(«^-' il

H

Yale University Library

39002034563412

Sr4

Rant oul, Robert

in^

An Oration. . . ¦^','-' '
iorcester, 1837. •",>_' ,^

•», i I "54, i*^'^Sii^V-""r3s'''*'!fi, 4 ' v\I.r K .. -^

sto' I "'i'-^v'FV''

..Iif

41 Sr
-St* -^ "*-
#'/' ^
YALE UNIVERSITY
LIBRARY

1942

ORATION

DELIVEKED BEFORE THE

DEMOCRATIC CITIZENS

COUNTY OF WORCESTER,

WORCESTER, JULY 4, 1837.

BY ROBERT RANTOUL, Jr.
1 o

WORCESTER:
PUBLISHED BY MIRICK & BARTLETT.
1837.

Entefed according to Act of Congress, in the year 1837,
By Mirick & Barilett,
in the Clerk's Office of the District Court of Massachusetts.

MIRICK & BARTLETT, PRINTERS.

¦Worcester, July 4, 1837.
Sir: —
The Democratic citizens of Worcester County, assembled for the
celebration of the glorious 4th., elected the undersigned a Committee
to request of you a copy of your able and eloquent Oration delivered
this day. We are happy to make this request, and hope that an
Oration so -well adapted to the times, and calculated to effect so much
good, -will not be -withheld from the public.
Yours, -with sentiments of
Very great respect,
ISAAC DAVIS,
SAMUEL WARD,
NATHANIEL WOOD.
To Robert Rantoul, Jr., Esq.

Worcester, July 5, 1837.
Gentlemen : —
I have just received your very flattering invitation to submit to the
press the remarks delivered by me yesterday. I place them at your
disposal, though -well aware ho-w far they fall short of a thorough
discussion of the subject treated of.
With the utmost respect,
Very truly yours, &c.,
ROBERT RANTOUL, Jr.
Messrs. Isaac Da-vis, ) Commmitte of the
Samuel Ward, ' y Democratic citizens
Nathaniel Wood, Esqrs., ) of -Worcester Co:

ORATION

There is no incident in the history of mankind, except
the advent of their Redeemer, that can rival in importance
and interest that which we have met to commemorate. The
capacity of the people in any nation to govern themselves,
however excellent might be their intellectual, moral and po
litical education, and under whatever favorable circumstances,
was not merely called in question ; it was almost universally
denied : it was only the theory of a few sanguine speculators
upon human perfectibility, thinly scattered over the world,
untU the Fourth of July seventeen hundred and seventy-six.
Since that day it has been a fact, obvious, indisputable, pen
etrating everywhere, dispelling by its radiant clearness that
political bigotry, in which the millions of our race had blind
ly submitted to the fiat of arbitrary power as to the irresisti
ble decree of fate. It is the star of Hope and Promise.
Enlightened by its beams, the oppressed discern the weak
ness of the tyrant. They now no longer must bow their
servile necks beneath the yoke of one of their fellows, nei
ther stronger nor better than themselves: no longer must the
many sow, that the few may reap : no longer must myriads
toil, and sin, and suffer, and perish, that one glorious name
may fill a page in history : no longer shall the husbandman
and the artizan, torn from their peaceful labors to carry deso
lation and death to the homes of those who have never wrong
ed them, be dragged, brute victims to slaughter, at the cha
riot wheels of a conqueror. Freedom guarantees govern-

ments in the interests of those that are governed, and intel
ligence and virtue are now the only qualifications necessary
for the enjoyment of freedom.
Independence is proclaimed, and with the sound a nation
starts into being, not like her elder sisters, held in thraldom,
but all her limbs unbound and free ; not like them, slow of
growth, and after a tardy developement, attaining only to a
dwarfish deformity, but like Minerva, from the head of
Jove, al once mature in wisdom, courage, dignity, and
power, knowing her rights, and fully armed to maintain them
against every aggressor, asking nothing but what is right,
submitting to nothing wrong — equally ready to vindicate her
just cause, whether Britain provokes her youthful energies,
or France delays to do her justice, or Algiers or Mexico
insults her hardy sons upon that element which is their home
and empire. Her sudden entrance on the theatre of action
changed essentially the positions and relations of all the other
nations of the world. The nature of this change, the extent to
which it has already reached, and must proceed hereafter,
the momentous consequences that spring from it, affecting
both governments and subjects, to what peculiar dangers it ex
poses them and us, and how we may best secure and improve
the blessings of our most fortunate location and condition,
are all fair topics of inquiry upon this hallowed anniversary.
The field open for our discussion is fertile and inexhaustible.
Many have entered it, and some with signal and lasting bene
fit to their countrymen, but there is still rich room for more.
In view of the vast variety of considerations wliich suggest
themselves, and recollecting the ability with which this occa
sion has been often illustrated, one is at a loss to choose the
theme of a discourse addressed to an audience like that be
fore me.
The great experiment of our Independence has been in its
general results even more successful than the most sanguine
would have dared to hope. Allowing for all those deductions

which truth and candor, and justice to ourselves require to be
made in the account, there still remains a long continued ca
reer of prosperity, interrupted we must confess, by evils,
which for the most part, wisdom might have avoided or at
least mitigated, yet far surpassing the best estate of the most
fortunate people that ever before appeared upon the face of
the globe. The population of this Union has just reached its
second duplication since the census of seventeen hundred and
ninety — being now about sixteen miUions.* Tbe population
of our own State is this year double what it was at the date
of the declaration of Independence, while about a million and
a half of the inhabitants of other States are either emigrants,
or the children of those who have emigrated from Massachu
setts since the opening of the Revolution. Not the pressure
of want at home, but the cheap abundance of a richer soil in
the West, tempted tlj^ese multitudes of our, brethren to go out
to people the prairie, and subdue the wilderness. The
wealth of Massachusetts is probably ten times as great as
when the Revolution broke out; some estimates would make
it thirty times as great ; but if ten times only, it gives to each
family, upon an average of the whole Commonwealth,' five
times the amount of comforts and conveniences of every
kind, that they enjoyed before the Revolution. Those who
have staid by the old homestead have done well then ; if
those who have gone and are now going from among us have
done better, we desire to be devoutly thankful for the benig
nant srhiles of a kind Providence on our kindred and ac
quaintance. God speed them oh their way, and watch over
and bless them in their selected abode, and may they carry
» Population of the United States, in 1776, about 2,600,000. In 1790,
3,921,328. In 1830, 12,856,407. In 1837, about 15,720,000.
Popnlationof Massachusetts, in 1776, 348,094. In 1790, 378,787. In
1830, 610,014. In 1837, about 702,000.
Property of Massachusetts, in 1776 estimated at eleven millions of dollars,
but probably at least thirty millions, at the present value of money. In
1830, $208,660,407. Real value, in 1837, probably exceeding three hun
dred millions; perhaps four hundred millions.

8
with them, preserve, and perpetuate to the end of time,
throughout the broadest and noblest valley in the world, the
enterprise, the perseverance, the intelligence, morality, and
rehgion, the good old primitive virtues of New England.
Poverty, want, starvation, disease, misfortune, and crime
are the checks of population, and the amazing rapidity of that
progress whose measure I have just given, a progress where
by the inhabitants of this Union must exceed one hundred
millions within the life time of many who now hear me, proves
more conclusively than any labored argument, how seldom
and to how small extent these checks are prevalent within
our borders. Oh, knew we but our happiness, of men the
happiest we! Yet the happiness which we enjoy, vast in
comparison with the most numerous portions of our race,
approaches not by an almost equal difference tliat happiness
which Heaven has placed within our i^ach, if wisely deter
mining and boldly executing the policy and the measures neces
sary to develope in the highest perfection the greatest good
of the greatest number. Even what we have, we hold by
sufferance, so long as we deserve it, duly prize it, and guard
it with that perpetual vigilance which is the price that must
be paid for the living spirit of our institutions, without which
their empty form is worthless.
Our ship of state navigates no pacific ocean ; she rides the
stormy billows of hberty. Give her sea room enough, and
she rides secure, and defies the fury of embattled winds. —
Hidden perils only can endanger her safety. Treacherous
insects have been at work in tlie unseen depths ; slowly and
long have the coral reefs been rising ; if treason takes the
helm a moment, she strikes, and all hope is lost. But the ever
watchful eye of our experienced pilot, wise in counsel, reso
lute in action, sagacious amid difBculties, and unshaken by the
terrors of the crisis, has already descried the course through
which her passage opens ; she leaves destruction behind, and

goes bounding on her glorious way, a home of life and joy
and confidence, freighted with the welfare of a nation, and
cheered by the admiration of a world.
In the midst of our heartfelt rejoicing, as not unaware of
the greatness of our deliverance, let us look back and sur
vey the hazard past. Let us survey it calmly, yet faithful
ly, patiently and thoroughly. Who can tell how soon we
may find ourselves again in the same jeopardy. If so, dan
ger well known is already half avoided.
According to American principles, all men are born free
and equal, although in point of fact, a majority of mankind
live in slavery. The condition of slavery is an abuse. By
our Constitution, perfect freedom is a natural, essential, and
unalienable right. The body politic is formed by a volun
tary association of individuals, covenanting together for their
common good. The just powers of government are derived
wholly from the consent of the governed, all power residing
originally in the people, and all magistrates being merely
their accountable agents. The end of the institution, main
tenance, and administration of government, is to secure the
existence of the body politic, to protect it, and to furnish
the individuals who compose it, with the power of enjoying,
in safety, and tranquillity, their natural rights and the blessings
of life. It is not for the profit, honor, or private interest of
any one man, family, or class of men.
The source of all the legitimate power that a government
can possess is the general will. The only legitimate object
of government is the general welfare. The only legitimate
means, it can employ for this object, are the preservation
of social order, and the protection of each individual in the
enjoyment of his life, liberty, and property, according to
standing laws operating equally upon all the citizens. Such
is the theory of the Constitution of Massachusetts. It is the
theory of a democratic government, of a sovereign people
governing themselves. Its source, the public will : its aim,
2

