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lution, and feeling a common interest in preserving all power in the hands of the oligarchy, naturally co-operated with them in all their schemes, and gave them a decided majority in almost every legislature in the Union. By their joint operation the number of banks was more than doubled in the space of time we are now speaking of, and nearly nine hundred manufactories of paper money were set in motion, pouring forth their rags, really as worthless as when first cast off by the beggars in the street ; but endowed with the magic name of money, they came forth" thick as autumnal leaves in Valombrosa,” a perfect shower, not genial like the vernał rains, but blasting and ruinous, polent only for evil. It was impossible to have employed profitably in the legitimate business of the country, real gold and silver, equal in nominal value to those spurious issues of paper money. Trade and commerce are regulated by uniform and invariable laws. They require a circulating medium, bearing only a small ralio to the actual productions of the country; and if, by any unforeseen cause, those productions should increase beyond the currency necessary to exchange them, they would furnish a basis whereon to rear a credit sufficient to meet the increased demand for money. A sound and healthy action of domestic trade, and a wise increase of foreign commerce, had no part in producing that flood of paper issues by which the land was deluged. The monied oligarchy would not have been laboring in their vocation had they consulted the common weal-the per. manent solid good of all the people in the measures they adopted. Their object was to get the public lands in exchange for their paper—to stimulate speculation-drive commerce beyond its wants and its means-o intoxicate the people with the idea of boundless prosperity—to make them reckless and extravagant, so that their property, in the end, their improvements, and their liberties, also, might fall a prey into the hands of those who had wickedly drawn them into the snare. Almost the entire public domain, amounting to townships, dukedoms, and principalities, fell into their hands—foreign trade was involved in a debt of thirty millions beyond its resources, and as a legitimate consequence, an enormous surplus revenue was accumulated far beyond the most extravagant demands of Government. Hence there arose another difficulty. What shall be done with the surplus? We have not only to regulate by law the connection between Bank and State, but we have to dispose of the overflowing revenues naturally resulting from that alliance.
Both of these difficulties were solved, to the satisfaction of the monied oligarchy, by the act of the 23rd June, 1836. That law was the work of their own hands, and devised for their own benefit. By it, a perpetual union of Bank and State was solemnized; an indiscriminate reception of their paper issues was authorized ; a more equal distribution of the benefits arising from the use of the public funds was made among the entire fraternity of paper coiners; and a precedent was established by which the annual surplus should be distributed among the States, there to be used a second time for their benefit. No schemes could, apparently, be more happily devised to promote the ends of the monied oligarchy—the embezzlement of the fortunes and the subversion of the liberties of the But, by a kind Provi. dence, who has ever watched over the destinies of our Republic, their chosen instrument was made the means of producing their own overthrow-of catching them in their own snare
rementrapping them in their own craftiness. The act of 1836, instead of advancing the welfare of the banks, wns the chief cause of the disasters which subsequently befel them. But before we proceed to a consideration of that brench of the subject, let us dwell for a moment on the extraordinary precedent of distributing the surplus revenue among the States, under pretence of a deposite for safe keeping
That measure, more than any thing else, displays the true character and design of those who, from the beginning, have controlled the oporations of our Government. A proposition for distributing the proceeds of the public lands, and also the surplus revenue among the States, had repeatedly failed. Few were prepared openly to avow a principle, whose tendency was to destroy the independence of the States bind them as pensioned provinces to a central government of unlimited powers, and to blot out every feature of popular supremacy traced in the Constitution. But when the same principle was introduced in a covert and insidious way, it was immediately adopted by an overwhelming majority; and that which men would not directly attempt, was thus indirectly accomplished. The liberties of the people cannot be safe, when, by indirect legislation—a distinctly recognized violation of the Constitution-a precedent is established of such evil omen. The dangerous consequences of that measure are yet to be seen; they are to burst forth in full vigor at some future day. Be it remembered that the States, under the guidance of the monied oligarchy, are plunged into the wildest schemes of internal improvement. Jealous of each other's prosperity, rivaling one another in efforts to draw the trade and commerce of the country through their own channels, they have undertaken gigantic enterprises, and pledged the credit of the people for sums of money which would have started the Congress