1. Mexico and South America,$6,458,000,0002. Europe and Northern Asia,628,000,0003. The coast of Africa,150,000,000
—making a total product of seven thousand two hundred and thirty-six millions, in the short space of three centuries and a half. To this is to be added the quantity existing at the time the New World was discovered, and which was computed at $2,300,000,000. Upon all these data, the political economists, Mr. B. said, after deducting $2,000,000,000 for waste and consumption, still computed the actual stock of gold and silver in Europe, Asia, and America, in 1832, at about seven thousand millions of dollars; and that quantity constantly and rapidly increasing.
Mr. B. had no doubt but that the quantity of gold and silver in Europe, Asia, and America, was sufficient to carry on the whole business of the world. He said that states and empires—far greater in wealth and population than any now existing—far superior in public and private magnificence—had carried on all the business of private life, and all the affairs of national government, upon gold and silver alone; and that before the mines of Mexico and Peru were known, or dreamed of. He alluded to the great nations of antiquity—to the Assyrian and Persian empires; to Egypt, Carthage, Rome; to the Grecian republics; the kingdoms of Asia Minor; and to the empire, transcending all these put together—the Saracenic empire of the Caliphs, which, taking for its centre the eastern limit of the Roman world, extended its dominion as far west as Rome had conquered, and further east than Alexander had marched. These great nations, whose armies crushed empires at a blow, whose monumental edifices still attest their grandeur, had no idea of bank credits and paper money. They used gold and silver alone. Such degenerate phrases as sound currency, paper medium, circulating media, never once sounded in their heroic ears. But why go back, exclaimed Mr. B., to the nations of antiquity? Why quit our own day? Why look beyond the boundaries of Europe? We have seen an empire in our own day, of almost fabulous grandeur and magnificence, carrying on all its vast undertakings upon a currency of gold and silver, without deigning to recognize paper for money. I speak, said Mr. B., of France—great and imperial France—and have my eye upon that first year of the consulate,when a young and victorious general, just transferred from the camp to a council, announced to his astonished ministers that specie payments should commence in France by a given day!—in that France which, for so many years, had seen nothing but a miserable currency of depreciated mandats and assignats! The annunciation was heard with the inward contempt, and open distrust, which the whole tribe of hack politicians every where feel for the statesmanship of military men. It was followed by the success which it belongs to genius to inspire and to command. Specie payments commenced in France on the day named; and a hard money currency has been the sole currency of France from that day to this.
Such, said Mr. B., is the currency of France; a country whose taxes exceed a thousand millions of francs—whose public and private expenditures require a circulation of three hundred and fifty millions of dollars—and which possesses that circulation, every dollar of it, in gold and silver. After this example, can any one doubt the capacity of the United States to supply itself with specie? Reason and history forbid the doubt. Reason informs us that hard money flows into the vacuum the instant that small bank notes are driven out. France recovered a specie circulation within a year after the consular government refused to recognize paper for money. England recovered a gold circulation of about one hundred millions of dollars within four years after the one and two pound notes were suppressed. Our own country filled up with Spanish milled dollars, French crowns, doubloons, half joes, and guineas, as by magic, at the conclusion of the Revolutionary War, and the suppression of the continental bills. The business of the United States would not require above sixty or seventy millions of gold and silver for the common currency of the people, and the basis of large bank notes and bills of exchange. Of that sum, more than one third is now in the country, but not in circulation. The Bank of the United States hoards above ten millions. At the expiration of her charter, in 1836, that sum will be paid out in redemption of its notes—will go into the hands of the people—and, of itself, will nearly double the quantity of silver now in circulation. Our native mines will be yielding, annually, some millions of gold; foreign commerce will be pouring in her accustomed copious supply; the correction of the erroneous value of gold, the liberal admission of foreign coins, and the suppression of small notes, will invite and retain an adequate metallic currency. The present moment is peculiarly favorable for these measures. Foreign exchanges are now in our favor; silver is coming here, although not current by our laws; both gold and silver would flow in, and that immediately, to an immense amount, if raised to their proper value, and put on a proper footing, by our laws. Three days' legislation on these subjects would turn copious supplies of gold and silver into the country, diffuse them through every neighborhood, and astonish gentlemen when they get home at midsummer, at finding hard money where they had left paper.
3. In the third place, Mr. B. undertook to affirm, as a proposition free from dispute or contestation, that the value now set upon gold, by the laws of the United States, was unjust and erroneous; that these laws had expelled gold from circulation; and that it was the bounden duty of Congress to restore that coin to circulation, by restoring it to its just value.
That gold was undervalued by the laws of the United States, and expelled from circulation, was a fact, Mr. B. said, which every body knew; but there was something else which every body did not know; which few, in reality, had an opportunity of knowing, but which was necessary to be known, to enable the friends of gold to go to work at the right place to effect the recovery of that precious metal which their fathers once possessed—which the subjects of European kings now possess—which the citizens of the young republics to the South all possess—which even the free negroes of San Domingo possess—but which the yeomanry of this America have been deprived of for more than twenty years, and will be deprived of for ever, unless they discover the cause of the evil, and apply the remedy to its root.
