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emhpatically affirins, that prices would rise by the diminution of currency. Now he complains--not that we have misquoted him-not that we have suppressed a syllable necessary to the understanding of his statement, for we actually gave the whole passage-not that we have made comments calculated to mislead the reader as to its true interpretation--but that the reviewer desires to have his readers believe that it is asserted that prices always rise in proportion to the scarcity of currency.” Ilaving fairly left our readers to guess for themselves, we must be permitted to say that we conceive ourselves to be treated with great harshness, in thus having our secret desires uncereinoniously dragged forth to the gaze of the world! This strange assault upon the signification of a fair and accurate quotation, from his own work, is perfectly in character with his other complaints of our quotations. There are some half a dozen, and in every instance an explanation quite as conclusive might be made, did our time and space permit us to follow up such small game. We particularly regret that we are unable to elucidate the details given by Mr. Carey, as to the condition of France, for the purpose of invalidating the force of our statements, which he has not undertaken to contradict. A counterpart of the explanation of the degraded condition of England might be easily made on that subject. The preposterous libel upon the honesty and integrity of the whole manufacturing and mercantile men in I'rance, is now charged by Ir. Carey upon M. Chevalier, who adduces in its support, according to the reply, “the captain of the French discoveryship Favorite.” What a remarkable discovery.ship!
The system of the New England Banks is again the subject of unmeasured approbation in the reply, but no allusion is made to the explanation of the process by which they were compelled to restrict their issues to their means of redemption, which was given at length in our former Article. To this process these banks have entirely owed, during the last fifteen years, their usefulness, and the confidence of the community. This important suppression was the foundation of a mass of false facts, and equally false inserences, in Mr. Carey's former publication, as we abundantly demonstrated from the authority of the reports made to the Legislature of Mas. sachusetts last winter. The repetition of these facts and inferences in Mr. Carey's formal reply, without the slightest regard to the conclusive resutation furnished in the Article to which the reply is directed, indicates a persevering determination at deception, which appears extraordinary in any individual, of whatever standing in society, who undertakes to give information to the public upon questions deeply affecting its highest interests.
As we have never been initiated into this marvellous distinction made between true and false facts, we take the earliest opportunity to correct an oversight which occurred in our former Article, and
which escaped notice until after the Number had been published. We had introduced, at the commencement of our remarks upon the failures of the banks of New England, on 226th page of the volume, a qualification, extending the period to which we referred in describing the extent and consequences of these failures, to the period of thirty years, instead of the twenty-five carefully adopted by Mr. Carey. The omission of the line containing this qualification affected the precise accuracy of our statement-since these five additional years were intended to include the tremendous crash which occurred among the banks in every section of New England in 1808, 1809, and 1810, as well as the explosions which happened in 1837 and 1838. The disasters of the former period resulting from the false confidence and the over-banking which had previously existed, brought a torrent of abuse upon the government at that time, quite equal to any thing to be found in either of Mr. Carey's publications. The banks in New England were almost wholly under the control of Federal politicians. The disturbed condition of our relations with the belligerent powers of Europe, and the measures adopted by our government for the protection of our neutrality, enabled these politicians, hy their control over the paper currency, and consequently over the subsistence and industry of the people, to excite great public discontent. So alarming were the distress and dissatisfaction which they succeeded in fomenting throughout New England, that John Quincy Adams, then a leader of the Federal party, and a member of the Senate of the United States from Massachusetts, thought proper to inform Pres!. dent Jefferson, that the Federal party had entered into a treasonable arrangement with the British Authorities in Canada, for the separation of the States, and the creation of a Northern confederacy. About the same time Judge Story succeeded in so effectually alarming the Democratic members of Congress, by his confident statements that civil war would inevitably break out in New England, unless the restrictive policy adopted by the government for the security of our commerce was rescinded, that this great and salutary measure was abandoned at the point of time when it has since become well known that the British government had felt themselves compelled, by the privations imposed upon her colonies, to accede to our just demands. Had the embargo been persevered in a few months longer, no individual acquainted with the real state of affairs at that period, can fail to believe but the subsequent recourse to war for the vindication of our national sovereignty, would have been wholly obviated. It was at this period of depression and distress that Mr. Webster published that famous pamphlet inciting the people of the Eastern States to resist the laws by violence, of which he was compelled to avow himself to be the anthor, when under cross-examination upon the trial of his prosecution against Gen. Lyman for a libel, because the latter had stated, in one of the Boston newspapers in 1828, that Mr. Webster had co-operated with the individuals stigmatized as traitors by Mr. Adams, in his extraordinary publication on the eve of the Presidential election of that year-and which prosecution so signally failed.