10
the public good : its means, the pubhc order. Such also,
though much more strictly limited, is the Constitution of the
Federal Union. But the Constitution of Human Nature is
the same under American, as under European or Asiatic go
vernments. In the nature of mankind there exist the elements of three
different parlies which under every democratic government must
be expected to display themselves in very different aspects,
according to circumstances, their real character being often
so ingeniously disguised, at least as to two of them, that with
out a large share of penetration and sagacity, a disinterested
looker on would not at first detect it. These three parties
consist respectively of those who desire that the government
should tend towards an aristocracy, of those who desire that
it should continue to be purely democratical, and of those
who desire that it should tend towards anarchy — They may be
severally denominated Aristocrats, Democrats, Anarchists.
In every community there will be men of talents, wealth,
and energy, who, when they devote their whole powers to
the public good, will be numbered among the most excellent
and esteemed citizens ; and will enjoj', precisely in the pro
portion that they deserve it, the confidence of the people.
But if these men are not under the restraint of moral prin
ciples, if they feel no sense of public duty, but give them
selves up to the impulses of selfishness, being capable of
forming and pursuing systematic plans of personal aggran
dizement, under the guidance of their inordinate ambition,
they will strive to press into their service all the machinery
of government, and to make that machinery as effective as
possible for their purposes. These men would monopolize
power, and share the benefits to be reaped from the monopo
ly, exclusively among their own order. As all governments
anciently favored accumulations both of property and power
they bold fast both to ancient laws and usages, and fight man
fully .against the equalizing and liberahzing spirit of the age.

11

They delight to call themselves Conservatives, but are in truth
Retrogrades, for they vainly attempt to carry back society to
maxims and a regime which have had their day and are gone
forever. The popular party includes both rich and poor, learned
and unlearned, those endowed with genius, and those unbles
sed by nature ; but its greatest strength resides in what is often
called the middling interest and especially in the substantial
yeomanry of the country, for they have seldom any interest
adverse to the common good of all. Democracy is the par
ty of equal rights, equal laws, equal privileges, universal pro
tection. Its foundation rests upon eternal principles of
equity and justice. Its creed is in the ordination of Provi-i
dence, the Constitution of Nature, and the wisdom of Reve
lation. It has their common sanction, and therefore is not
troubled with doubts or inisgivlngs. Its policy is honesty,
and its counselors are common sense and an enlightened con
science. It has no partialities. It neither plunders the rich,
nor oppresses the poor. It does not reserve its smiles for
the fortunate, nor its frowns for the unhappy ; nor does it
look with envy on success or merit, or pass by with cold
indifference the helpless and abject, but its sympathies are for
all, wide as the world, and hberal as the sun. It rather re
veres those sacred axioms of immutable right which our fa
thers embodied in the Declaration of Independence, and in
the articles prefixed to our Constitution, and which form the
best inheritance they have left us, than blindly follows them
in any errors of their conduct wherein they forgot or violated
those axioms. It admires and participates largely in those
bold efforts for improvement which characterize our times,
but it is not blown about by every wind of doctrine. It nei
ther worships a venerable abuse because it is old, nor is car
ried away with every wild project of innovation because it is
new. But it moves steadily on in its beneficent course of
prudent, judicious, well considered reform.

12
The anarchists among us are so few in number, that they
hardly exist as a political party, yet that there are individuals
who hate the law which protects the honest man, a very slight
inspection of our jails and prisons will suffice to convince us.
There are men of irregular and ungovernable passions, des
perate and depraved, who would pull down all above them to
their own miserable level, but we look upon them with won
der, and regard them rather as monsters than as men. One
of the first objects of good government is to control them,
of course the more faithfully the government performs this
duty the more violent will be their animosity against it. Hav
ing interests adverse to the common interests of society, and
only hoping to rise upon the downfall of the good, they are
naturally destructives — the architects of ruin.
In those countries where ignorance prevails among the
masses, the aristocracy will govern, and the many will pay
tribute to the few. Such has been the situation of almost
the whole world, through its whole history, with one promi
nent exception in America, in the last half century.
In those countries where universal corruption and vice
have penetrated every class of society, until the body politic
is fully rife for destruction, the anarchists may for a moment
seize upon the powers of government, and endeavor to wield
them for their own nefarious purposes. But such a condition
is convulsive and unnatural, and there is no instance in histo
ry where it has continued beyond a very short period.
In those countries where the great majority of the people
are enlightened and virtuous, inequalities both of property
and power will be comparatively trifling. There, and there
only can the experiment of self-government be successful, be
cause there the democratic party will vastly outnumber all
other parties put together.
The aristocrats beheve, that "it is tlie part of wisdom to
found government on property," for the good of the few. —
The democrats believe that it is both wise and just to found

IS

government on the intelligence and virtue of the whole pop
ulation, for the greatest good of the greatest number. The
anarchists, setting aside wisdom and justice, would overturn
the foundations of government, to rid themselves of the
wholesome restraints which it imposes upon their dishonest
propensities and wicked passions.
The aristocrats go for their order : the democrats, for the
people : the anarchists, each one for himself.
The aristocrats would erect a fabric hke a feudal castle,
with a few capacious and splendid apartments, but with no
provision for the comfort of the family at large. The demo
crats would repair and enlarge the building so as to accommo
date, in the best possible manner, all the inmates. The anar
chists would tear down the house, for the sake of what they
might purloin while wandering amid the ruins.
The aristocrats, or self-styled conservatives, are consolida-
tionists. The democrats, or reformers, are constitutionalists.
The anarchists, or destructives, are practical and thorough
going nulhfiers.
Of these last I am loath to speak. I would not willingly
believe that there can be such a party on this side of the At
lantic : but the events of the last eight years show too clearly
that we have among us determined and inveterate enemies of
our laws, of our Constitution, and of our glorious Union. —
As every man, who has an estate, or a good character, or a
profitable employment, or a family, or a friend, or a hope
ever to possess any of these, or a spark of true patriotism, or
a sentiment of humanity, has a stake and must feel an interest
in the preservation of our established institutions, the absolute
destructives must be so few in number, and so weak in all the
elements of moral influence, that we need not waste a word
or a thought upon them, unless they were adopted into the
ranks and employed under the direction of those who profess
to be conservatives , bold bad men, with ambition gnawing at
the heart like the worm that never dies, and who marshal the

14
heterogeneous forces of opposition with the feeling of "the
first whig,"* better to reign in Hell, than serve in Heaven.
Is it conceivable, said Fisher Ames, thatthe owners of the
commercial and monied wealth of the nation, will plot a revo
lution that would make them beggars as well as traitors, if it
should miscarry.'' In these convulsions of the State proper
ty shifts hands. As well might they suspect the merchants
of a plot to choak up the entrance of our harbors, by sinking
hulks, or that the directors of the several banks had confede
rated to blow up the money vaults with gunpowder.
Mr. Ames gives his friends more credit for wisdom than
they deserve. Have we not seen a leader of our aristocra
cy proclaiming that we were in the midst of a revolution, and
another justifying the profanation of the Sabbath by the doc
trine that there are no Sabbaths in revolutionary times .'' — -
Have we not seen those who owe their political existence to
the Union, calculating the value of the Union ; those who
live by credit making war on credit by getting up a panic ;
those whose commerce our navy protects offering the grossest
insult to our navy ; manufacturers, who believe that the
slightest reduction of the protective duties would be "the
death warrant of the manufacturing establishments of New
England," on the brink of treason, because the protective
duties are not reduced, by collecting them in bad paper ;
members of Congress, who voted for laws which control the
Executive, threatening instant rebelHon if the Executive obeys
those laws.-" There is no infatuation too absurd for faction.
Disappointed aristocrats have always been the principal
fomenters of treason. Lucius Catallne was one of the high
er aristocracy. He was by nature greedy and prodigal, cov
etous of what belonged to others, lavish of his own. Of
course his pecuniary situation was desperate. He was a
member of the national Senate, and had been defeated in his
* Whiggism is the negation of all principle. The Devil was the first whig.
Dr. Johnson.