I have already shown, said Mr. B., that the plan for the support of public credit which General Hamilton brought forward, in 1791, was a plan for the establishment of the paper system in our America. We had at that time a gold currency which was circulating freely and fully all over the country. Gold is the antagonist of paper, and, with fair play, will keep a paper currency within just and proper limits. It willkeep down the small notes; for, no man will carry a five, a ten, or a twenty dollar note in his pocket, when he can get guineas, eagles, half eagles, doubloons, and half joes to carry in their place. The notes of the new Bank of the United States, which bank formed the leading feature in the plan for the support of public credit, had already derived one undue advantage over gold, in being put on a level with it in point of legal tender to the federal government, and universal receivability in all payments to that government: they were now to derive another, and a still greater undue advantage over gold, in the law for the establishment of the national mint; an institution which also formed a feature of the plan for the support of public credit. It is to that plan that we trace the origin of the erroneous valuation of gold, which has banished that metal from the country. Mr. Secretary Hamilton, in his proposition for the establishment of a mint, recommended that the relative value of gold to silver should be fixed at fifteen for one; and that recommendation became the law of the land; and has remained so ever since. At the same time, the relative value of these metals in Spain and Portugal, and throughout their vast dominions in the new world, whence our principal supplies of gold were derived, was at the rate of sixteen for one; thus making our standard six per cent. below the standard of the countries which chiefly produced gold. It was also below the English standard, and the French standard, and below the standard which prevailed in these States, before the adoption of the constitution, and which was actually prevailing in the States, at the time that this new proportion of fifteen to one was established.
Mr. B. was ready to admit that there was some nicety requisite in adjusting the relative value of two different kinds of money—gold and silver for example—so as to preserve an exact equipoise between them, and to prevent either from expelling the other. There was some nicety, but no insuperable or even extraordinary difficulty, in making the adjustment. The nicety of the question was aggravated in the year '92, by the difficulty of obtaining exact knowledge of the relative value of these metals, at that time, in France and England; and Mr. Gallatin has since shown that the information which was then relied upon was clearly erroneous. The consequence of any mistake in fixing our standard, was also well known in the year '92. Mr. Secretary Hamilton, in his proposition for the establishment of a mint, expressly declared that the consequence of a mistake in the relative value of the two metals, would be the expulsion of the one that was undervalued. Mr. Jefferson, then Secretary of State, in his cotemporaneous report upon foreign coins, declared the same thing. Mr. Robert Morris, financier to the revolutionary government, in his proposal to establish a mint, in 1782, was equally explicit to the same effect. The delicacy of the question and the consequence of a mistake, were then fully understood forty years ago, when the relative value of gold and silver was fixed at fifteen to one. But, at that time, it unfortunately happened that the paper system, then omnipotent in England, was making its transit to our America; and every thing that would go to establish that system—every thing that would go to sustain the new-born Bank of the United States—that eldest daughter andspem gregisof the paper system in America—fell in with the prevailing current, and became incorporated in the federal legislation of the day. Gold, it was well known, was the antagonist of paper; from its intrinsic value, the natural predilection of all mankind for it, its small bulk, and the facility of carrying it about, it would be preferred to paper, either for travelling or keeping in the house; and thus would limit and circumscribe the general circulation of bank notes, and prevent all plea of necessity for issuing smaller notes. Silver, on the contrary, from its inconvenience of transportation, would favor the circulation of bank notes. Hence the birth of the doctrine, that if a mistake was to be committed, it should be on the side of silver! Mr. Secretary Hamilton declares the existence of this feeling when, in his report upon the establishment of a mint, he says: "It is sometimes observed, that silver ought to be encouraged, rather than gold, as being more conducive to the extension of bank circulation, from the greater difficulty and inconvenience which its greater bulk, compared with its value, occasions in the transportation of it." This passage in the Secretary's report, proves the existence of the feeling in favor of silver against gold, and the cause of that feeling. Quotations might be made from the speeches of others to show that they acted upon that feeling; but it is due to General Hamiltonto say that he disclaimed such a motive for himself, and expressed a desire to retain both metals in circulation, and even to have a gold dollar.
The proportion of fifteen to one was established. The 11th section of the act of April, 1792, enacted that every fifteen pounds weight of pure silver, should be equal in value, in all payments, with one pound of pure gold; and so in proportion for less quantities of the respective metals. This act was the death warrant to the gold currency. The diminished circulation of that coin soon began to be observable; but it was not immediately extinguished. Several circumstances delayed, but could not prevent that catastrophe. 1. The Bank of the United States then issued no note of less denomination than ten dollars, and but few of them. 2. There were but three other banks in the United States, and they issued but few small notes; so that a small note currency did not come directly into conflict with gold. 3. The trade to the lower Mississippi continued to bring up from Natchez and New Orleans, for many years, a large supply of doubloons; and long supplied a gold currency to the new States in the West. Thus, the absence of a small note currency, and the constant arrivals of doubloons from the lower Mississippi, deferred the fate of the gold currency; and it was not until the lapse of near twenty years after the adoption of the erroneous standard of 1792, that the circulation of that metal, both foreign and domestic, became completely and totally extinguished in the United States. The extinction is now complete, and must remain so until the laws are altered.
In making this annunciation, and in thus standing forward to expose the error, and to demand the reform of the gold currency, he (Mr. B.) was not setting up for the honors of a first discoverer, or first inventor. Far from it. He was treading in the steps of other, and abler men, who had gone before him. Four Secretaries of the Treasury, Gallatin, Dallas, Crawford, Ingham, had, each in their day, pointed out the error in the gold standard, and recommended its correction. Repeated reports of committees, in both Houses of Congress, had done the same thing. Of these reports he would name those of the late Mr. Lowndes of South Carolina; of Mr. Sanford, late a senator from New-York; of Mr. Campbell P. White, now a representative from the city of New-York. Mr. B. took pleasure in recalling and presenting to public notice, the names of the eminent men who had gone before him in the exploration of this path. It was due to them, now that the good cause seemed to be in the road to success, to yield to them all the honors of first explorers; it was due to the cause also, in this hour of final trial, to give it the high sanction of their names and labors.