The most efficient agency in producing this deplorable state of public feeling throughout New England, was wielded by the banks They had been established in all quarters, in imitation of the credit system of Great Britain, and had by degress been enabled to engross the control of all the currency in circulation. Their managers as fully understood the principle of “combined action” as Mr. Carey, for the purpose of obtaining power, and at the same time increasing their individual profits, through the infliction of privations upon the industrious and producing classes, and throwing the odium of the measures pursued by them upon
Government. Considerations of common justice-of national honor-and of permanent security for our foreign and domestic commerce-were equally disregarded in their measures, as in those more recently pursued. To such a pitch was this policy finally carried, that the confidence of the banks in each other was finally destroyed. A degree of embarrassment was produced, which greatly exceeded that of the revulsion inflicted by the operations of the Bank of the United States, upon the Middle, Southern and Western States, in 1819, * 1820 and 1821. A single instance, out of many which might be mentioned, will fully illustrate the advantages of the right of furnishing paper-currency free from all security for its redemptionwhich occurred, too in the State of Rhode Island, whose policy in regard to banking, s so extravagantly lauded by Mr. Carey, as a near approacn to his beau ideal of currency. The Farmer's Es. change Bank, of Gloucester, failed early in 1809, with nearly seven hundred thousand dollars of its notes in circulation. On examination by a legislative committee, the whole amount of available assets to meet this enormous sum was found to be eighty-six dollars and some odd cents. Its currency to the amount of eight hundred and fifty thousand dollars had been exchanged for valuable property, by the individual who had obtained the control of the bank, but who was ostensibly neither president nor director. This vast issue had been made upon his obligations to the bank, which on their face left the period of payment to his option, and in fact afforded no indemnity whatever to the public. During the three or four years preceding the war, the actual loss to the industrious and producing classes in New England, from the failure of banks, reach. ed several millions of dollars. To promote the political dissatisfaction which we have explained, the banks in the large towns had previously curtailed their issues, after having monopolized the principal amount of metallic currency-and had left the channels of circulation, throughout that section of the country, to be filled up with such currency as was afforded by the Farmer's Exchange Bạnk, the Berkshire Bank, the Hillsborough Bank, the Hallowell and Augusta Bank, and numerous other swindling institutions in each State. The banks in the large towns universally refused to receive this currency, and the principal merchants invariably declined it, because it could not be deposited with them.
The losses accordingly fell almost entirely upon the industrious and unprotected portions of the community.
By the rigid system of curtailment previously adopted by the banks which survived, they were easily enabled to maintain specie payments, when the banks in every other part of the Union suspended in 1814.
The over-sight which has led to this explanation, does not call on us to expose the false facts alleged by Mr. Carey, as to the control exercised by “widows and orphans" over the banks of New Eng. land. It would be easy to shew that the seductions of this system, of which he so often boasts, are grossly exaggerated in his publica- . tion But after occupying so much space for the purpose of restoring our original statement to its integrity, and showing its bearing upon the banking system of New England, so much lauded in almost every page of the reply, we must return to Mr. Carey's sug. gestion that we have
"Collected a large quantity of true and false facts, and has put them together apparently without much regard to the effect they were calculated to produce, whether for or against his friends, and the consequence is much more likely to establish a conviction of the danger of increasing the power of the government over the currency, than of the propriety of yielding to it what has been so pertinaciously insis:ed upon.”
In another part of the reply he says: “ The Democratic Review is an advocate of an extension of the power of the ga vornment over the currency, and of a diminution of the power of the people."
And again : "It has been so uniformly the practice of governments to retain the control of the currency, that even of those who are friendly to the credit-systeni, a large propor. tion cannot conceive of steadiness in the absence thereof. In favor of regulation there are, therefore, the advocates of Executive power, like our Democratic Reviewer, and all those who are accustomed to think because it has existed, that its continuance must be necessary."
We have placed these passages from different parts of the reply together,and but for the trouble of copying them might have collected a dozen others of similar tenor, for the purpose of requesting our readers to examine them, and ask themselves what was the object and import of the several speeches upon the currency, delivered by Messrs. Clay, Webster, Southard, Davis, Crittenden, Merrick, Bayard, Robbins, &c. in the Senate, during the special session and the last session of Congress? We cannot refer individually to the tempest of eloquence which issued from the House of Representatives, which was apparently as full of wind on this subject as the cave of Eolus of old. Did not every one of these distinguish.
ed persons insist that the General Government not only possessed the power of interfering with the paper currency, but that it was its imperative duty to do so for the relief of the people? We strangely misunderstood Mr. Webster's celebrated speech which was stereotyped by the hundred-thousand, and sent into every part of the Union, at the expense of the Bank of the United States, if its whole drist was not to demonstrate this power and duty on the part of the General Government. We well remember that Mr. Clay assailed the President in unmeasured terms, during the special sessisn, for expressly disclaiming all power and jurisdiction in the General Government over the subject. In the message at the commencement of the session, it was strongly affirmed that the domestic interchanges among the people should be managed by themselves, according to their own interest and convenience. On this point the President explained his views of the Constitution at length, and with great clearness and effect. Up to the close of the jast session, the Opposition orators in both Houses of Congress were importunately clamorous for the interference of the government with the currency, as the sole means of relief for the people, from the embarassments occasioned by the suspension. Now after the firmness of the Executive has compelled the banks to resume their duties to the community, and the confidence which their profligate management had destroyed has so far returned as to produce a general revival of commerce throughout the country—there comes a juggler from the Philadelphia school, professing to be the organ of the Whigs, and with a single stroke of his magical wand, totally reverses the relative position of the parties during the last two years! Whether the distinguished leaders of the Opposition in Congress to whom we have referred, are ready to adopt the doctrines of the President, as stated in his message at the special session, has not yet appeared. The Jim Crow evolution in which Mr. Carey has with so little ceremony involved them, seems rather too quick in its movement, and the “ turn about" rather too rapid to be consistent with senatorial dignity.
As to ourselves, we deny now what we denied in our former Article, the existence of the right in the General Government to interfere with any currency whatever, excepting gold and silver, the power over which is expressly granted in the Constitution. And it is a specimen of the fairness of Mr. Carey's reasoning on this subject, that while the very phrase which, by common consent, used to embody the general policy of the present Administration, in relation to the public finances, carries with it the idea of the total disconnection of the union heretofore existing between the Government and the banking system, he undertakes to designate the ad. vocates of the “ Divorce of Bank and State," as the friends of a strong governmental influence and control over the business of banking, and the trade in inoney.