of the whole Union a few years since. States, whose revenues are barely sufficient to carry on the operations of an economical government, are borrowing enormous sums, to be expended by speculators and improvement mongers, on thriftless schemes which can never be of any advantage to the people. Already have eighteen, out of siz-and-twenty, involved themselves in a debt of one hundred and seventy millions. That debt is annually and rapidly increasing; and all the works put together, on which the money kas been expended have not, and never will have, a revenue sufficient to pay the accruing interest. The monied oligarchy, who have involved the country in these embarrassments, and placed themselves in a delicate position before the public, have but two alternatives whereby to extricate the community, and save themselves from the denunciations of the people. The one is, a resort to direct taxation; the other, to the surplus revenues of the United States. The first alternative they will never adopt, so long as it can possibly be avoided. They know very well that while they do not resort directly to the pockets of the people, they can cheat them, delude them, or oppress them, to their heart's content, and they will never detect the cause. But an open demand upon the purse-strings, an actual withdrawal of the taxes from the hands of the people, awakens their attention; it sets them to prying and examining into things. They will want to know for what purposes their money is abstracted from them. Such an inquisitive disposition would not at all suit the taste of the monied oligarchy, who know they could not give a just account of their stewardship. Direct taxation, therefore, is not to be thought of; the other alternative is the only one left, and, happily for all the schemes of the oligarchy, the very best that could be devised. A large surplus revenue, arising from the sales of public lands and the duties on foreign importations, can only be obtained by a connection of the Government with the banks, and an indiscriminate reception of their paper issues in payment of the public dues. Then, besides the entire force of the oligarchy, wielding all the monied resources of the country, as we have shown, and pressing the necessity of this Union, if we consider for a moment the tremendous auxiliary forces they have in those who are interested in the thousand petty schemes of internal improvement in all the six-and-twenty States. Here is an honest, well-meaning man, from some remote section, sitting in the Legislature of his State. Catching the mania for improvement, he has a little scheme of his own, by which he hopes to benefit his constituents, increase his own popularity, and retain his seat in the public councils. His mind is wholly intent upon that; he thinks of nothing else; and is willing to resort to any honorable means to gain friends and votes for his favorite enterprise. But he is told that the resources and the credit of the State have been exhausted ; that a resort to direct laxation would blow up their schemes and themselves at once; and that the only hope of success is to obtain a surplus revenue from the Federal Government. As the precedent of distribution has already been set, we have nothing to do but obtain the surplus, which might readily be had, could those radicals be once put down, and the Government permitted to go on in its usual course. Could the public dues be paid in such bank notes as the people receive, and again deposited in the banks, to be loaned out to speculators in public lands, and dealers in foreign commerce, we would soon have a revenue for distribution, sufficient to accomplish all our purposes; to pay the State debt, which has become a serious matter, and to complete all our schemes of improvement. Yielding to the plausibility of an argument which solves so many perplexing difficulties, and only suggests that things be permitted to go on in their usual course, a really honest man, and through him his constituents, who would not directly do any thing to jeopard the institutions of their country, are made indirectly to favor schemes whose inevitable results must be to bring down the States in vassalage to a central power, and finally to subvert the liberties of the people. This conflict, therefore, between the people and their rulers the monied oligarchy-the revolution, so far from being at an end, so far from being accomplished, has only begun. We are now enjoying a short armistice-living in a kind of armed neutrality; but when the shout for the rally and the onset is again heard, we shall find a host of auxiliaries, we little dreamed of, arrayed against the people. Many from among themselves, whose feelings and principles are the same with their own, led astray by the petty interests of the moment, and duped by the plausible insinuations of the oligarchy, will, in the next contest, be found arrayed against them. With earnestness, therefore, and sincerity, we warn the people, and tell them not to be deceived. The final conflict has yet to come; the shock of the allied forces has still to be met; the Waterloo field has yet to be fought. I was only deferred by the catastrophe which has recently befallen the banks catastrophe brought on them by their own friends; but ordained and overruled by kind Providence, as the means of opening the eyes of the people, alarming them at their perilous condition, and preparing them with more eamestness and resolution to enter into the coming battle.