Mr. B. would arrest for an instant the current of his remarks, to fix the attention of the Senate upon a reflection which must suggest itself to the minds of all considerate persons. He would ask how it could happen that so many men, and such men as he had named, laboring for so many years, in a cause so just, for an object so beneficial, upon a state of facts so undeniable, could so long and so uniformly fail of success? How could this happen? Sir, exclaimed Mr. B., it happened because the policy of the Bank of the United States required it to happen! The same policy which required gold to be undervalued in 1792, when the first bank was chartered, has required it to be undervalued ever since, now that a second bank has been established; and the same strength which enabled these banks to keep themselves up, also enabled them to keep gold down. This is the answer to the question; and this the secret of the failure of all these eminent men in their laudable efforts to raise gold again to the dignity of money. This is the secret of their failure; and this secret being now known, the road which leads to the reformation of the gold currency lies uncovered and revealed before us: it is the road which leads to the overthrow of the Bank of the United States—to the sepulchre of that institution: for, while that bank lives, or has the hope of life, gold cannot be restored to life. Here then lies the question of the reform of the gold currency. If the bank is defeated, that currency is reformed; if the bank is victorious, gold remains degraded; to continue an article of merchandise in the hands of the bank, and to be expelled from circulation to make room for its five, its ten, and its twenty dollar notes. Let the people then, who are in favor of restoring gold to circulation, go to work in the right place, and put down the power that first put down gold, and which will never suffer that coin to rise while it has power to prevent it.
Mr. B. did not think it necessary to descantand expatiate upon the merits and advantages of a gold currency. These advantages had been too well known, from the earliest ages of the world, to be a subject of discussion in the nineteenth century; but, as it was the policy of the paper system to disparage that metal, and as that system, in its forty years' reign over the American people, had nearly destroyed a knowledge of that currency, he would briefly enumerate its leading and prominent advantages. 1. It had an intrinsic value, which gave it currency all over the world, to the full amount of that value, without regard to laws or circumstances. 2. It had a uniformity of value, which made it the safest standard of the value of property which the wisdom of man had ever yet discovered. 3. Its portability; which made it easy for the traveller to carry it about with him. 4. Its indestructibility; which made it the safest money that people could keep in their houses. 5. Its inherent purity; which made it the hardest money to be counterfeited, and the easiest to be detected, and, therefore, the safest money for the people to handle. 6. Its superiority over all other money; which gave to its possessor the choice and command of all other money. 7. Its power over exchanges; gold being the currency which contributes most to the equalization of exchange, and keeping down the rate of exchange to the lowest and most uniform point. 8. Its power over the paper money; gold being the natural enemy of that system, and, with fair play, able to hold it in check. 9. It is a constitutional currency and the people have a right to demand it, for their currency, as long as the present constitution is permitted to exist.
Mr. B. said, that the false valuation put upon gold had rendered the mint of the United States, so far as the gold coinage is concerned, a most ridiculous and absurd institution. It has coined, and that at a large expense to the United States, 2,262,717 pieces of gold, worth $11,852,890; and where are these pieces now? Not one of them to be seen! all sold, and exported! and so regular is this operation that the director of the mint, in his latest report to Congress, says that the new coined gold frequently remains in the mint, uncalled for, though ready for delivery, until the day arrives for a packet to sail to Europe. He calculates that two millions of native gold will be coined annually hereafter; the whole of which, without a reform of the gold standard, will be conducted, like exiles, from the national mint to the sea-shore, and transported to foreign regions, to be sold for the benefit of the Bank of the United States.
Mr. B. said this was not the time to discuss the relative value of gold and silver, nor to urge the particular proportion which ought to be established between them. That would be the proper work of a committee. At present it might be sufficient, and not irrelevant, to say that this question was one of commerce—that it was purely and simply a mercantile problem—as much so as an acquisition of any ordinary merchandise from foreign countries could be. Gold goes where it finds its value, and that value is what the laws of great nations give it. In Mexico and South America—the countries which produce gold, and from which the United States must derive their chief supply—the value of gold is 16 to 1 over silver; in the island of Cuba it is 17 to 1; in Spain and Portugal it is 16 to 1; in the West Indies, generally, it is the same. It is not to be supposed that gold will come from these countries to the United States, if the importer is to lose one dollar in every sixteen that he brings; or that our own gold will remain with us, when an exporter can gain a dollar upon every fifteen that he carries out. Such results would be contrary to the laws of trade; and therefore we must place the same value upon gold that other nations do, if we wish to gain any part of theirs, or to regain any part of our own. Mr. B. said that the case of England and France was no exception to this rule. They rated gold at something less than 16 for 1, and still retained gold in circulation; but it was retained by force of peculiar laws and advantages which do not prevail in the United States. In England the circulation of gold was aided and protected by four subsidiary laws, neither of which exist here: one which prevented silver from being a tender for more than forty shillings; another which required the Bank of England to pay all its notes in gold; a third which suppressed the small note circulation; a fourth which alloyed their silver nine per cent. below the relative value of gold. In France the relative proportion of the two metals was also below what it was in Spain, Portugal, Mexico, and South America, and still a plentiful supply of gold remained in circulation; but this resultwas aided by two peculiar causes; first, the total absence of a paper currency; secondly, the proximity of Spain, and the inferiority of Spanish manufactures, which gave to France a ready and a near market for the sale of her fine fabrics, which were paid for in the gold of the New World. In the United States, gold would have none of these subsidiary helps; on the contrary it would have to contend with a paper currency, and would have to be obtained, the product of our own mines excepted, from Mexico and South America, where it is rated as sixteen to one for silver. All these circumstances, and many others, would have to be taken into consideration in fixing a standard for the United States. Mr. B. repeated that there was nicety, but no difficulty, in adjusting the relative value of gold and silver so as to retain both in circulation. Several nations of antiquity had done it; some modern nations also. The English have both in circulation at this time. The French have both, and have had for thirty years. The States of this Union also had both in the time of the confederation; and retained them until this federal government was established, and the paper system adopted. Congress should not admit that it cannot do for the citizens of the United States, what so many monarchies have done for their subjects. Gentlemen, especially, who decry military chieftains, should not confess that they themselves cannot do for America, what a military chieftain did for France.
