he believed was the correct mode of procedure, when members could not see their way very clearly on any subject, particularly when it was proposed to legislate without the power of repeal for twenty years to come, and when that legislation was to create a vast machine, the direction of whose momentum is to be put into the hands of we know not whom. A similar question, less extensive in its nature, on the proposition to renew the charter of the Bank of the United States, had agitated the country from one extreme of the continent to the other, and Congress particularly. This agitation had been so recent, that the proposition of a similar character ought to give rise, at this time, to serious reflection, at least, if half that had been then said on the subject was true. The present measure, Mr. S. said, presented itself to him in an infinitely worse aspect than that to which he had referred, and the two gentlemen who had discussed the question. had shown, that the best informed and most zealous in favor of the measure, did not understand its bearings, or agree in its effects or principles, &c. The question was yet to be decided between those gentlemen, he said, whether this was to be a specie, or a paper bank; but, for his part, he protested against the establishment of any bank which was not, from the beginning, a specie bank. He saw a wide distinction between the bank now proposed to be established, and the old Bank of the United States; the object of the latter was to increase the active capital of the country, and to facilitate the operations of the Government in the collec tion of the taxes, whilst the motive of this bank was directly the reverse; it was not to increase, but to diminish the paper medium of the country. The surcharged circulation of paper, Mr. S. then argued, would not be removed by throwing in the additional quantity of paper to be issued by this bank. The great extent of the proposed capital of the bank, three and an half times that of the late Bank of the United States, (with the privilege to increase it to five times the amount) imposed it as a duty on those who advocated it, to show the use of so large a capital. In answer to the argument that our commercial transactions had increased since 1791, in the proportion of five to one, Mr. S. said gentlemen appeared to have entirely lost sight of a consideration which was essential in the discussion of this subject; that, in 1791, we had but three banks, and now, we had two hundred and sixty, supplying a capital of more than twenty times the amount then in existence. This additional capital was, therefore, he argued, not necessary to the purposes of commerce. As the means of establishing an uniform medium of circulation, Mr. S. contended, that a capital of twenty millions would be large enough for any useful purpose, and would be able to throw into circulation a larger amount than that of depreciated paper, which the gentleman from South Carolina proposed to withdraw from circulation, in order to appreciate the notes of existing banks. This bank, established on true commercial principles, (and such he wished it to have) would be guided by that instinct of gain which the gentleman had ascribed to banking institutions, and, with a capital of twenty millions, would do a business quite extensive enough to answer any useful purposes.

Mr. S. further objected to the plan of the bank embraced in this bill, that there was nothing in it which would save this national bank from the same extremity of difficulty, bankruptcy if gentlemen chose to call it so, in which other banks had been involved; it had no other liability or responsibility for its engagements than those which are common to every other bank. Mr. S. did not join in the censure of banks for that which was said to have been the cause of suspension of specie payments, viz. the loans to Government, which the pressure of Government and public sentiment had urged them to make to the Government in a greater extent than they ought to have done. He was willing to coerce the banks to pay specie, if they were not disposed to do it when they could; but, he intimated, he was unwilling to try an experiment, which, if it did not operate as he wished, would only have a tendency to ag gravate the evil.

If the State banks had violated their faith, how, he asked, did the Government stand in that respect? Let the Government set the example of redeeming its plighted faith. How was the public creditor paid at Philadelphia du

ring the war? Instead of being paid in gold and silver, or their equivalent, they were paid in notes of the banks of Baltimore, which had depreciated five or six per cent. at that very time. This mischievous example having been set by the Government to the banks, ought fault to be found with them that they did not pay their notes, when Government had given them the example? With regard to the present time, he said he should be glad to know why the treasury of the United States had not now the command of the specie payments and rate of exchange in its own hands? How much better, if the Government had this power, as he believed they had, that they should exercise it to compel the resumption of specie payments?

Mr. S. then proceeded to examine the composition of the thirty-five millions of capital of this bank. Referring to the report of the state of the banks of Pennsylvania, he said the Philadelphia banks, confessedly not specie banks, were in very nearly the same situation as this bank would be when it commenced operations. The Bank of Pennsylvania, for instance, with a capital of 2,500,000 dollars, had 1,800,000 of public stock, 400,000 of specie, &c. How was that bank worse off than this bank of the United States would be, with three-fourths of its stock public debt and treasury notes, and one-fourth specie? &c.