The monied oligarchy having succeeded beyond their most sanguine expectations, and overflowing with the ideal wealth poured into their laps by the credit and resources of the Government, became more avaricious than ever; and, in endeavouring to divide more equally among themselves the spoils of victory, overacted their parts; brought a great calamity upon the country; exposed the unsoundness of their doctrines, and the hollowness of that imaginary prosperity with which they had cheated and deluded the people. No proposition in political economy can be clearer than this: that the act of June, 1836, was the immediate and prime cause of the calamities which subsequently befel the banks in 1837. A few plain principles in connection with the history of these transactions will place the proposition beyond controversy.
Currency, like water, is always seeking its level-tending perpetually to a common centre. As the little rivulets that bubble up among the hills flow into each other, increasing and expanding as they go onward, until they pour their tributary streams into the great ocean of waters, so does currency in like manner, originating in small quantities in the remote and interior sections of the country, flow onward, increasing as it advances, until it finally falls into the great currents which are perpetually revolving around the emporiums of trade and commerce. Where all the agricultural productions of the country are accumulated, or their values exchanged for the manufactured articles and imported goods that may be consumed, there the greatest quantity of currency is needed, not only as a standard of value, but as the means of regulating the exchanges, and of liquidating the numcrous balances which daily occur in every transaction. Hence a circulating medium is required in very small proportions in the interior of the country. It is always tending towards the great mart of trade; and any attempt to disturb this uniform course would be as destructive in its consequences as a violation committed on the laws of physical nature.
An attempt to force water up stream would not be more disastrous than a similar attempt to force the currency backward in its channels. The soundest circulating medium and credit, based on the actual capital and productions of the country, when turned aside from their natural course, and disturbed in their accustomed revolutions through the emporiums of trade, would, from the very laws that govern them, fall into irregularities and embarrassment. How much more necessarily must those consequences have followed the actual condition of those two main springs of national prosperity at the time of the act now under consideration? In June, 1836, some twenty-five or thirty banks had in their possession, on deposite, more than thirtythree millions of public funds. This money, and private deposites, and their own capital, together with their credit, so far as it could be extended, were all loaned out to individuals and companies engaged in speculations in public lands, private lands, lots, improvements, stocks-on enterprises doubtful in their character, and depending on remote contingencies for a profitable return of the investment; so that the banks, in case of an emergency, contrary to the laws of sound banking, could scarcely command a dollar of their resources. All the other banks in the Union followed their example. Public officers also loaned out the funds in their possession, or employed them in their own private speculations. They could not perceive why that privilege should be allowed the banks and not to themselves. The only expectation the banks had of finally returning the public funds was founded on a fortunate result of the speculations in which their debtors were engaged, and on their own nominal and spurious capital. The public officers had their own private fortunes, the fortunes of their securities, and in like manner the fortunate results of the speculations in which they or their borrowers had engaged. And if the same rigid exactions were made of the one as of the other, the chances are in favor of the public officer, Chat he would pay a larger per cent. than the banks, on the public funds in their possession. At any rate, it is very natural that he should think so. And as there was no rule of justice by which the bank monopolist should enjoy such advantages over the individual; and as there was no law prohibiting him from using the public funds, he folowed the example that had been set him; and, along with all the rest of the world, plunged into every kind of speculation. A universal system of credit, from the reckless man of enterprise down to the day laborer, was created on the facilities furnished by the banks. And they thought themselves enabled to do so, in consequence of their connection with the Government, and their possession of the national resources. Every body was dealing on the credit of the banks, and the banks on the credit of the Government. It is obvious, therefore, that the very existence of this gossamer work depended on an undisturbed continuance of the existing relations between the parties. But many of the Banking interest were not contented with the existing state of things. A few only of the fraternity enjoyed a monopoly that was designed for the whole. We should never have joined,' said they, “in a crusade against the Bank of the United States, could we have anticipated such results. We cannot be satisfied with any thing less than an equal distribution of the spoils.' An equal distribution was, therefore, agreed upon.
An act was passed, requiring "that at least one ( deposite bank) shall be selected in each State and Territory; and that the Secretary of the Treasury shall not suffer to remain in any deposite bank an amount of public moneys more than equal to threefourths of the amount of its capital stock actually paid in; the Secretary was also required to see that the banks kept in their vaults such an amount of specie as shall be, in his opinion, necessary to render the said banks safe depositories of the public moneys."