Mr. B. made his acknowledgments to the great apostle of American liberty (Mr. Jefferson), for the wise, practical idea, that the value of gold was a commercial question, to be settled by its value in other countries. He had seen that remark in the works of that great man, and treasured it up as teaching the plain and ready way to accomplish an apparently difficult object; and he fully concurred with the senator from South Carolina [Mr. Calhoun], that gold, in the United States, ought to be the preferred metal; not that silver should be expelled, but both retained; the mistake, of any, to be in favor of gold, instead of being against it.
IV. Mr. B. believed that it was the intention and declared meaning of the constitution, that foreign coins should pass currently as money, and at their full value, within the United States; that it was the duty of Congress to promote the circulation of these coins by giving them their full value; that this was the design of the States in conferring upon Congress the exclusive power of regulating the value of these coins; that all the laws of Congress for preventing the circulation of foreign coins, and underrating their value, were so many breaches of the constitution, and so many mischiefs inflicted upon the States; and that it was the bounden duty of Congress to repeal all such laws; and to restore foreign coins to the same free and favored circulation which they possessed when the federal constitution was adopted.
In support of the first branch of his first position Mr. B. quoted the words of the constitution which authorized Congress to regulate the value of foreign coins; secondly, the clause in the constitution which authorized Congress to provide for punishing the counterfeiting of current coin, in which term, foreign coin was included; thirdly, the clause which prohibited the States from making any thing but gold and silver coin a tender in payment of debts; a clause which did not limit the prohibition to domestic coins, and therefore included foreign ones. These three clauses, he said, were concurrent, and put foreign coin and domestic coin upon the same precise footing of equality, in every particular which concerned their current circulation, their value, and their protection from counterfeiters. Historical recollections were the next evidence to which Mr. B. referred to sustain his position. He said that foreign coins were the only coins known to the United States at the adoption of the constitution. No mint had been established up to that time. The coins of other nations furnished the currency, the exclusive metallic currency, which the States had used from the close of the Revolutionary War up to the formation of this federal government. It was these foreign coins then which the framers of the constitution had in view when they inserted all the clauses in the constitution which bear upon the value and current circulation of coin; its protection from counterfeiters, and the prohibitory restriction upon the States with respect to the illegality of tenders of any thing except of gold and silver. To make this point still plainer, if plainer it could be made, Mr. B. adverted to the early statutes of Congress which related to foreign coins. He had seen no less than nine statutes, passed in the first four years of the action of this federal government, all enactedfor the purpose of regulating the value, protecting the purity, and promoting the circulation of these coins. Not only the well-known coins of the principal nations were provided for in these statutes, but the coins of all the nations with whom we traded, how rare or small might be the coin, or how remote or inconsiderable might be the nation. By a general provision of the act of 1789, the gold coins of all nations, which equalled those of England, France, Spain and Portugal, in fineness, were to be current at 89 cents the pennyweight; and the silver coins of all nations, which equalled the Spanish dollar in fineness, were to be current at 111 cents the ounce. Under these general provisions, a great influx of the precious metals took place; doubloons, guineas, half joes, were the common and familiar currency of farmers and laborers, as well as of merchants and traders. Every substantial citizen then kept in his house a pair of small scales to weigh gold, which are now used by his posterity to weigh physic. It is a great many years—a whole generation has grown up—since these scales were used for their original purpose; nor will they ever be needed again for that use until the just and wise laws of '89 and '90, for the general circulation of foreign coins, shall again be put in force. These early statutes, added to historical recollections, could leave no doubt of the true meaning of the constitution, and that foreign coins were intended to be for ever current within the United States.
With this obvious meaning of the constitution, and the undeniable advantage which redounded to the United States from the acquisition of the precious metals from all foreign nations, the inquiry naturally presents itself, to know for what reason these coins have been outlawed by the Congress of the United States, and driven from circulation? The inquiring mind wishes to know how Congress could be brought, in a few short years after the adoption of the constitution, to contradict that instrument in a vital particular—to repeal the nine statutes which they had passed in favor of foreign coin—and to illegalize the circulation of that coin whose value they were to regulate, and whose purity to protect?
Sir, said Mr. B., I am unwilling to appear always in the same train, tracing up all the evils of our currency to the same fountain of mischiefs—the introduction of the paper system, and the first establishment of a federal bank among us. But justice must have its sway; historical truth must take its course; facts must be told; and authentic proof shall supply the place of narrative and assertion. We ascend, then, to the year '91—to the exhibition of the plan for the support of public credit—and see in that plan, as one of its features, a proposition for the establishment of a national mint; and in that establishment a subsidiary engine for the support of the federal bank. We have already seen that in the proposition for the establishment of the mint, gold was largely undervalued; and that this undervaluation has driven gold from the country and left a vacuum for the circulation of federal bank notes; we are now to see that the same mint establishment was to give further aid to the circulation of these notes, by excluding foreign coins, both gold and silver, from circulation, and thus enlarging the vacuum which was to be filled by bank paper. This is what we are now to see; and to see it, we will look at the plan for the support of public credit, and that feature of the plan which proposes the establishment of a national mint.