15

intention to be a candidate for the office of chief magistrate,
but at the time of the conspiracy he was determined to be
nominated again, though he had got into a small minority in
the Senate. He harangued his accomphces, and " when he
perceived all their spirits elevated, he pressed them to take
care of his interest at the next election." He collected a-
bout him eleven other Senators, all the speculators, and those
who had pushed the credit system too far, the young men of
quality, and anarchists void of every honest hope. Crassus,
the Biddle of the day, was beheved to be privy to the de
sign, because he hated the old hero who then defended the
constitution, and besides, he hoped if the conspiracy succeed
ed, with the immense funds under his control, to govern
the conspirators. Catahne pretended that he had undertaken
the cause of the oppressed, and his followers maintained that
he was a defender of the constitution.
The Catallnes of all ages are ahke. The .Duke of Or
leans employed Danton, just as our aristocrats would have
employed our anarchists, hoping to cheer them on and call
them off as easily as a hunter does his hounds.
A coalition of the partizans of arbitrary government and
of the enemies of social order is not unnatural. Extremes
often meet, and in the present case, they are drawn together
by a common interest, to aggrandize and enrich themselves
from the plunder of the masses. This Is not only the plan,
but the practice, and to a very considerable degree the suc
cessful practice of both members of the existing coalition. —
Those who aim to introduce a strong government, desire to
make use of its powers, as the aristocracy of all old nations
have done, to direct to their own reservoirs those innumerable,
minute streams of wealth, which, under the equalizing influ
ence of freedom, diffuse a general fertility over the whole
surface of society. Those who would pull down all estab
lished institutions, and violate the right of property, can be

16

only actuated by the hope of appropriating to themselves
fragments of the wreck more valuable to them than their
present Interest in the fabric. Though these ulterior designs
may never be realized, and in their full extent never can be
without a revolution more terrible than any yet recorded in
history, still it will be the part of wisdom to understand pre
cisely how far the coalition have advanced towards the end
they have in view. The perilous progress towards consolida
tion was indeed appalling, and the firmest friends of their
country had begun to apprehend that it was irresistable, when
it encountered an obstacle which neither force nor craft could
remove, nor seduction, intrigue, or intimidation overcome.
The old Roman vigor, incorruptible integrity, and austere
probity of Andrew Jackson, sternly rejecting the immense
accession of Executive influence and patronage which an in
fatuated opposition never ceased for a moment to urge upon
him, turned back the current of federal encroachment, and
restored, before it was too late, the violated constitution to
its original purity. During his career as chief magistrate,
the world beheld for the first time the astonishing spectacle,
which, unless human nature be wholly regenerated it will
seldom witness again, of an administration, which voluntarily,
and in defiance of the bitterest opposition, in defiance of re
proaches, threats, and maledictions, diminished its own reve
nue ; Hghtened, by refusing income offered and almost forced
into its hands, the burthens of the people ; cut off and cast
from it the strongest means of influence ; lessened the num
ber of its powers ; narrowed the limits of its action ; and not
only restrained itself from corruption, and abuses, to which
its enemies invited it, but removed to the utmost of its ca
pacity, the possibility of abuses and corruption hereafter. The
overthrow and ruin of that administration were confidently
predicted if it should dare persist to follow the self-denying
path of duty. Truly formidable was the combination of
learning, and talent, and wealth, and weight of authority en-

17

listed against it ; fearful was the conflict, and doubtful for a
while seemed the Issue. But the Hero who filled the post
of danger had adopted the maxim of Metellus, whom, in un
bending fortitude and unblemished virtue, he most resembled.
"If it were always safe to do right, who would ever do
wrong .'' It is the part of good men to do that which is
right, even when least for their safety." He was ready
therefore to take the responsibility of fulfilhng the oath he
had sworn, of maintaining the Constitution of his country,
and of seeing, that her laws should be faithfully executed. —
Andrew Jackson had made an experiment some years before
at New Orleans. He had tried, and knew the effect of a
well directed energy in scattering the solid columns of British
veterans, officered by choice scions of British nobility. He
was not therefore to be driven from his purpose by the most
determined onset of whatever array of British principles,
British precedents, and British interests, the whole British
party in these United States could marshal against him. He
proceeded steadily in the work of Reform. God speed the
right, was the fervent prayer of every true hearted patriot,
every honest statesman, every wise philanthropist in the
world. That prayer was accepted. The enemies of our
Liberty rushed upon him in mad fury, to hurl him from his
station. Like the unclouded summit of a lofty mountain,
against whose base the storms spend their vain rage, he stood
unshaken, above the whirlwind of passions that threatened
the overthrow of our social institutions. Where now are
his assailants .'' Shall I say, a Waterloo defeat awaited them .'
Our language furnishes an expression somewhat more em-
phatical. A New Orleans defeat annihilated them. 'Nullifi
cation is nullified. The British Bank is bankrupt. The
British system of restriction is abandoned. Unconstitutional
taxation is disavowed. Massachusetts cannot be assessed to
tunnel the Alleghanies. The traitors who deserted the cause
of their country in the hour of her peril have sunk into con-
3

18
genial oblivion. The tenant of the throne of Napoleon has
redressed the wrongs of his predecessor. The last remnant
of the system of consohdation has disappeared, and neither
from discontent and division at home, nor through aggression
from abroad, can any opportunity now be anticipated to re
store its hated sway. The consolidationists are completely
consohdated, "if to crush be to consolidate." The nulllfi-
ers have folded up that tattered banner which bore for its
motto that ' ' miserable interrogatory — What is all this
worth.''" — and the northern and the southern whigs, alike
discomfitted, despair of seizing the government and wielding
it for their own purposes ; or of overthrowing it, by an or
ganized rebellion, to rule over the ruins.
But though both members of this unholy alliance must
have surrendered long ago their hopes of carrying their
plans directly and openly' into effect, yet by the control of
the monied power of the country they have reaped and are
Still reaping much of the advantage they might have expected
from a victory over the government. Though in a minority,
they were strong enough to prevent the reduction of the rev
enue to the wants of the government ; though the reductions
which have been made with the concurrence of the adminis
tration, and which it wished to carry farther, removed from
the shoulders of the people taxes to the amount of at least
one hundred and thirty millions of doUm-s, since the year
eighteen hundred and thirty. The whigs contrived to pre
vent a sufficient reduction, in order to accumulate in the
Treasury enough of the people's money to constitute splen
did bribes to the States ; in hopes, by the offer of so much
plunder, to purchase votes at the elections of eighteen hun
dred and thirty-six. Having brought about by their manoeu
vres the deposit act, a measure of which they boast as their
own work, they have been sadly disappointed in pocketing
the spoils ; thanks to the democratic spirit which prevails a-
mong the yeomanry of the land, even here in whig Massa-

19

chusetts. When the farmer puts his "huge paw upon the
statute book," it is to do equal justice to all, not to parcel
out riches to favorites. But though the public treasure did
not reach the destination Intended for it by the projectors of
the distribution, it fully answered their expectations in anoth
er point of view : it deranged incurably the circulation and
business of the country. In August, eighteen hundred and
thirty-three, the public deposits in the United States Bank
amounted to about seven millions and six hundred thousand
dollars : in December, of the same year, they were di-'
minished to about five millions one hundred thousand dol
lars.* During part of the intermediate time the amount was
increasing instead of diminishing. What was withheld was
deposited in other banks, in the same cities, where it was
loaned on quite as liberal terms, to say the least. Yet every
whig statesman in the country is pledged to the opinion that
this removal of less than two and a half millions, in more
than four months, by an operation carefully conducted, from
one side of the street to the other, was sufficient to convulse
the whole corrimerce of the nation, to bankrupt tens of thou
sands and to overwhelm in one common ruin the industry and
enterprize of these United States. It will be recollected
that it was in August that the Great Bank began to contract,
and in December that those terrible panic orations were ful
minated from the capitol, to spread desolation through the
land, if panic could break down credit, and if the annihila
tion of credit could be as disastrous as they proclaimed
the gentle touch it had received had been already. If those
gentlemen believed their repeated declarations, and if they
were not idiots, they must have intended, when they voted
for the distribution bill, to produce calamities ten fold greater
* Public moneys in the Bank of the United States in the latter half of the
year 1833. July, 0,511,503,32 October, 9,863,435,58
August, 7,599,931,47 November, 8,426,305,69
September, 9,182,173,18 December, 5,162,260,63

20

than those they attributed to the removal of the deposits. —
The distribution bill reraoved eighteen millions of dollars
from the United States Treasury, in about three months —
not a half million in a month, and gradually, across the street,
but nine millions in little more than one month, and nine
millions more at once, on the first day of April, much of it
to be carried thousands of miles from the points at which
the necessities of business had collected and required it.
Nine millions more have just been called for on the first in
stant, and the same sum is to be again abstracted from the
channels of business on the first of October next. K there
was a man in Congress who believed the tithe of the panic
doctrines promulgated there three years and a half ago, he
must have anticipated with perfect certainty that this violent
operation would effect the last great whig exploit, the sus
pension of specie payments. Those who denounced the re
moval of the deposits as fraught with ruin, and yet afterwards
advocated the policy of distribution, should inform us whether
they wish to be regarded as hypocritical in their professions
in the first instance, or, in the latter case dishonest in their
conduct. The suspension of specie payments having been naturally
brought about by the paper money party, by their unprece
dented overbanking and consequent speculation, having been
precipitated by their favorite measure the distribution, having
been recommended by them long before it happened, justi
fied by them ever since, and profitable to them while it lasts,
is the appropriate consummation of the whig policy upon the
subject of the currency. By a currency of irredeemable
paper the many are made to pay tribute to the few. The
aristocracy, who in all countries desire to enrich themselves out
of the taxes of the people, make it an engine of taxation. —
Anarchists, whose aim is plunder, through its instrumentality
^njoy a rich harvest.
Our monopoly, paper money, banldng system in its best

21

estate, when free from derangement, and enjoying undoubted
credit, imposes heavy taxes on the people. The expenses of
carrying on the whole complicated machinery fall ultimately
upon the consumer of the goods which are bought and sold
by the borrowers from the banks. As the consumer in the
country has to pay interest on the capital invested in these
goods for a much longer time than the consumer In the city^
as the poor man, buying in smaller quantities, pays a much
larger advance on the first cost, and consequently on the in
terest which makes a part of the cost, than the rich man who
buys in larger quantities, this tax, as well as all other taxes
levied on consumption, falls more nearly an equal imposition
of so much a head on the whole population, than in any
other proportion. The rent of land and buildings, loss, and
repairs upon them, cost of bills, salaries of the various offi
cers, presidents, cashiers, tellers, clerks, and messengers,
fees of notaries on protested notes, fees of attorneys on suits
brought, all these are paid, with interest on them all^ by the
consumer. These charges in the aggregate must considera
bly exceed one per cent on the capital employed. The
capital stock of the banks in Massachusetts is about forty
millions. For the expenses of these banks, then, we, the
people pay of our earnings more than four hundred thousand
dollars per annum.
The Bank tax to the State Treasury is drawn from the
same source, and robs us every year of four hundred thou
sand dollars more. I shall be answered that it defrays the
expenses of the State : what then .'' Is it just to defray those
expenses by a capitation tax .'' Ought they not to be borne
in the ratio of property .'' But the bank tax, just or unjust,
even if it cost the people nothing, has been a curse to this
Commonwealth rather than a blessing. It has introduced
corruption into the State Government, augmenting its ex
penses more than the whole amount received from the banks.

