanger the institutions of the country. P. 22.:

"It is easy to conceive that great evils to our country and its institutions might flow from such a concentration of power in the hands of a few men irresponsible to the people."

Also that the Bank might procure for itself the power to purchase lands within the States a power granted to the Government only for particular purposes of general interest, and with the consent of the State where such lands are situated; that "the stockholders should be Americans only, if such a bank were established; that the capital of the bank was unnecessarily large."

P. 22.:

"The old Bank of the United States possessed a capital of only eleven millions of dollars, which was found fully sufficient to enable it, with despatch and safety, to perform all the functions required of it by the Government. The capital of the present

Bank is thirty-five millions of dollars, at least twenty-four more than experience has proved to be necessary to enable a bank to perform its public functions. The public debt which existed during the period of the old Bank, and on the establishment of the new, has been nearly paid off, and our revenue will soon be reduced. This increase of capital is, therefore, not for public, but for private purposes."

In 1833, General Jackson removed the government deposits from the Bank of the United States.

P. 24.:

"A great part of the session of 1834 was occupied in debates connected with the removal of the public deposits from the Bank of the United States, and upon the embarrassments produced by the consequent pressure upon the money market. The senate took the side of the Bank, and March 26th passed two resolutions : 1. "That the reasons assigned by the Secretary of the Treasury for the removal of the money of the United States, deposited in the Bank of the United States and its branches, communicated to Congress on the 4th of December 1833, are unsatisfactory and insufficient." 2. "That the President in the late executive proceedings in relation to the public revenue has assumed upon himself authority and powers not conferred by the constitution and laws, but in derogation of both." The house of representatives took the side of the President, and on April 4th passed the following resolutions: 1. "That the Bank of the United States ought not to be re-chartered." 2. "That the public deposits ought not to be restored to the Bank of the United States."

P. 28. :

In his address to Congress, delivered December 1st, 1834, General Jackson referred to the Bank of the United States in the following terms:

"Circumstances make it my duty to call the attention of Congress to the Bank of the United States. Created for the convenience of the Government, that institution has become the scourge of the people. Its interference to postpone the payment of a portion of the national debt, that it might retain the public money appropriated for that purpose to strengthen it in a political contest-the extraordinary extension and contraction of its accommodations to the community — its corrupt and partisan loans, &c.

"It is a subject of congratulation, that Congress and the country had the virtue and firmness to bear the infliction; that the energies of our people soon found relief from this wanton tyranny in vast importations of the precious metals from almost every part of the world; and that at the close of this tremendous effort to

control our Government, the Bank found itself powerless, and no longer able to loan out its surplus means. The community had learned to manage its affairs without its assistance, and trade had already found new auxiliaries, so that on the 1st October last the extraordinary spectacle was presented of a national bank, more than one-half of whose capital was either lying unproductive in its vaults or in the hands of foreign bankers.

"It seems due to the safety of the public funds remaining in that Bank, and to the honour of the American people, that measures be taken to separate the Government entirely from an institution so mischievous to the public prosperity, and so regardless to the constitution and laws.

"Events have satisfied my mind, and I think the minds of the American people, that the mischiefs and dangers which flow from a national bank far over balance all its advantages. The bold effort the present Bank has made to control the Government, the distresses it has wantonly produced, the violence of which it has been the occasion in one of our cities famed for its observance of law and order, are but premonitions of the fate which awaits the American people, should they be deluded into a perpetuation of this institution, or the establishment of another like it.

Happily, it is already illustrated that the agency of such an institution is not necessary to the fiscal operations of the Government. The State Banks are found fully adequate to the performance of all services which were required of the Bank of the United States, quite as promptly, and with the same cheapness. They have maintained themselves, and discharged all these duties, while the Bank of the United States was still powerful, and in the field as an open enemy: it is not possible to conceive that they will find greater difficulties in their operations when that enemy shall cease to exist.

"If the several States shall be induced gradually to reform their banking systems, and prohibit the issue of all small notes, we shall in a few years have a currency as sound, and as little liable to fluctuations, as any other commercial country."