Mr. B. would remark, that four points were presented in this plan: 1. The eventual abolition of the currency of foreign coins; 2. The reduction of their value while allowed to circulate; 3. The substitution of domestic coins; and, 4. The substitution of bank notes in place of the uncurrent and undervalued foreign coins. Such were the recommendations of Secretary Hamilton; and legislative enactments quickly followed to convert his recommendations into law. The only power the constitution had given to Congress over foreign coins, was a power to regulate their value, and to protect them from debasement by counterfeiters. It was certainly a most strange construction of that authority, first, to underrate the value of these coins, and next, to prohibit their circulation! Yet both things were done. The mint went into operation in 1794; foreign coins were to cease to be a legal tender in 1797; but, at the end of that time, the contingencies on which the Secretary calculated, to enable the country to do without foreign coins, had not occurred; the substitutes had not appeared; the mint had not supplied the adequate quantity of domestic coin,nor had the circulation of bank notes become sufficiently familiar to the people to supersede gold. The law for the exclusion of foreign coins was found to be impracticable; and a suspension of it for three years was enacted. At the end of this time the evil was found to be as great as ever; and a further suspension of three years was made. This third term of three years also rolled over, the supply of domestic coins was still found to be inadequate, and the people continued to be as averse as ever to the bank note substitute. A fourth suspension of the law became necessary, and in 1806 a further suspension for three years was made; after that a fifth, and finally a sixth suspension, each for the period of three years; which brought the period for the actual and final cessation of the circulation of foreign coins, to the month of November, 1819. From that time there was no further suspension of the prohibitory act. An exception was continued, and still remains, in favor of Spanish milled dollars and parts of dollars; but all other foreign coins, even those of Mexico and all the South American States, have ceased to be a legal tender, and have lost their character of current money within the United States. Their value is degraded to the mint price of bullion; and thus the constitutional currency becomes an article of merchandise and exportation. Even the Spanish milled dollar, though continued as a legal tender, is valued, not as money, but for the pure silver in it, and is therefore undervalued three or four per cent. and becomes an article of merchandise. The Bank of the United States has collected and sold 4,450,000 of them. Every money dealer is employed in buying, selling, and exporting them. The South and West, which receives them, is stripped of them.
Having gone through this narrative of facts, and shown the exclusion of foreign coins from circulation to be a part of the paper system, and intended to facilitate the substitution of a bank note currency, Mr B. went on to state the injuries resulting from the measure. At the head of these injuries he was bound to place the violation of the constitution of the United States, which clearly intended that foreign coins should circulate among us, and which, in giving Congress authority to regulate their value, and to protect them from counterfeiters, could never have intended to stop their circulation, and to abandon them to debasement. 2. He denounced this exclusion of foreign coins as a fraud, and a fraud of the most injurious nature, upon the people of the States. The States had surrendered their power over the coinage to Congress; they made the surrender in language which clearly implied that their currency of foreign coins was to be continued to them; yet that currency is suppressed; a currency of intrinsic value, for which they paid interest to nobody, is suppressed; and a currency without intrinsic value, a currency of paper subject to every fluctuation, and for the supply of which corporate bodies receive interest, is substituted in its place. 3. He objected to this suppression as depriving the whole Union, and especially the Western States, of their due and necessary supply of hard money. Since that law took effect, the United States had only been a thoroughfare for foreign coins to pass through. All that was brought into the country, had to go out of the country. It was exported as fast as imported. The custom-house books proved this fact. They proved, that from 1821 to 1833, the imports of specie were $89,428,462; the exports, for the same time, were $88,821,433; lacking but three quarters of a million of being precisely equal to the imports! Some of this coin was recoined before it was exported, a foolish and expensive operation on the part of the United States; but the greater part was exported in the same form that it was received. Mr. B. had only been able to get the exports and imports from 1821; if he could have obtained those of 1820, and the concluding part of 1819, when the prohibitory law took effect, the amount would have been about ninety-six millions of dollars; the whole of which was lost to the country by the prohibitory law, while much of it would have been saved, and retained for home circulation, if it had not been for this law. The loss of this great sum in specie was an injury to the whole Union, but especially to the Western States, whose sole resource for coin was from foreign countries; for the coinage of the mint could never flow into that region; there was nothing in the course of trade and exchanges, to carry money from the Atlantic States to the West, and the mint, if it coined thousands of millions, could not supply them. The taking effect of the law in the year 1819, was an aggravation of the injury. It was the most unfortunate and ruinous of all times for driving specie from thecountry. The Western banks, from their exertions to aid the country during the war, had stretched their issues to the utmost limit; their notes had gone into the land offices; the federal government turned them over to the Bank of the United States; and that bank demanded specie. Thus, the necessity for specie was increased at the very moment that the supply was diminished; and the general stoppage of the Western banks, was the inevitable and natural result of these combined circumstances.
Having shown the great evils resulting to the country from the operation of this law, Mr. B. called upon its friends to tell what reason could now be given for not repealing it? He affirmed that, of the two causes to which the law owed its origin, one had failedin toto, and the other had succeeded to a degree to make it the curse and the nuisance of the country. One reason was to induce an adequate supply of foreign coins to be brought to the mint, to be recoined; the other to facilitate the substitution of a bank note currency. The foreign coins did not go to the mint, those excepted which were imported in its own neighborhood; and even these were exported nearly as fast as recoined. The authority of the director of the mint had already been quoted to show that the new coined gold was transferred direct from the national mint to the packet ships, bound to Europe. The custom-house returns showed the large exportation of domestic coins. They would be found under the head of "Domestic Manufactures Exported;" and made a large figure in the list of these exports. In the year 1832, it amounted to $2,058,474, and in the year 1833, to $1,410,941; and every year it was more or less; so that the national mint had degenerated into a domestic manufactory of gold and silver, for exportation to foreign countries. But the coins imported at New Orleans, at Charleston, and at other points remote from Philadelphia, did not go there to be recoined. They were, in part, exported direct from the place of import, and in part used by the people as current money, in disregard of the prohibitory law of 1819. But the greater part was exported—for no owner of foreign coin could incur the trouble, risk, and expense, of sending it some hundred or a thousand miles to Philadelphia, to have it recoined; and then incurring the same expense, risk, and trouble (lying out of the use of the money, and receiving no interest all the while), of bringing it back to be put into circulation; with the further risk of a deduction for want of standard fineness at the mint, when he could sell and export it upon the spot. Foreign coins could not be recoined, so as to supply the Union, by a solitary mint on the Atlantic coast. The great West could only be supplied from New Orleans. A branch of the mint, placed there, could supply the West with domestic coins. Mexico, since she became a free country, has established seven mints in different places, because it was troublesome and expensive to carry bullion from all parts of the country to be coined in the capital; and when coined there, there was nothing in the course of trade to carry them back into the country; and the owners of it would not be at the expense and trouble of carrying it back, and getting it into circulation, being the exact state of things at present in the gold mines of the Southern States. The United States, upon the same principles and for the same reasons, should establish branches of the mint in the South, convenient to the gold mine region, and at New Orleans, for the benefit of that city and the West. Without a branch of the mint at New Orleans, the admission of foreign coins is indispensable to the West; and thus the interest of that region joins itself to the voice of the constitution in demanding the immediate repeal of all laws for illegalizing the circulation of these coins, and for sinking them from their current value as money, to their mint value as bullion. The design of supplying the mint with foreign coins, for recoinage, had then failed; and in that respect the exclusion of foreign coins has failed in one of its objects—in the other, that of making room for a substitute of bank notes, the success of the scheme has been complete, excessive, and deplorable.