22

In eighteen hundred twenty-four a committee of both houses
of our Legislature reported that the expenses of the State
were enormously great and ought to be diminished. Ever
since that time they have been rapidly increasing. In eigh
teen hundred and twenty-five they amounted to less than
two hundred thousand dollars, last year they exceeded six
hundred thousand ! This we owe to the bank tax, and to
that tax we owe the present unparalleled extension of our
banking system : the one per cent to be annually paid to the
State operating, as a bribe whenever new charters are asked
for. The Bank receives interest not only on its capital, but also
on that portion of the debts it owes which is represented by
its circulation. The people are thus compelled to pay in
terest first on what they owe the Banks, and second on
what the Banks owe them. For the use of their capital, it
is right that they should receive a fair compensation, but the
povv'er of putting their own debts in circulation and receiving
interest on them as long as they remain unpaid is an exclusive
privilege of the Banks, and a tax is thereby levied from the
people. The whole circulation of the Banks by the State
returns last September was about eleven miUions. The in
terest accruing on this on banking principles exceeds seven
hundred thousand dollars.
The monopoly which the Banks enjoy raises the rate of
interest to those who wish to effect loans without recourse to
Banks, and enables the favorites of those institutions to take
(advantage of the state of the markets, which others, not so
favored, cannot do. This monopoly is undoubtedly worth
to the Bankers and their favorites much more than double the
profit they derive from their circulation. Of late years it is
the principal object in estabUshing new Banks. It taxes
the people more than fourteen hundred thousand dollars a
year.

23
By the combined operation of the Banking system and the
usury laws, it has become very difficult for any one not
belonging to the party of the Bankers to obtain money on
loan except through the intervention of brokers. The pro
fits paid to brokers for changing notes for money, discount
on uncurrent notes, commission for negotiating loans, and the
higher rate of interest on money borrowed by them at or be
low the legal rate, and let again for extra interest, all these
constitute another tax which the Banking System levies on
us. Whoever considers for how small a part of the money
let in this State the actual owner receives more than legal in
terest, while two and even three per cent, a month have been
paid on large sums for a great part of last year, will not be
disposed to doubt, especially if he recollects that the revul
sion in the money market returns regularly every three or
four years, that this tax far exceeds three times the profit of
the circulation. It is therefore more than two miUions, and
one hundred thousand dollars.
Bills lost or accidentally destroyed are also a tax on the
public. When a government calls in the metallic currency
to be recoined and reissued, the depreciation by friction and
clipping is a loss to the government. But when a Bank
calls in its notes, the vphole amount of bills lost, or destroyed
by wear and tear, or accident, is so much clear gain to the
Bank ; and not only so, but on double the amount of every
bill lost the Bank receives compound interest from the day
of its loss down to the close of its own existence. Thus for
all its biUs lost in the year eighteen hundred and seventeen,
the United States Bank has received eight times their value.
How much the Banks abstract from the public in this way
cannot be known until the expiration of their charters. The
sum is no doubt large ; but in the absence of fixed data, I
will make no attempt to estimate it.
So also counterfeit notes are a tax on the people, though
not to the profit of the Banks, yet a part of the price we

24
have to pay for the Banking System, a loss faUing almost
exclusively on persons of smaU property. They are not as
a class so good judges of bills, and counterfeiting is mostly
confined to small bills. There are about two hundred known
editions of counterfeit bUls of the United States Bank, and
about nine hundred editions of those of the local Banks.
How many of each edition ever passed into circulation we
have no means of determining, but evidently many millions
of dollars of it have been manufactured, and the loss which
falls on honest and unsuspecting poverty must be considerable.
It is useless to attempt to estimate it.
The loss by the failures of Banks, which always have,
and always will occasionally happen, is also a tax on the
community. By Mr. GaUatin's tables 330 banks were in
operation in 1830, and 165 had failed before that date ! We
boast of the superior prudence with which our banks are
managed, and of the safeguards which the laws have estab
lished for the protection of the pubhc. The greater security
of our New England banking system seems to be as well
settled as that there are fewer steamboats blow up on Long
Island Sound than on the Mississippi River. Yet the failure
of the Farmer's Exchange, Berkshire, Coos, Hillsborough,
Keene, Hallowell and Augusta, Wiscasset, Castine, Belcher-
town, Sutton, Nahant, and Chelsea banks, aU in New Eng
land, and not to mention more, are quite enough to demon
strate that sufeh catastrophes are by no means impossible. It
would be difficult to estimate the total loss they have occa
sioned. These are the burthens of legitimate paper money banking,
inseparable from the system ; and before proceeding to enu
merate the evils of overbanking, let us add up these items
which no one can deny must always exist wherever banks,
having the exclusive power to issue paper money, are to be
found. Let us look at the aggregate cost of these institu-

26
tions, and judge whether they are worth it in any good we
receive from them. The account, so far, is stated thus :
Expense tax, 400,000
State tax, 400,000
Circulation tax, 700,000
Monopoly tax, 1,400,000
Brokerage tax, 2,100,000

In aU, $5,000,000 —
besides lost bills, forged bills, and bank failures, not estima
ted, for which a round sum might be justly added.
These FIVE MILLIONS OF DOLLARS are mostly
the product of hard labor, and by the legerdemain of paper
money they are transferred to the pockets of the note makers.
Thus a tax is levied on the inhabitants of this Commonwealth
of about seven dollars a head, or from thirty-five to forty
dollars for each family. What feudal nobility ever gathered
a larger tribute from its vassals .''
There are one hundred and eighty thousand able bodied
men in this State, the average wages of whose labor cannot
exceed two hundred and fifty dollars a year. That rate
would give a total of forty-five millions : so that the manu
facturers of paper money and their associates convert to their
own use one ninth part of the wages of labor. This they
do without rendering any equivalent, for this whole tax is
exclusive of a fair interest on the actual capital loaned.
A large majority of those who earn the wages of labor are
unable to add to them the wages of skill, and very few receive
the still higher wages of machinery, yet all bear the burden
ahke. Though persevering industry and rigid economy will
enable a man living solely by the labor of his hands to
accumulate something, even under such disadvantages, yet
slow and hard must be the process, and it is evident that
many can never extricate themselves from a hopeless poverty
who might rise, were this weight removed ; and that many
4

26

who now attain a competence only when old age is unfitting
them to enjoy it, might have found themselves in easy
circumstances of pecuniary independence, in early manhood,
if the paper money tax had not borne them down.
We are yet upon the threshhold of our investigation. We
have examined the effects of our system of banking in its
ordinary and natural operation merely. We have not yet
touched upon the effects of overbanking. We have, it is true,
seen enough to give us some faint conception of the injury
a paper currency inflicts on the community, but its most
odious and alarming characteristics remain to be exposed. —
We will develope to the view its calamities, its convulsions,
its agrarianism, its paralyzing, desolating, withering influence.
Before we have concluded our enquiries we shall be satisfied
that there is no other evil in the land, except. Intemperance,
that can be compared for magnitude with Paper Money :
there is no other cause so fruitful of misery, pauperism and
crime. The first effect of overbanking is wild speculations, the
weight of which falls as a tax on the consumers of all foreign
and domestic products. Banks, by issuing paper, cheapen
the currency, and of course raise prices : rising prices tempt
more purchasers into the market, and the competition of
purchasers runs up the prices stiU higher. The banks furnish
funds to the speculators, and enable them to hold on their
purchases, in order to profit by the rise. The enhanced
prices take so much out of the pocket of the consumer, for
which he receives no equivalent.
In 1830, the bank capital of the United States was one
HUNDRED AND FORTY-FIVE MILLIONS : in 1836, it had risen
to THREE HUNDRED AND SEVENTY-EIGHT
MILLIONS: it is now probably about TREBLE its
aniount seven years ago. The paper circulation in 1830 was
sixty-one millions : in 1836 it was ONE HUNDRED

27
AND FORTY MILLIONS, the highest point it reached
was probably about ONE HUNDRED AND EIGHTY-
SIX MILLIONS. In 1830 the loans and discounts of the
banks amounted to about two hundred millions : in 1836
they were FOUR HUNDRED AND FIFTY-SEVEN
MILLIONS: they have since exceeded FIVE HUN
DRED AND NINETY MILLIONS. The bank capital,
circulation, and discounts, having raore than doubled, and
indeed nearly trebled, in less than seven years time, the
immense and unparalleled speculations we have witnessed,
have been the necessary result. Sales of public lands rose
from less than two and a half millions in 1830, to more than
twenty-four miUions in 1836. Lands in Maine were pur
chased in vast quantities at ten times their former prices. —
House lots enough were laid out to accommodate two or
three times the present population of the nation. The land
immediately about New York and within ten miles of that
city, which in 1830 was valued at ten millions of dollars,
changed hands at prices which would have made the whole
araount to over one hundred millions. Our imports increased
from seventy millions in 1830, to one hundred and ninety
miUions in 1836. Prices of all articles of consumption rose,
some forty, some sixty, and many a hundred per. cent. But
the wages of labor, fixed salaries, and compensation for
services of all kinds are the last to rise, and the first to fall,
in a general change of prices, nor do they fluctuate half so
much as articles of merchandise. Laboring men therefore
suffer most by the rise of prices which speculation occa?
sions. Those who live on fixed salaries, or receive fixed
fees, or enjoy the fixed income or interest of funds invested,
suffer next, in the enormous tax levied by speculators.
The hundred and eighty thousand laborers in the State
might earn, in the best of times, and if they were all
temperate and industrious, two hundred and fifty dollars, a
year upon an average. Of this they would find it necessary