In every view this was a measure of doubtful expediency, and it would be sufficient if he were to say he would not grope in the dark, on a measure of so doubtful a character; especially as it proposed to throw into circulation a quantity of paper on principles which he saw, in existing establishments possessing the same materials, could not be redeemed with specie, &c. He wished explicitly to understand whether this was to be a bank for commercial purposes, or a Government bank. He could not for the life of him conceive, he said, why the Government was to become a partner to a scheme of this sort at all. He was willing to have a bank on plain intelligible principles; not a bank of deposite merely:for at this time of day people could not be found who would willingly embark their funds in any thing so limited; but he would not authorize the bank to issue any paper beyond the amount which it could redeem with specie. The notes should express on their face the currency or paper with which they should be redeemed, specie, treasury notes, or stock: for, as he showed, by various elucidations, money only could justly redeem a note given for money by an individual or by a government, &c. Prior to 1814, it had not been supposed that the banks had not conducted themselves on fair principles; the very instant, however, a state of things arose to create alarm, or when, from whatever cause, their notes were presented for payment, that moment the banks were unable to proceed in specie payments. This bank being put in operation on the same principles, how would it succeed better? Mr. S. concluded the speech, of which the preceding is a mere skeleton, by saying that he yet reinained to be convinced that twenty millions were not a sufficient capital for all the purposes for which the bank could be wanted.

Note by the editors of the National Intelligencer.

[We are requested by Mr. SERGEANT to give the following as a statement of what he said, or meant, on one point of his remarks on the bank question. It is scarcely necessary to say, that the reporter, in the hasty sketch of that debate, does not aim at any thing like verbal accuracy or amplitude-the limits of a newspaper, connected with the desire to place the substance of the arguments and proceedings promptly before the readers of the National Intelligencer, forbid it.]

Mr. SERGEANT said, that it was necessary first to decide whether we would have a specie bank or a paper bank. If we are to have a specie bank, I cannot consent to any bill for that purpose, unless it contains such provisions as will afford a reasonable certainty that it will be able to pay specie. If it should commence its operations as a specie bank, and afterwards be obliged to suspend specie payments, when its notes shall have gone extensively into circulation, it will produce all the consequences, so strongly described, which have followed the suspension by the State banks, in a still greater degree. I should

very much prefer a plan more simple and intelligible, that is, to allow the bank to issue no more notes for the payment of money than you are sure they can pay. If more paper is necessary, let it be paper in a different form, importing, on the face of it, no engagement to pay specie-certificates of credit, for instance, receivable in payments to the bank or the Government.

Mr. RANDOLPH rose to ask two questions, one of the gentleman from South Carolina, the other of the gentleman from Maryland: first, how the paper to be created by this bank will correct the vitiated state of our currency? And, secondly, how bank notes can answer the purpose of a circulating medium better than treasury notes? Though no stickler for treasury notes, Mr. R. intimated his opinion that they were, in time of peace, a better substitute for gold and silver, than any paper he had heard yet submitted. Mr. R. added some incidental observations, amongst which was the remark, that he was sorry to see the apathy, the listlessness on this subject; on a question, which, if it passed, would, perhaps, be the most important decided since the establishment of the constitution; and that, though he agreed fully as to the extent of the existing evil, the remedy had been totally mistaken, &c.

Mr. SMITH said, in reply, that the gentleman from Virginia, and himself, only differed in premises, not in their conclusions; and then answered at some length, the arguments of Mr. SERGEANT. Banks, to obtain a fair profit, he said, must discount to fifty per cent. more than the amount of their capital: but he would be willing they should not be allowed to issue paper to an amount beyond one-half their capital. He had stated that the banks of Columbia, at this time, had not more than two-fifths of their capital paid out in notes, and the old Bank of the United States, at no period, had out more than ten millions of notes; and this bank, unless it should sell its stock, could only do business to the extent of the cash in its vaults. Mr. S. protested against the attempt at dexterity, which was imputed to him by Mr. Randolph. He had distinctly stated his opinions, and argued fairly; he had asserted that the notes of this bank would be every where better than treasury notes; but it was on the presumption that the bank would redeem its issues with specie; and he repeated, that, if the bank be compelled to pay specie in a short time, as he was sure it would, then its notes would be greatly preferable to treasury notes, whether at Boston or New Orleans, &c.