Foreign coins were again made a legal tender, their value regulated and their importation encouraged, at the expiration of the charter of the first Bank of the United States. This continued to be the case until after the present Bank of the United States was chartered; as soon as that event happened, and bank policy again became predominant in the halls of Congress, the circulation of foreign coins was again struck at and, in the second year of the existence of thebank, the old act of 1793, for rendering these coins uncurrent, was carried into final and complete effect. Since that time, the bank has enjoyed all her advantages from this exclusion. The expulsion of these coins has created a vacuum, to be filled up by her small note circulation; the traffic and trade in them has been as large a source of profit to her as of loss to the country. Gold coin she has sold at an advance of five or six per cent.; silver coin at about two or three per cent.; and, her hand being in, she made no difference between selling domestic coin and foreign coin. Although forbid by her charter to deal in coin, she has employed her branches to gather $40,040,000 of coin from the States; a large part of which she admits that she has sold and transported to Europe. For the sale of the foreign coin, she sets up the lawyer-like plea, that it is not coin, but bullion! resting the validity of the plea upon English statute law! while, by the constitution of the United States, all foreign coins are coin; while, by her own charter, the coins, both gold and silver, of Great Britain, France, Spain, and Portugal, and their dominions, are declared to be coin; and, as such, made receivable in payment of the specie proportion of the bank stock—and, worse yet! while Spanish dollars, by statute, remain the current coin of the United States, the bank admits the sale of 4,450,142 of these identical Spanish milled dollars!
Mr. B. then took a rapid view of the present condition of the statute currency of the United States—of that currency which was a legal tender—that currency with which a debtor had a right by law to protect his property from execution, and his body from jail, by offering it as a matter of right, to his creditor in payment of his debt. He stated this statute currency to be: 1st. Coins from the mint of the United States; 2dly. Spanish milled dollars, and the parts of such dollars. This was the sum total of the statute currency of the United States; for happily no paper of any bank, State or federal, could be made a legal tender. This is the sum total out of which any man in debt can legally pay his debt: and what is his chance for making payment out of this brief list? Let us see. Coinage from the mint: not a particle of gold, nor a single whole dollar to be found; very few half dollars, except in the neighborhood of the mint, and in the hands of the Bank of the United States and its branches; the twenty, ten, and five cent pieces scarcely seen, except as a curiosity, in the interior parts of the country. So much for the domestic coinage. Now for the Spanish milled dollars—how do they stand in the United States? Nearly as scarce as our own dollars; for, there has been none coined since Spain lost her dominion over her colonies in the New World; and the coinage of these colonies, now independent States, neither is in law, nor in fact, Spanish milled. That term belongs to the coinage of the Spanish crown, with a Spanish king's head upon the face of it; although the coin of the new States, the silver dollars of Mexico, Central America, Peru, and Chili, are superior to Spanish dollars, in value, because they contain more pure silver, still they are not a tender; and all the francs from France, in a word, all foreign coin except Spanish milled dollars, the coinage of which has ceased, and the country stripped of all that were in it, by the Bank of the United States, are uncurrent, and illegal as tenders: so that the people of the United States are reduced to so small a list, and so small a supply of statute currency, out of which debts can legally be paid, that it may be fairly assumed that the whole debtor part of the community lie at the mercy of their creditors, to have their bodies sent to jail, or their property sold for nothing, at any time that their creditors please. To such a condition are the free and high-minded inhabitants of this country reduced! and reduced by the power and policy of the first and second Banks of the United States, and the controlling influence which they have exercised over the moneyed system of the Union, from the year 1791 down to the present day.
Mr. B. would conclude what he had to say, on this head, with one remark; it was this: that while the gold and silver coin of all the monarchs of Europe were excluded from circulation in the United States, the paper notes of their subjects were received as current money. The Bank of the United States was, in a great degree, a foreign institution. Foreigners held a great part of its stock, and may hold it all. The paper notes issued by this institution, thus composed in great part of the subjects of European kings, are made legal tenders to the federal government, and thus forced into circulation among the people; while the gold and silvercoin of the kings to which they belong, is rejected and excluded, and expelled from the country! He demanded if any thing could display the vice and deformity of the paper system in a more revolting and humiliating point of view than this single fact?