28

to expend including the taxes of legitimate paper money
banking, already estimated, two hundred dollars, laying up
fifty at the end of the year, for sickness, or old age, or future
comfort. In the aggregate then, labor earns forty-five millions,
spends thirty-six miUions and lays up at the end of the year
a reserved sum of nine miUions. In a year of speculation
like the last, even if labor had risen to three hundred dollars
a year, which it has not, taking the vv^hole mass together, and
if the rise in consumable products had been only fifty per
cent., and it has been more, the laborer might earn his three
hundred dollars ; but In order to live as well as in ordinary
times he must also expend three hundred dollars, so that at
the end of the year he has nothing left. The wages of the
year will be fifty-four millions, and its expenditure fifty-four
millions ; accumulation, nothing : while without the blighting
influence of speculation, labor should have saved nine
milhons. The losses of those who Uve upon an income not
capable of sudden expansion, such as clergymen, widows and
orphans, and old men retired from business, agents and em
ployees of every sort are at least two thirds as much more,
or six millions. Those workmen who earn the additional
wages of their skill, or of some cheap machinery which they
employ, generally invest their earnings either in articles of
immediate consumption, or in tools, stock in trade, land,
buildings, and repairs upon them, and furniture. On all these,
their loss by the artificial prices cannot be less than three
milhons of dollars. The total of these three sums is
eighteen miUions, and as under our banking system we may
expect to suffer under speculation prices at least one year
out of three, one third part of that sum will be the annual
amount of the speculation tax, or six million dollars.
But all this is independent of the fortunes lost by those
engaged in trade and commerce, and the sacrifice submitted
to by one of the parties to every contract, by the fluctuations
in the money market, which foUow each other at intervals of

29
about three years, rising and falling with as much regularity as
the billows of the ocean, and having always a smaller series of
intermediate waves between the biUovvs. These fluctuations
are the natural result of the banking system, and will always
grow out of it. When confidence begins to return after one
of our terrible convulsions, prices, frora the mere fact that
they had fallen too low, begin to rise. This gives business
an impulse, and disposes dealers to borrow raoney and make
purchases. There Is a competition between those who wish
to supply themselves, as they are all anxious to lay in their
stock of goods before there is any essential advance. The
banks are wUling to loan freely for this purpose, because
purchases at the low prices being perfectly safe, they are
secure of repayment. Each bank can enlarge its discounts
and loans, because, as all the other banks are doing the same,
its bills are not forced home upon it for redemption. The
more money is issued, the more purchases are made ; and
prices rise both from depreciation of the currency, and from
the briskness of the demand. The faster prices rise, the
more pressing will be the applications to the banks for loans ;
and the banks, as their first object is to make large dividends,
will grant these appUcations as long as confidence continues.
New banks are created : old banks push to the verge of
prudence. More goods are Imported, more goods are
manufactured, production of every kind is over stimulated.
There must, however, be a pause in this progress. Either
from the depreciation of the currency, specie becomes of
less value here than abroad, and is therefore exported ; or
the market is so glutted with products, that buyers are
indifferent about taking them off the hands of holders, in
which case a competition arises among the seUers which runs
down prices ; or a suspicion springs up in the minds of
capitalists, or of the bankers themselves, and finally of the
whole community, that prices artificially high are unsafe, and
must faU. From whatever cause it happens, when once

30
confidence is shaken, the banks, willing or unwilling, must
contract. They find themselves in a precarious situation,
and to fortify themselves, they call in their paper, and diminish
their discounts. Contraction once begun, must go on, by a
necessity as irresistible as the decree of fate, for every bank
sends home the paper of every other bank. By the contrac
tion, money is restored to its true value, prices are reduced
again, and the improvident, surprised with large stocks on
hand, are ruined.
It is in the power of a corabination of banks, or of one
raammoth bank, to increas'e these periodical fluctuations, or
to create lesser intermediate vibrations, for their own advan
tage, at pleasure. In June 1819, a leading press, Nile's
Register, complained and justly too, that "We have now
indubitable evidence that twenty -five raen at Philadelphia can
make money plenty at their own will and discretion — an
immense command over the nation, by fixing the value of
every acre of land, and of any other species of property,
from the lovirest point of Florida, to the lake of the Woods."
It might with more truth have been alleged four years ago
that one man in Philadelphia possessed this power, and the
nation felt soon afterwards that he did not scruple to use it.
A bank with a capital of thirty-five miUions can make its
managers and their favorites rich, at a single operation, by
making money alternately plenty and scarce. Having first
secured large loans to its favorites as a permanent accommo
dation for twelve months or more, they then contract their
discounts suddenly. This compels all the lesser banks to
curtail their accommodations and collect their debts rapidly.
In three or four months time this sinks prices a fourth or
even a third. Then the managers invest their funds to the
best advantage, and the arrangeraents being completed, the
bank floods the country with its notes again, and the lesser
banks freed from the pressure of balances against them,
follow its example ; and money instantly abounds and property

31
assumes higher values than before its faU. The speculators
sell at the highest point, the bank itself furnishing the
purchasers with funds if necessary. When the golden harvest
is fully reaped, they may make money scarce again, and
prepare for anoiher.
In describing this process, Mr. NUes, in 1819, used this
strong language. "At the end of the year, the managers in
the scheme realize from fifty to one hundred thousand dollars
each, which they may be said as completely to rob the people
of, as if, with pistol in hand, they took the money from
travelers on the highway. Indeed the last should be
considered the most honorable." These expressions are
too severe ; they were wrung from sober men at that time,
by the torture which the United States Bank inflicted, when
it first regulated the currency, much as one raight regulate
the packing of gunpowder, by clapping a coal of fire into a
cask of that article. The bank no sooner touched the curren
cy than a universal explosion ensued, scattering the broken
fragments of credit over the South and West, and covering
the land with the wreck of blasted hopes, enterprise arrested,
commerce stagnant, industry prostrate, mutual confidence
annihilated, and the whole business intercourse of society
thrown into a chaos of irremediable confusion. Mr. Niles's
phrase was, "the bank was saved, but the country was
ruined." Their agony under the screws of the great engine
may excuse the sufferers mider the first regulation for the
intemperate warmth of such remarks. The victim broken
on the wheel is not expected to groan with grace and deco
rum. It is fashionable, now-a-days, to speak more tenderly
and respectfully of this mode of conveying one man's property
into another man's pocket, and no one I think would venture
to compare it with highway robbery.
It is neither to be asserted nor intimated, because it cannot
be proved, that the directors of banks, often, with a deliberate
design, create a pressure in order to take advantage of it, as

32

just now described : but the effect on the community, of the
Huctuations produced by banks, is of the same nature, even
in the absence, which we beUeve is generally the case, of
any injurious intention on the part of the managers of those
institutions. In times of scarcity, the directors and their
friends are naturally accommodated before strangers. Those
who stand at the source of the stream drink first. With
scarce money, they buy at low prices. When prices are
rising and raoney easy, then it is that the banks discount
freely, because they then can do it, not being pressed or run
upon. Then it is that the knowing ones seU, because then
they can seU highest, and pay their debts to the banks,
because just then a loan is no favor. A large balance of
profit reraalns in their hands, and as soon as a falling market
and contracted issues have brought about the proper moment
to enter on a new speculation, they are ready to borrow and
buy again.
But it is not only the favored borrowers from banks
who tax the people through these fluctuations, if it were,
that tax has been reckoned already in speaking of the advan
tage they gain from their monopoly. But the whole amount
of property transferred by the fluctuation, vast as it is, is a
tax on the losers, which the banking system has enabled the
gainers to levy on thera. We have not the means of
determining definitely the amount under this head, though we
have facts which will assist in forming an idea of its magni
tude. In eighteen months previous to June of last year the
discounts of the banks had increased one hundred and eighty
millions of dollars. Of course this additional sum was
invested in various ways at the high prices of that period,
and the seUers at those prices pocketed the whole advance.
Suppose the sums of which this aggregate is composed to be
expended in transactions averageing six months from their
inception to their completion, each sura would then make

33
two purchases in a year, and the additional discounts would
represent purchases in one year to the amount of THREE
HUNDRED AND SIXTY MILLIONS more than the
legitimate business of the country at average prices-. Of this
whole sum about one third part is not yet paid off, constituting
the extra debts of the people beyond their immediate means
of payment, and composed of about fifty miUions foreign
debt, and seventy millions domestic debt besides ah ordinary
indebtedness in the common course of business. That these
estimates are not extravagant raight be shown in many ways.
In January, eighteen hundred and thirty-five, the bank note
circulation was one hundred and three miUlons : January,
eighteen hundred and thirty-six, it was one hundred and forty
millions : increase during the year, to be paid in extra prices,
thirty-seven millions : increase during the next year, rather
more. Now aUowlng every doUar to make- ten payments in a
year which Is Mr. Gallatin's estimate, but which is much too
low, the whole amount of extra prices paid in the year above
the standard of the circulation of the first of January, would be
THREE HUNDRED AND^ SEVENTY MILLIONS,
about the same sum as before.
Look at some of the items. Cotton which averaged
about ten cents a pound for eight years before eighteen
hundred and thirty-three, last year averaged sixteen or
seventeen cents. Every cent advance on the pound is a rise
of near five miUions of dollars on the crop. Cotton having
risen at this enormous rate, speculations in cotton lands and in
negroes were proportionally extensive. The purchase of
public lands, referred to already, is nothing compared to
these. The negroes imported into Alabama last year cost
more than ten millions of dollars. Those carried into the
Southern cotton country together cost at least forty or fifty
millions. The growth of the State of Mississippi will
illustrate this fact. In eighteen hundred and thirty it had one
himdred and thirty-six thousand inhabitants : in eighteen
5