Mr. WARD, of Massachusetts, hoped the amendment would prevail. He acknowledged that, in the progressive state of this country, it was not very important whether the capital was thirty-five or twenty millions; the latter amount could be used with nearly as much effect for any mischievous purpose as the former -that sum would be quite sufficient to influence the destinies of this nation. But he preferred the smaller sum, because he believed that amount large enough for every commercial purpose. During the existence of the old Bank of the United States, a period of very great commercial activity, that institution answered all the demands of the country; and he was confident that twenty millions now, in addition to the local capital, was enough. Mr. W defended the Boston banks from the charge of deception, in promising to pay specię without doing so. They had not, he said, broken their faith to the public, and any man could there obtain specie whenever he presented one of their notes for payment. If this bank is to pay specie, said Mr. W. I admit that it will be very useful; but if it does not, its notes will be much below the value of treasury notes, and will not answer any good purpose. He quoted the price of treasury notes at different places, and detailed the reasons for their unequal value; and such he said would be the condition of the notes of a national bank, unless bottomed and conducted on a specie capital. To expect a paper of unequal value to answer the purposes of a general medium, would be as bad, he said, as to expect pieces of cloth of different lengths to cover an equal space of ground in every part of the country. Mr. W. believed that nothing but mismanagement had caused the inequality in the value of treasury notes.

These notes were a common paper, emanating from the trustees of the people, to whom all the people were more or less indebted; and this paper could only have been depreciated by misconduct; which opinion he entered into some details to prove.

This bank, it was asserted, would remedy the great evil now existing in our depreciated currency. He did not believe it would. If the gentleman from Maryland, (Mr. SMITH) were to lay down before him a machine, and tell him it would fly, the gentleman would pardon him for saying he could not credit it, until he showed some means which would enable it to do so. So it was, he said, with the bank now under consideration. He deprecated the present state of things as much as any one, and hoped an adequate remedy would be provided. The United States, he said, lost, at present, by the depreciated currency, more per annum than the whole amount derived from the direct tax in the large State of Maryland. Such an evil called loudly for a remedy, and he hoped one would be applied; but a bank on the plan now proposed would disappoint its advocates, and fail to cure the evil. That this cure would be complete he did not however expect from any plan-some inconvenience would attend any remedy; it was to be expected-like the amputation of a limb to preserve life. In reply to an assertion made in the course of the debate, Mr. W. denied that the banks had loaned to the Government from any other motives than those of gain. Their turn had been served, he said, and in devising the plan of a national bank he should not be influenced by any strong regard for their interest. But the present question was on reducing the amount of capital; and he concluded by saying that, as the larger sum would increase the means of doing mischief, and the smaller would be sufficient for every useful purpose, he should vote to reduce it to twenty millions.

Mr. WRIGHT made a few remarks against the amendment. In former times, a capital of ten millions was found necessary; and the increased demands of the country would certainly require now the amount proposed by the bill. He declined giving, at present, he said, any opinion on the measure itself; but if a bank was to be created, it ought not to be less than thirty-five millions.

MR. TUCKER said that, before the question was taken, he would offer a few remarks on the propriety of rejecting the proposition of the gentleman from Pennsylvania, and of retaining the amount of capital which formed a constituent part of the plan of the committee that reported the bill. He would not enter into the general question at this time; he would waive all inquiries, for the present, into the constitutionality of the scheme, and into the policy of establishing an institution such as was in contemplation. By the amendment proposed, he considered it to be admitted that a bank was necessary, and that a considerable capital would be required to effect the important, the essential purposes which had induced the Committee of Finance to submit to the House a measure of so much magnitude, for their adoption. The question immediately before the House, and to which he should, therefore, strictly confine himself, is not whether this institution shall be erected, but whether the capital proposed be too great to accomplish its object.