V. Mr. B. expressed his satisfaction at finding so many points of concurrence between his sentiments on currency, and those of the senator from South Carolina (Mr. Calhoun). Reform of the gold currency—recovery of specie—evils of excessive banking—and the eventual suppression of small notes—were all points in which they agreed, and on which he hoped they should be found acting together when these measures should be put to the test of legislative action. He regretted that he could not concur with that senator on the great points to which all the others might be found to be subordinate and accessorial. He alluded to the prolonged existence of the Bank of the United States! and especially to the practical views which that senator had taken of the beneficial operation of that institution, first, as the regulator of the local currencies, and next, as the supplier of a general currency to the Union. On both these points, he differed—immeasurably differed—from that senator; and dropping all other views of that bank, he came at once to the point which the senator from South Carolina marked out as the true and practical question of debate; and would discuss that question simply under its relation to the currency; he would view the bank simply as the regulator of local currencies and the supplier of a national currency, and would give his reasons for differing—irreconcilably differing—from the senator from South Carolina on these points.
Mr. B. took three distinct objections to the Bank of the United States, as a regulator of currency: 1, that this was a power which belonged to the government of the United States; 2, that it could not be delegated; 3, that it ought not be delegated to any bank.
1. The regulation of the currency of a nation, Mr. B. said, was one of the highest and most delicate acts of sovereign power. It was precisely equivalent to the power to create currency; for, a power to make more or less, was, in effect, a power to make much or none. It was the coining power; a power that belonged to the sovereign; and, where a paper currency was tolerated, the coining power was swallowed up and superseded by the manufactory which emitted paper. In the present state of the currency of the United States, the federal bank was the mint for issuing money; the federal mint was a manufactory for preparing gold and silver for exportation. The States, in the formation of the constitution, gave the coining power to Congress; with that power, they gave authority to regulate the currency of the Union, by regulating the value of gold and silver, and preventing any thing but metallic money from being made a tender in payment of debts. It is by the exercise of these powers that the federal government is to regulate the currency of the Union; and all the departments of the government are required to act their parts in effecting the regulation: the Congress, as the department that passes the law; the President, as the authority that recommends it, approves it, and sees that it is faithfully executed; the judiciary, as standing between the debtor and creditor, and preventing the execution from being discharged by any thing but gold and silver and that at the rate which the legislative department has fixed. This is the power, and sole power, of regulating currency which the federal constitution contains; this power is vested in the federal government, not in one department of it, but in the joint action of the three departments; and while this power is exercised by the government, the currency of the whole Union will be regulated, and the regulation effected according to the intention of the constitution, by keeping all the local banks up to the point of specie payment; and thereby making the value of their notes equivalent to specie.
2. This great and delicate power, thus involving the sacred relations of debtor and creditor, and the actual rise or fall in the value of every man's property, Mr. B. undertook to affirm, could not be delegated. It was a trust from the State governments to the federal government. The State governments divested themselves of this power, and invested the federal government with it, and made its exercise depend upon the three branches of the new government; and this new government could no more delegate it, than they could delegate any other great power which they were bound to execute themselves. Not a word of this regulatingpower, Mr. E. said, was heard of when the first bank was chartered, in the year 1791. No person whispered such a reason for the establishment of a bank at that time; the whole conception is newfangled—an afterthought—growing out of the very evils which the bank itself has brought upon the country, and which are to be cured by putting down that great bank; after which, the Congress and the judiciary will easily manage the small banks, by holding them up to specie payments, and excluding every unsolid note from revenue payments.
3. Mr. B. said that the government ought not to delegate this power, if it could. It was too great a power to be trusted to any banking company whatever, or to any authority but the highest and most responsible which was known to our form of government. The government itself ceased to be independent—it ceases to be safe—when the national currency is at the will of a company. The government can undertake no great enterprise, neither of war nor peace, without the consent and co-operation of that company; it cannot count its revenues for six months ahead without referring to the action of that company—its friendship or its enmity—its concurrence or opposition—to see how far that company will permit money to be plenty, or make it scarce; how far it will let the moneyed system go on regularly, or throw it into disorder; how far it will suit the interests, or policy, of that company to create a tempest, or to suffer a calm, in the moneyed ocean. The people are not safe when a company has such a power. The temptation is too great—the opportunity too easy—to put up and put down prices; to make and break fortunes; to bring the whole community upon its knees to the Neptunes who preside over the flux and reflux of paper. All property is at their mercy. The price of real estate—of every growing crop—of every staple article in market—is at their command. Stocks are their playthings—their gambling theatre—on which they gamble daily, with as little secrecy, and as little morality, and far more mischief to fortunes, than common gamblers carry on their operations. The philosophic Voltaire, a century ago, from his retreat in Ferney, gave a lively description of this operation, by which he was made a winner, without the trouble of playing. I have a friend, said he, who is a director in the Bank of France, who writes to me when they are going to make money plenty, and make stocks rise, and then I give orders to my broker to sell; and he writes to me when they are going to make money scarce, and make stocks fall, and then I write to my broker to buy; and thus, at a hundred leagues from Paris, and without moving from my chair, I make money. This, said Mr. B., is the operation on stocks to the present day; and it cannot be safe to the holders of stock that there should be a moneyed power great enough in this country to raise and depress the prices of their property at pleasure. The great cities of the Union are not safe, while a company, in any other city, have power over their moneyed system, and are able, by making money scarce or plenty—by exciting panics and alarms—to put up, or put down, the price of the staple articles in which they deal. Every commercial city, for its own safety, should have an independent moneyed system—should be free from the control and regulation of a distant, possibly a rival city, in the means of carrying on its own trade. Thus, the safety of the government, the safety of the people, the interest of all owners of property—of all growing crops—the holders of all stocks—the exporters of all staple articles—require that the regulation of the currency should be kept out of the hands of a great banking company; that it should remain where the constitution placed it—in the hands of the federal government—in the hands of their representatives who are elected by them, responsible to them, may be exchanged by them, who can pass no law for regulating currency which will not bear upon themselves as well as upon their constituents. This is what the safety of the community requires; and, for one, he (Mr. B.) would not, if he could, delegate the power of regulating the currency of this great country to any banking company whatsoever. It was a power too tremendous to be trusted to a company. The States thought it too great a power to be trusted to the State governments; he (Mr. B.) thought so too. The States confided it to the federal government; he, for one, would confine it to the federal government, and would make that government exercise it. Above all, he would not confer it upon a bank which was itself above regulation; and on this point he called upon the Senate to recollect the question, apparentlytrite, but replete with profound sagacity—that sagacity which it belongs to great men to possess, and to express—which was put to the Congress of 1816, when this bank charter was under discussion, and the regulation of the currency was one of the attributes with which it was to be invested; he alluded to his late esteemed friend (Mr. Randolph), and to his call upon the House to tell him who was to bell the cat? That single question contains in its answer, and in its allusion, the exact history of the people of the United States, and of the Bank of the United States, at this day. It was a flash of lightning into the dark vista of futurity, showing in 1816 what we all see in 1834.