34

hundred thirty-seven by the census just taken it had three
himdred and two thousand, an increase of one hundred and
twenty-one per cent. In seven years. In the same time the
slaves in that State have increased from sixty-five thousand to
one hundred and sixty-two thousand, an increase of one hun
dred and forty-six per cent, in seven years, or twenty-five
per cent, a year. Cotlon lands have been bought as high as
forty dollars an acre, and slaves at fifteen hundred doUars,
and fortunate will it be for creditors if the next two crops
prove sufficient to pay off the balance of debt remaining.
If the whole capital employed in the growth of cotton is
to be reckoned at eight hundred milhons of doUars, at prices
two years ago, a rise of twenty-five per cent, only during the
last year would amount to an artificial advance of two hundred
millions. In New York the sales of lands at auctions in the city,
during the last two years, exceeded thirty-eight miUions. —
The faU on the price of stocks mostly owned in that city,
this spring, was estimated at twenty millions, by the commit
tee of merchants sent on to Washington, who also estimated
that merchandise of all sorts had fallen in that city at least
thirty per cent. The price of pork, flour, bread stuffs, had
been double what it was six years before.
From these facts it is evident that the losses by fluctuation
far — very far, exceed the sum that has been named. Of
this sura of three hundred and sixty millions, one eighteenth
part at least falls on Massachusetts, making her share twenty
milhons. As the fluctuation is continually going on, the
loss is annual.
On account of these fluctuations, no contract involving
the payment of money can be equitably performed. One
party or the other is defrauded by the alteration in the standard
of value. Either the debt is paid in a cheaper medium
whereby the creditor is deprived of his due, or in a medium

35
of enhanced value, to the injury of the debtor, and often to
his total ruin.
But in talcing into account the losses which grow out of
these revulsions, we must not stop at the mere rise and fall of
prices. The bankruptcies at every revulsion tax the com
munity heavily; the banks are generally secured on account
of the indorsers, for if these institutions bore their share of
the losses in proportion with other creditors, the business
must have been abandoned long ago. It is impossible to
measure this tax. In New York where overtrading has been
pushed to a great excess, the imports last year amounting to
$118,885,194, the failures have been raore nuraerous than
ever before known. Two hundred and fifty large houses
failed in two months. In New Orleans where the banking
mania had gone to the wildest extremity, the capital of the
banks in that-city being $54,554,000, of which the sum of
$36,769,455 is paid up, the faUures were for the most
tremendous amounts ; such as were never before heard of
in the United States. The New Orleans True American
of the thirteenth of April says — "On Wednesday the
largest cotton house in the southern country went by the
board for fifteen miUions of doUars. * * * *
The other houses that have suspended are estimated at about
twelve milhons."' These houses had all large assets; yet
the cotton monopoly fostered by the immense banking capital
of the city, was not only injurious to the public at large, and
to all smaller cotton traders, but having inflicted severe losses
on their creditors, it ended in the ruin of the monopolists
themselves. They fell blasted before it, like the magician
before the demon he has conjured up. In Boston before the
stoppage of specie payments, out of thirteen hundred and
seven wholesale and retail establishments, there had been one
hundred and sixty-eight failures : but the citizens of this
State have suffered by failures in other States as well as their
own, to an enormous extent. The losses to the people of

36

Massachusetts, from bankruptcies growing out of our paper
money system cannot be less than six mUlions of dollars a
year. In addition to all the losses by the fluctuations of our
mixed currency, there is now to be reckoned an actual
depreciation of the best bank paper below the specie standard.
On the tenth of May last, the banks in New York stopped
specie payment ; those of Philadelphia and Baltimore stopped
the next day, those of Boston on the twelfth, and those of
New Orleans on the thirteenth. The country banks were of
course compelled to stop, however much they might regret
the necessity. On the eleventh of May, one hundred doUars
in specie were worth in New York City bills of the nominal
value of one hundred and six dollars. On the first of June
bills of one hundred and nine dollars, and on the twenty-fourth
of June one hundred and twelve dollars, were required to
purchase one hundred dollars in hard money — a depreciation
more rapid than that of continental paper during the first
year it was issued. On the third of July bills were one
hundred and twelve for one hundred.
By the last bank returns of this state their circulation and
deposits together exceeded twenty-six miUions. Bv a de
preciation of twelve per cent., biU holders and depositors
¦would lose three millions on that sura. Those who pay their
debts in bad paper gain the amount of the depreciation, and
by paying off creditors at ninety cents or less on a dollar,
many raay be preserved from bankruptcy : but those who
receive the paper for debts, or are obliged to make purchases
with it, lose to the sarae amount. This is already allowed
for in speaking of the losses by the fluctuation of the
currency, except the loss in the hands of holders while it
falls. These then are the pecuniary results of a paper money
monopoly system, not that we have made exact estimates,
but the sums assumed are below the reality, and yet quite

37
large enough to illustrate the subject fully. Let us look at
their aggregate amount. —
Legitimate banking taxes, as before, $5,000,000
Speculation tax, 6,000,000
Fluctuation tax, 20,000,000
Bankruptcy tax, 6,000,000
Depreciation tax, 3,000,000
Aggregate burthen of the ) J^";^^
present paper system, ^ 'f* ' '
A sum equal to the actual capital employed.
That this sum is below the actual annual amount of the
losses sustained by the operation of the paper system, no
one can doubt who will take pains to examine the subject. —
It is indeed very far from the fact that this whole sum of
money is taken from one set df individuals exclusively, and
bestowed altogethei" upon another set. If it were so, we
should have been divided into lords and paupers, long ago-. —
Most of those who generally gain by the system, occasionally
lose by it ; and many of those who lose in the long run
occasionally come in for a share of the profits. If these
losses and gains of each individual would in a long series of
years balance each other, even then the injustice would be
gross and tbe effect highly demorahzlng. If every man were
compelled every week to put all his surplus earnings into a
State lottery, would he be reconciled to this arrangement,
because, in the course of his hfe, he might reasonably expect
to draw a prize or two, equal to all he had paid for ^ In the
currency lottery, the prizes are by no raeans equally distribu
ted : those who pay for most of the blanks, find their turn
seldom comes for a prize, and when at last it does come, their
prizes are -very small.
That the raan who loses by the banking system in various
ways, one hundred doUars, gains also by it in various other ways

38

sixty or eighty dollars, does not lessen the injustice of any
separate loss, still less does it do away the injustice of that
final balance of - loss of twenty or forty dollars, to which he
must after all submit. The use of Banks is a game
partly of chance and partly of skill, the best players lose
sometimes, and the worst players do not always lose ; yet in
a long game the best players always go off with the largest
winnings. It may be that ninety out of a hundred lose more
than they gain ; nine more gain enough to overbalance their
losses ; one out of a hundred gains decidedly ; one out of a
thousand makes himself rich, and one out of ten thousand
builds up a princely fortune.
This general effect of paper money banking, in the excess
to which it naturally tends, was admirably depicted by the
late President of the United States in his message at the
comraenceraent of the second session of the twenty-fourth
Congress. His views are thus expressed, in his usual plain
and decided manner.
"Variableness must ever be the characteristic of a cur
rency, of which the precious raetals are not the chief ingre
dient, or which can be expended or contracted without
regard to the principles that regulate the value of those metals
as a standard in the general trade of the world. With us,
bank issues constitute such a currency, and must ever do so
until they are made dependent on those just proportions of
gold and silver, as a circulating medium, which experience
has proved to be necessary not only In tliis, but in all other
commercial countries. Where those proportions are not
infused into the circulation, and do not control it, it is manifest
that prices must vary according to the tide of bank issues,
and the value and stability of property must stand exposed to
all the uncertainty which attends the administration of institu
tions that are constantly liable to the temptation of an interest
distinct from that of the community in which they are
established.

39
" The progress of an expansion, or rather a depreciation
of the currency, by excessive bank issues, is always attended
by a loss to the laboring classes. This portion of the com
munity have neither time nor opportunity to watch the ebbs
and flows of the money market. Engaged from day to day
in their useful toils, they do not perceive that although their
wages are norainally the same, or even somewhat higher, they
are greatly reduced in fact by the rapid increase of a spurious
currency, which, as it appears to make money abound, they
are at first inclined to consider a blessing. It is not so with
the speculator, by whom this operation is better understood,
and is made to contribute to bis advantage. It is not until
the prices of the necessaries of life becorae so dear that the
laboring classes cannot supply their wants out of their wages,
that the wages rise, and gradually reach a justly proportioned
rate to that of the products of their labor.
"When thus by the depreciation in consequence of the
quanity of paper in circulation, wages as well as prices
become exorbitant, it is soon found that the whole effect of
the adulteration Is a tariff on our home industry for the
benefit of the countries where gold and silver circulate, and
maintain uniformity and moderation in prices. It is then
perceived that the enhancement of the price of land and
labor produces a corresponding increase in the price of
products, until these products do not sustain a competition
with similar ones in other countries ; and thus both manufac
tured and agricultural productions cease to bear exportation
from the country of the spurious currency, because they
cannot be sold for cost. This is the process by which specie
is banished by the paper of the banks. Their vaults are
soon exhausted to pay for foreign commodities ; THE
NEXT STEP IS A STOPPAGE OF SPECIE
PAYMENT — a total degradation of paper as a currency —
unusual depression of prices — the ruin of debtors, and the
accumulation of property in the hands of creditors and
cautious capitalists."