The operation of such provisions, which were intended, in the language of the act, “for purposes of equalization," must be obvious to the commonest observer. To take the funds out of the natural channels of trade, where they had been accumulated, and distribute them among eight-and-twenty States and Territories; to compel the banks to divide some forty millions of money among three-times the number of depositories; and to force them to check and draft on each other for the amount of specie that might be considered safe by the Secretary of the Treasury, were operations of such severity as to test the strength of the soundest institutions, and to derange the best condition of the currency. If the mere transfer of three or four millions, from the Bank of the United States to other depositories on the opposite side of the street, was sufficient to produce the panic, the distress, and the disasters of 1834, how much more ruinous must have been the consequences of the law now under consideration? Out of their own mouths, therefore, we condemn thrm. But this was not all. The banks had to go through the ordeal, above described, from June to January, 1837. After that period they were required, within the space of nine months, to distribute thirty-seven millions of dollars among all the States of the Union; and, within two-thirds of that time, they actually distributed twenty-eight millions. This vast sum, which had been loaned to individuals, and had found its way into all the channels and ramifications of trade, was now suddenly to be withdrawn and scattered to the four winds. This fund, so far as it might be used as a means of adjusting the delicate relations between the banks and their numerous debtors, which it had been mainly used in creating, was to be totally annihilated. Indeed, annihilation, a bonfire of the paper, or a sinking of them in the ocean, would have been much better for the banks than the operation actually required. Boston, for example, was made to throw back into Maine, New Hampshire, and other places that trade with her, those funds which had accumulated there in the usual course of trade; she was required to create a debt against herself, and subject herself to drafts, and that for specie too, from regions which, in the natural course of business, ought to be indebted to her. In this way, contrary to every known law of currency, New York city alone was required to scatter thirteen millions, or more, into Vermont, Connecticut, Rhode Island, New Jersey, Maryland, Virginia, North Carolina, South Carolina, Georgia, Alabama, and Tennessee. But, notwithstanding that ruin was the inevitable consequence of so radical and disorganizing a law; and though the banks were forewarned to prepare for its operations, yet, taken as a whole, they never made any preparations, took no precautions whatsoever to arrest the evils or to blunt the force of the shock that was coming upon them. Instead of reducing their business, as prudence, honesty, and a just regard to the welfare of the country would have suggested, their line of discounts, and their issues, were actually greater in the spring of 1837, just before the suspension, than they were in the autumn pre ceding. While the laws of currency were totally deranged, and all the channels of business were billowing up from their deep foundations, the banks crowded all canvass, and madly pressed forward as though they were sailing on the bosom of a summer's sea, fanned by the breath of zephyrs.
How the monied oligarchy could haveever framed such a law, in the first instance for they were alone concerned in it, with the exception of a few deluded friends of the people, who had been deceived by their doctrines-has always been a matter of astonishment to us. We never could account for them but on one principle, that rohom God designs to destroy, he first makes mad—quem Deus vult perdere, prius dementat. Believing that he had designed to save our Republic, as an example and a guide to the world, we fondly trusted that he was about to adopt their own chosen means as the instrument to crush the enemy which had been cherished in its bosom, and to frighten away the vultures that had been feeding on its vitals. We had no commiseration, therefore, for the monied oligarchy, when, in 1837, they brought on themselves a train of calamities. And yet, indeed, they needed no commiseration. They had entire control over the legislation of the country, and knew very well how to use it in such way as to cast all the burthens of their own folly and madness on the shoulders of the people. Had they not been conscious of their power, they never would have exercised, as they did, the high prerogatives of sovereignty.
Some eight or nine hundred banks, having in their possession the currency of the country, resolved, by the common impulse and sympathy of interest, and with a simultaneous movement, to depreciate that currency—to debase it, in some instances, ten, some twenty, and some thirty per cent. below the constitutional standard of value. This high-handed act of usurpation and tyranny was no sooner committed than the State Legislatures were assembled to sanction and justify it. If penakies and forfeitures were to be incurred for this outrage on the rights of the people, or if any restrictions had been imposed on the operations of the banks in any of the States, those were the places in which the Legislatures met to suspend the penalties and forfeitures, remove the restrictions, make depreciated irredeemable bank papet