Mr. B. took up the second point on which he disagreed with the Senator from South Carolina [Mr. Calhoun], namely, the capacity of the Bank of the United States to supply a general currency to the Union. In handling this question he would drop all other inquiries—lay aside every other objection—overlook every consideration of the constitutionality and expediency of the bank, and confine himself to the strict question of its ability to diffuse and retain in circulation a paper currency over this extended Union. He would come to the question as a banker would come to it at his table, or a merchant in his counting-room, looking to the mere operation of a money system. It was a question for wise men to think of, and for abler men than himself to discuss. It involved the theory and the science of banking—Mr. B. would say the philosophy of banking, if such a term could be applied to a moneyed system. It was a question to be studied as the philosopher studies the laws which govern the material world—as he would study the laws of gravitation and attraction which govern the movements of the planets, or draw the waters of the mountains to the level of the ocean. The moneyed system, said Mr. B., has its laws of attraction and gravitation—of repulsion and adhesion; and no man may be permitted to indulge the hope of establishing a moneyed system contrary to its own laws. The genius of man has not yet devised a bank—the historic page is yet to be written which tells of a bank—which has diffused over an extensive country, and retained in circulation, a general paper currency. England is too small a theatre for a complete example; but even there the impossibility is confessed, and has been confessed for a century. The Bank of England, in her greatest day of pre-eminence, could not furnish a general currency for England alone—a territory not larger than Virginia. The country banks furnished the local paper currency, and still furnish it as far as it is used. They carried on their banking upon Bank of England notes, until the gold currency was restored; and local paper formed the mass of local circulation. The notes of the Bank of England flowed to the great commercial capitals, and made but brief sojourn in the counties. But England is not a fair example for the United States; it is too small; a fairer example is to be found nearer home, in our own country, and in this very Bank of the United States which is now existing, and in favor of which the function of supplying a general currency to this extended confederacy is claimed. We have the experiment of this bank, not once, but twice made; and each experiment proves the truth of the laws which govern the system. The theory of bank circulation, over an extended territory, is this, that you may put out as many notes as you may in any one place, they will immediately fall into the track of commerce—into the current of trade—into the course of exchange—and follow that current wherever it leads. In these United States the current sets from every part of the interior, and especially from the South and West into the Northeast—into the four commercial cities north of the Potomac; Baltimore, Philadelphia, New-York, and Boston: and all the bank notes which will pass for money in those places, fall into the current which sets in that direction. When there, there is nothing in the course of trade to bring them back. There is no reflux in that current! It is a trade-wind which blows twelve months in the year in the same direction. This is the theory of bank circulation over extended territory; and the history of the present bank is an exemplification of the truth of that theory. Listen to Mr. Cheves. Read his report made to the stockholders at their triennial meeting in 1822. He stated this law of circulation, and explained the inevitable tendency of the branch bank notes to flow to the Northeast; the impossibility of preventing it; and the resolution which he had taken and executed, to close all the Southern and Western branches, and prevent them from issuing any more notes. Even while issuing their own notes, they had so far forgottheir charter as to carry on operations, in part, upon the notes of the local banks—having collected those notes in great quantity, and loaned them out. This was reported by the investigating committee of 1819, and made one of the charges of misconduct against the bank at that time. To counteract this tendency, the bank applied to Congress for leave to issue their bank notes on terms which would have made them a mere local currency. Congress refused it; but the bank is now attempting to do it herself, by refusing to take the notes received in payment of the federal revenue, and sending it back to be paid where issued. Such was the history of the branch bank notes, and which caused that currency to disappear from all the interior, and from the whole South and West, so soon after the bank got into operation. The attempt to keep out branch notes, or to send the notes of the mother bank to any distance, being found impracticable, there was no branch currency of any kind in circulation for a period of eight or nine years, until the year 1827, when the branch checks were invented, to perform the miracle which notes could not. Mr. B. would say nothing about the legality of that invention; he would now treat them as a legal issue under the charter; and in that most favorable point of view for them, he would show that these branch checks were nothing but a quack remedy—an empirical contrivance—which made things worse. By their nature they were as strongly attracted to the Northeast as the branch notes had been; by their terms they were still more strongly attracted, for they bore Philadelphia on their face! they were payable at the mother bank! and, of course, would naturally flow to that place for use or payment. This was their destiny, and most punctually did they fulfil it. Never did the trade-winds blow more truly—never did the gulf stream flow more regularly—than those checks flowed to the Northeast! The average of four years next ensuing the invention of these checks, which went to the mother bank, or to the Atlantic branches north of the Potomac, including the branch notes which flowed with them, was about nineteen millions of dollars per annum! Mr. B. then exhibited a table to prove what he alleged, and from which it appeared that the flow of the branch paper to the Northeast was as regular and uniform as an operation of nature; that each city according to its commercial importance, received a greater or less proportion of this inland paper gulf stream; and that the annual variation was so slight as only to prove the regularity of the laws by which it was governed. The following is the table which he exhibited. It was one of the tabular statements obtained by the investigating committee in 1832:
Amount of Branch Bank Paper received at—