40

The theory thus laid down by the President has been
followed out in its operation, by showing the modes in which
this accumulation in the hands of capitalists and creditors,
and this loss to the laboring classes and ruin of debtors takes
place. The summary is so frightful as to fully justify the
strong language used by Daniel Webster five years since.
" Of all the contrivances for cheating the laboring classes of
mankind, none have been more effectual than that which
deludes them with paper money. This is the most effectual
of inventions to fertilize the rich man's fields by the sweat of
thepoor man's brow. Ordinary tyranny, oppression, excessive
taxation, these bear hghtly on the happiness of the mass of
the community compared with fraudulent currencies, and the
robberies committed by a depreciated paper. Our own
history has recorded for our instruction enough and more than
enough of the demoralizing tendency, the Injustice, and the
intolerable oppression, on the virtuous and well disposed, of
a degraded paper currency, authorized by law, or in any
way countenanced by government."
That an aristocracy having in its hands such sources of
revenue, and able to wring from the people so large a portion
of their honest earnings would push its advantages to the
utmost, is to be expected, indeed, it is inevitable. Never
did they relinquish their hold upon the spoils voluntarily.
The power to do wrong becomes a vested right in the view
of him who has long possessed it. Those who understand
perfectly well the nature of " the robberies committed by a
depreciated paper," will be loudest in their indignation at any
attempt to resist or put an end to those robberies.
A great crime, a national crime, has been committed, and
is still persisted in — the crime of cheating the laboring classes
by the delusion of paper money — fertihzing tlie rich man's
field by the sweat of the poor man's brow. Who then are
guilty of this heinous crime ; for the innocent must not sliare
the shame ; who are the guilty ?

41
Not every stockholder of a bank, not every officer of a
bank, not every borrower from a bank, not every trader, or
capitalist, who has profited by the fluctuations caused by a
paper currency. Oh no! We should do them great injustice
if we set down all these as our enemies, when araong them
are many of our best friends — friends who are ready to ¦wit
ness their sincerity by cheerfully submitting to great sacrifices
to restore a wholesome currency. The system is riveted
upon us. It has insinuated Itself into all business intercourse,
so that no business man can keep clear of it, any more than
he could keep clear of cold, if he had been born in the
frigid zone, or of heat on the sands of the great desert, for
paper money is all pervading as the atmosphere. We might
as well proscribe every man who takes a bank bill, as every
man who owns a bank share, or assists in managing a bank,
for it is the bill holders, ultimately, who produce the fluctua
tions : if they refused to receive paper it could not be issued.
There are thousands, tens of thousands, who abhor irredeem
able paper, and will go as far as any raan to suppress the mis
chief, but who cannot, so long as bad legislation forces it upon
them, disentangle themselves from the system, without
neglecting duties they are bound to discharge, and abandoning
the station in which Providence has placed them. A sober
man raay disapprove of war, and of all preparation for war,
yet if the government has estabUshed a powder magazine in
the heart of his village. It is better that he should keep it than
a drunkard or a lunatic. In the debate on the charter of the
United States Bank, John Randolph said, that he owned no
stock whatever, except live stock, and b=d determined never
to own any : but if this bill pass^^J, he would not only be a
stockholder to the utmost of Ws power, but would advise every
man, over whom he had any influence, to do the same, because
it was the creation of a great privileged order of the most
hateful kind to his feehngs, and because he would rather be
the master than the slave. Without going quite this length
6

42

with Mr. Randolph, many feel justified in defending them
selves with the same weapons with which they are attacked,
though anxious to prohibit the use of those weapons to all.
These are on our side, and we must not make war upon
them, for without their assistance we shall never be able to
reduce the trade in money to an equal footing with all other
trades. To whom then does the guilt belong, for it must
fall somewhere .''
To those who fastened the system on us, who uphold and
defend it, who oppose aU efforts to abolish it or mitigate its
evils, who are determined to perpetuate it, with all its most
grievous abuses. To all who sustain it by their votes in the
National, or State Legislatures. To aU who vote for the
bank candidate for President of the United States ; the bank
candidates for Congress ; the bank candidate for Governor
of the Commonwealth ; paper money partizans for State
Senators and Representatives. Among these are thousands
who own no bank stock, and who groan under the curses they
invite. If they kneel for the rider to mount, who can pity
them when they feel the spurs .''
Who have fastened the system upon us .' Clearly those
who profit by it, the aristocratic, or whig party, so called be
cause they somewhat reserable the party in Great Britain thus
described in the Edinburgh Review, " THE STRENGTH
OF THE WHIGS LAY IN THE GREAT ARIS
TOCRACY, IN THE CORPORATIONS, AND IN
THE TRADING OR MONIED INTERESTS." —
Look at their course in Massachusetts. In the spring session
of eighteen hundred ^d thirty-five there were many petitions
for new banks. Some few ^vliig presidents and directors of
banks opposed petitions asking fov a share in their monopoly ;
but the majority of the whig party voted to grant them. The
whole democratic party opposed them, as did many nominal
whigs, with democratic consciences, from among the yeo
manry, and they were defeated. AU the support they received

came from whigs, the most ardent opposition they encountered
was from democrats. If one fourth part of the democrats in
the Legislature had supported them, they would all have
passed, and a nuraerous litter of banks would that year have
cursed the State.
In the fall session of the same year, an order discharging
the comraittee on banks, and most other committees, and con
fining the action of the House to the Revised Statutes, was
reported by a democrat, raost violently and repeatedly
assailed by prominent whigs, sustained by the reporter, and
the whole democratic party, in five distinct and most
animated debates, and with the aid of votes from the semi-
whig farmers, carried and adhered to. Had that order been
rescinded the door would have been opened for all the bank
petitions of the former session.
In eighteen hundred thirty-six, petitions came in asking, in
the aggregate, for an Increase of the bank capital of the State
from thirty millions to fifty-six millions, and the bank capital
of Boston and its immediate vicinity from eighteen millions
to double that amount. The whig leaders, the Suffolk
delegation, and a large majority of the whig raerabers, went
for the petitions. The deraocrats went in mass, against
them. The semi-whig farmers discriminated and passed bills
for about ten miUions, rejecting the petitions for the other
sixteen miUions.
Of all the rejected petitions the most formidable was that
for the ten million bank. The whole ai-istocracy of the city
and country enhsted to carry it through. They commanded
the unanimous vote of the representatives from Suffolk
county, and all the thorough going whig partizans. The
language of Mr. Burke, with very httle alteration, describes
the contest and result.* The debate lasted in the House,
with intervals, for weeks. It opened the eyes of several to
* Speech on American taxation, 19th of April, 1774.

the true state of affairs ; it enlarged their ideas ; it removed
prejudices ; it harmonized opinions. At its conclusion the
House, by an independent, noble, spirited, and unexpected
majority, in the teeth of all the old mercenary Swiss of State,
in despite of all the speculators and augurs of political events,
in defiance of the whole embattled legion of party hacks and
willing instruments rejected the bill. That majority was not
afraid to look steadily in the face that glaring and dazzling in
fluence at which the eyes of eagles have blenched. They look
ed in the face one of the ablest, and not the most scrupulous
combinations ever formed in this State, and which embodied
the whole power of wealth. Every sort of intrigue, artifice,
and negotiation was] carrying on. Persuasion and argument,
conviviality and intimidation were exhausted. Every thing
on every side was full of traps and mines. It was in the
midst of this chaos of plots and counterplots ; it was in the
midst of this complicated warfare against public opposition
and private treachery, that the firmness of the democratic
party was put to the proof. They never stirred from their
ground, no not an inch. They remained fixed and deter
mined in principle, in measure and in conduct. They prac
ticed no managements. They secured no retreat.
If one of our majority had gone over to tlie enemy we
should have been defeated, yet the weakest in our phalanx
withstood the onset with alacrity and confidence. Every one
of them raight have said truly in Mr. Burke's words, " I
declare for one, I knew well enough (it could not be con-
¦cealed frora any body) the true state of things ; but, in my
life, I never came with so much spirits into the House. It
was a time for a man to act in. We had powerful enemies ;
but we had faithful and determined friends, and a glorious
cause. We had a great battle to fight ; but we had the
means of fighting ; our arms were not tied behmd us. We
did fight that day and conquer."
From that victory the democracy of Massachusetts received

45

new life and vigor. We came into the Legislature of the
present year recruited in numbers, and with renovated
strength. Again bank petitions swarmed as before. Again
the whole weight of whig influence was thrown into their
scale. Again a large majority of whigs went for the petitions,
but a few nominal whigs had the independence to vote with
the democratic party, and again the petitions were rejected.
We shall go into the next legislature stronger than ever.
We shall charter no more Tianks ; but we shall ascertain how
many members of that body will agree with John Quincy
Adams, that "the violation of raoral principle, committed by
a bank in suspending specie payments, is not inferior to that
of fraudulent bankruptcy in an individual. The right of any
legislature to authorize such a suspension is questionable, and
the repeal of laws expressly enacted to enforce the fulfillment
of contracts, at the very moment when they have been
broken, is a mockery of all moral principle, and a scandal to
human, legislation. "
The aristocracy has lately come before the country more
distinctly than ever as the bank party. The coalition evi
dently intend to fight over again the battle for a National
Bank in which they were defeated in eighteen hundred and
thirty-two. They cannot at this moment agree upon the
precise plan of the institution they would establish, and the
difficulty of determining the details may cause some delay m
bringing forward their project ; but the hope of a National
Bank is their only bond of union. The whigs profess that
the revolution of 1688, from which they derive their name,
"was a revolution in favor of property." They believe that
"it is the part of wisdom to found government on property."
They "avow their belief that in a great majority of cases,
the possession of p'roperty is the proof of merit." They
hope to become much more meritorious, if the government
can be founded on their property, by creating a National Bank,