P. 34., 1836, Mr. Gilbert observes:

"The charter of the Bank of the United States expired in this year. A new charter was, however, obtained from the State of Pennsylvania, authorizing the Bank to carry on business in that State. The Bank also obtained permission to continue their agencies in some of the other States. Though it retains the title of Bank of the United States,' yet it is not chartered by Congress, it is no longer the Bank of the Government; it has no longer the power to establish branches in the various States without their consent, and it must be subject to such laws or taxes as the respective States may impose."

This bank failed, after a fearful struggle, under the presidency of Mr. Biddle.

P. 36.:

In his farewell address to Congress, delivered December 6th, 1836, the President thus adverts to the Bank of the United States:

The President severely animadverts upon the conduct of the Bank of the United States and "the dangerous power" it wielded, which induced him "to prevent the continuance of that institution."

He observes:

"Experience continues to realise the expectations entertained as to the capacity of the States' Banks to perform the duties of fiscal agents of the Government.-Independent of these services, which are far greater than those rendered by the United States Bank, and its twenty-five branches, a number of the deposit Banks have, with a commendable zeal to aid in the improvement of the currency, imported from abroad, at their own expense, large sums of the precious metals for coinage and circulation."

a

Gilbart, p. 200. The following is an extract from "communication from a correspondent of the

Times."

"Immediately on the removal of the public deposits from the late Bank of the United States, speculations in its stock on a fall to a large amount ensued. Here the mania commenced. New local banks were thereupon chartered by the several States, and their stocks became the object of speculation. Paper money being abundant in the hands of a favoured few, these gentlemen turned their attention to the national domain. The disease had now become contagious, and consequently almost universal. Every description of property, foreign or domestic, personal or landed, was greatly enhanced in price; but more especially lands. In the height of this mania, the President directed the Secretary of the Treasury, under the date of the 11th of July, 1836, to instruct the receivers of public money in the western and southwestern States, to take nothing in payment of the public lands but gold or silver, or the notes of banks in their vicinity, that would be redeemed forthwith in specie.

"The effect of this order was twofold. It compelled the western and south-western banks to contract their loans, and thus gradually withdraw from circulation a portion of their paper, lest they should subject themselves to a run. At the same time it compelled both the speculator and the actual settler, who wished to purchase the public land, to provide himself in

the Atlantic States with specie, and transport it to the place where his payment was to be made.

"By these anticommercial regulations, the gold and silver was withdrawn from the marts of commerce, where it ought to have been left, as the means of regulating and balancing the accounts between the United States and foreign countries; and it was thrown into a district of territory where it remains unemployed in the vaults of certain banks, in the form of deposits, to the credit of the government. This is an unnatural state of things, and has tended incalculably to embarrass the merchants on the seaboard."

President Polk, in his Message to Congress, Dec. 5th, 1848,† dwells at some length upon the subject of a National Bank, which he himself disapproves of; he alludes to the opinion of President Washington, and highly commends the operation of the Constitutional Treasury established in 1846.

"Without reflecting upon the dissimilarity of our institutions, and of the condition of our people and those of Europe, they conceived the vain idea of building up in the United States a system similar to that which they admired abroad. Great Britain had a national bank of large capital in whose hands was concentrated the controlling monetary and financial power of the nation; an institution wielding almost kingly power, and exerting vast influence upon all the operations of trade, and upon the policy of the government itself. Great Britain had an enormous public debt, and it had become a part of her public policy to regard this as a 'public blessing.' Great Britain had also a restrictive policy, which placed fetters and burdens on trade, and trammelled the productive industry of the mass of the nation. By her combined system of policy, the landlords and other property holders were protected and enriched by the enormous taxes which were levied upon the labour of the country for their advantage.

66

Imitating this foreign policy, the first step in establishing the new system in the United States was the creation of a national bank. Not foreseeing the dangerous power and countless evils which such an institution might entail on the country, nor perceiving the connexion which it was designed to form between the Bank and the other branches of the miscalled 'American system,' but feeling the embarrassments of the Treasury and of the business of the country, consequent upon the war, some of our statesmen, who had held different and sounder views, were induced to yield their scruples, and, indeed, settled conviction of its unconstitutionality, and to give it their sanction as an expedient which

* A Genevese Traveller.

† Evening Mail, Dec. 20. 1848.