In this inquiry, said Mr. TUCKER, I shall not dwell upon the danger of the bank as a great political engine, because I am inclined to agree with an honorable gentleman from Virginia, that, in this point of view, there is very little difference between a bank with a capital of twenty millions and one with a capital of thirty-five millions. If the bank can be used, and shall be used as an engine of oppression, the smaller sum would have little to recommend it in preference to the larger. We should scarcely discern the difference between the pressure of the two, distributed as the capital must be, through all the States of the continent. If, then, gentlemen are averse to a bank with thirtyfive millions of capital, because they conceive it dangerous to the liberties of the country, are they serious in declaring that they are in favor of such an institution, with a capital of twenty millions? Have they shown any reason for the opinion that the latter will not be injurious, if the former will prove

destructive; or are we to understand the proposition as indicative of a disposition hostile to the institution altogether, and not merely hostile to the bill before you, because of the exorbitant capital proposed? I hope not. Gentlemen assure us that they are favorable to the establishment of a bank with such a capital, and on such principles as are consistent with the general welfare, and I am willing to place all proper confidence in their sincerity. I must suppose, therefore, that they rest their objections to the amount of the capital on other grounds than that which has been suggested, since that would be equally fatal to every such institution, whose capital was at all calculated to effect the ends of the establishment.

The question as to the proper extent of the capital, must mainly depend on the result of an inquiry as to the probability of a bank of thirty-five millions carrying on its business profitably to the stockholders. If the proposed bank can readily find employment for the whole of the proposed capital, there can be no reason for diminishing it, with a view to the profits of those concerned. That such will be the case, must readily be admitted, when we refer to acknowledged facts, and apply them to the situation in which this institution will be placed. Of the amount of thirty-five millions, twenty-eight millions will consist of United States' stock, carrying an interest of six per cent., and thus, of itself, affording employment for so much of the capital. The residue, of seven millions, distributed through the Union, cannot fail to find employment. Facts within our knowledge, furnish the best test on this subject. We have been told, in the course of the debate, that when the old bank of the United States was established, there was only one other bank in existence whose capital did not exceed four hundred thousand dollars. Since that time, the number of banks has increased to upwards of two hundred and fifty, and the bank capital to more than eighty-two millions. Does not this fact prove the readiness with which bank capital can find employment among us? Does it not prove that, in this new country, which is every day opening to the population, new occupations for capital-in agriculture, commerce, and manufactures, there is no difficulty in disposing of real or fictitious capital in stimulating the active industry of the nation? Is it not, indeed, in strict conformity with the doctrines of all political economists and with the experience of every practical man, that in all new and growing countries, the great difficulty is not to find employment for capital, but to supply the demand for it? Is not our comparatively high interest itself an evidence that, notwithstanding the immense increase of capital, the demand has kept pace with the increase? If, as has been justly contended, the rate of interest is governed by the proportion between the demand for capital and the supply, the rate of interest here proves, that capital has not yet equalled that proportion to the demand which exists in other countries. The argument, then, which has been advanced in debate, that we cannot require so large a capital, because that of Great Britain is not as great, is not entitled to much consideration, for the reasons I have mentioned. New countries always require a greater capital, in proportion to their actual wealth and population, than old ones, because the field for its employment is always more extended in the former than in the latter. And, if the question as to the expediency of establishing new banks, depended only on the probability of their finding employment for their capital, none could doubt of the propriety of the measure. We have, indeed, on this subject, a test which rarely errs. Mercantile men are aware that additional capital can be employed in banking, with great advantage to the bankers. They form a class of our population which is proverbially said to understand its pecuniary interests, and to make accurate calculations of profit. These and others are every were engaged in the effort to establish new banks. In New York, as I have understood, it is contemplated to put into actitvity an additional bank capital of fourteen millions. In the State which I have the honor to represent, efforts have been lately made to establish fifteen new banks, with a capital, I presume, of about seven millions. Do not these things prove that there is a fair prospect of profit; and that, however we may differ as to the policy of increasing those establishments, there is no ground for supposing