46

and investing it with controlling power : for . this result they
would effect a revolution.
The merchants doing a moderate business would be
crushed and ground into the dust beneath the wheels of this
ponderous engine, as so raany thousands of their predecessors
have been, yet raany of them are still ready to cast them
selves before the car of Juggernaut, at the bidding of their
political priesthood, and perish for the glory of the money
king. They are as much incensed against the government
which has delivered them frora their oppressor, as the Hindoos
are with the governraent of India for its efforts to suppress
the Thugs.
" It is Impossible to conceal from ourselves that we are at this
moment on the brink of a dreadful precipice ; the question is
whether we shall submit to be guided by the hand which hath
driven us to it, or whether we shall follow the patriot voice
which has not ceased to warn us of our dangers, and which
would still declare the way to safety and to honor."* Did the
administration advise the rechartering of the United States
Bank by Pennsylvania .'' Did the administration advise that
the nuraber of banks, the amount of bank capital, of loans, and
of paper circulation should be raore than doubled, nay, almost
trebled, within six years .'' Did the administration urge the
banks to issue raore notes than they could redeem ; the
merchants to import more than they could pay for ; and to
supply the retailers with more goods than they could dispose
of .' Did it instigate thousands of young men to abandon the
cultivation of the soil and throng to the great cities, to erabark
in the lottery of trade .'' Did it run up the prices of articles
of coraraerce .'' Did it encourage speculators to invest
imraense amounts in fancy stocks, in products, house lots,
and public lands .'' Did it recommend the distribution
bUl, to withdraw, in four payments, near forty millions from
the channels of commerce .'' These ai-e tlie causes of our
* Junius.

47

distress, and against these It has never failed to reraonstrate ;
it has not ceased to warn us of our dangers. The bank party
have driven us towards the precipice, over which they would
now compel us to plunge. The administration has labored
faithfully lo avert impending evils. The bank veto was
intended to put an end to that great disturbing power over the
currency, which has made its successive expansions and con
tractions so sudden and terrible. The removal ofthe deposits
parallzed the destructive energy with which the bank was then
waging war on credit and industry, and prepared the corarau
nily for the redemption of its notes and the collection of its
debts by that institution, if it had been disposed to acquiesce
in the decision of the nation. The specie circular checked
the frauds, speculations, and monopohes in the public lands ;
checked the excessive bank credits in the West ; checked
also the overbanking and overtrading of the Atlantic cities
frora which it retained specie ; secured the safety of the
treasury receipts ; strengthened the western banks, and thereby
lessened the losses of the raerchants on the sea board by
their inland debtors ; and by retarding the exportation of
gold and silver to England, made the resumption of specie
payments possible, whenever the honest indignation of the
people shall compel the banks to the performance of their
promises. The suppression of small bills, so repeatedly and
urgently recommended by the administration, and adopted in
several of the democratic States, strongly tends to discourage
the ruinous extension of bank Issues and bank credits. Mr.
Huskisson, in his speech of February tenth, eighteen hun
dred and twenty-six, said, that, "it was his opinion, an
opinion not hastily formed, but the result of long and anxious
observation, that a permanent state of cash payments, and a
circulation of one and two pound notes, could not co-exist."
Our late experience has abundantly confirmed Mr. Hus-
kisson's opinion. If we had had no bank notes under fifty

48

dollars, the late stoppage of specie payments would never
have taken place. The collection of the government dues
in specie is not only necessary to enable the government to
go on, but is the only course which could prevent the sudden
withdrawal of protection from our manufactures, to an
amount greater than that which the whigs of the Massachusetts
legislature resolved would be "THE DEATH WAR
RANT OF THE MANUFACTURING ESTAB
LISHMENTS OF NEW ENGLAND." It is the only
course which could prevent great inequality in the duties
levied at different ports, and the consequent transfer of
business to those points where the currency had depreciated
most, to the ruin of our own merchants. It is the only
course which could keep specie in the country, so as to
give us a chance of the return of a sound currency without
running through the miseries of assignats and continental
paper. As the wisdom of whiggery lately threatened insur
rection because the government would not usurp the arbitrary
power to dispense with the laws and violate the constitution,
for the sake of thus ruining our merchants, signing the death
warrant of our raanufacturing establishments, and fastening
upon us the curse of irredeemable paper, it may be well to
remember the sentiments of the whig oracle upon tlie same
question years ago. In 1816, Mr. Webster spoke wisely
thus: " There is no nation which had guarded its currency
with greater care ; for the framers of the Constitution, and
those who enacted the early statutes wei-e hard money men.
They had felt, and therefore duly appreciated, the evils of a
paper medium. They therefore sedulously guarded the
currency of the United States from debasement. The legal
currency of the United States was gold and silver coin,"
" This government has a right, in all cases, to protect its
own revenues, and to guard them against defalcation by bad
or depreciated' paper. "

49
" The only power which the general government possesses
of restraining the issues of the State Banks, is to refuse their
notes in the receipts of the treasury."
"With a perfectly sound legal currency, the National
Revenues are not collected in this currency, but in paper of
various sorts, and various degrees of value. * * *
Not being, however, a part of the legal money of the country,
it could not, by law, be received In the payment of duties,
taxes or other debts to government." But being payable,
and paid, on demand, it had been received, &c.
During the war the banks issued immense quantities of
paper. "The consequence immediately followed, which it
would be imputing a great degree of blindness both to the
government and to the banks to suggest that they had not
foreseen. The excess of paper' which was found every
where created alarm. Demands began to be made on the
banks, and they all stopped payment. No contrivance to get
money without inconvenience to the people, ever had a
shorter course of experiment, or a more unequivocal termi
nation. The depreciation of bank notes was the necessary
consequence of a neglect or refusal on the part of those who
issued to pay them."
" The depreciation has not been and is not now uniform
throughout the United States. Taxes and duties coUected
in Massachusetts are one quarter higher than the taxes and
duties collected by the same laws in the District of Colum
bia." "Can a greater injustice than this be conceived.' Can
Constitutional provisions be disregarded in a more essential
point .' Commercial preferences also are given, which, if they
could be continued, would be sufficient to annihilate the
commerce of some cities, and some States, while they would
extremely promote that of others. # # # *
Surely this is not to be endured. Such monstrous inequality
and injustice are not to be tolerated. Since the commence-
7

50
ment of this course of things, it can be shown, that the
people of the northern States have paid a million of dollars
more than their just proportion of the pubhc burdens."
Because the Executive refused to be guilty of this "mon
strous inequality and injustice," "sufficient to annihilate the
commerce of some cities (Boston) and some States"
(Massachusetts) the late representative from Boston declared
in a meeting of those dependent on the commerce of Massa
chusetts, that no people under heaven were ever before so
trampled upon by their government. Let us see how Mr.
Webster regarded this trampling.
"If Congress were to pass forty statutes on the subject,"
said the oracle, in 1816, "they could not make the law more
imperative than it now is that nothing should be received in
payment of duties to the government but specie. The whole
strength of the government, I ara of opinion, should be put
forth to compel the payment of the duties and taxes to the
government in the legal currency of the country."
The "expounder of the Constitution," called the receipt
of the biUs of non specie paying banks, " a state of things
which every body knows to exist IN PLAIN VIOLA
TION OF THE CONSTITUTION, and in open defiance
of the written letter of the law."
"It is quite clear, that by the statute all duties and taxes
are required to be paid in the legal money of the United
States, or in treasury notes."'
"Wars and invasions are not always the most certain
destroyers of National prosperity. They announce their own
approach, and the general security is preserved by the general
alarm. Not so with the evils of a debased coin, a depreciated
paper currency, or a depressed and falling pubhc credit. Not
so with the plausible and insidious mischiefs of a paper
money system. They insinuate themselves in the shape of
facilities, accommodation, and relief. They hold out the
most faUacious hope of an easy payment of debts, and a

61
lighter burden of taxation. On these subjects it is that
government ought to exercise its own peculiar wisdom and
caution. It is bound to foresee the evil before every man
feels it, and to take all necessary measures to guard against it,
although they may be measures attended with some difficulty,
and not without temporary inconvenience."
"I repeat the opinion, that it was the duty and in the
power of the Secretary of the Treasury, on the return of
peace, to have returned to the legal and proper mode of
collecting the revenue. * * # Jt can hardly
be doubted that the influence of the treasury could have
effected aU this."
"As to the opinion advanced by some — that the revenues
cannot be collected otherwise than as they are now, in the
paper of any and every banking association which chooses to
issue paper, it cannot for a moment be admitted. This
would be at once giving up the government ; for what is
government without revenue, and what is a revenue that is
gathered together in the varying, fluctuating, discredited,
depreciated, and still faUing promissory notes of two or three
hundred distinct, and as to this government, irresponsible
banking companies .' If it cannot collect its revenues in a
better manner than this, it must cease to be a government."
"If taxes be not necessary, they should not be laid. If
laid, they ought to be collected without preference or partial
ity." Mr. Webster continued to a very late date to express
similar opinions, though his conduct, in the view of many,
forms a singular contrast to them. At New York on the
fifteenth of March last, he said : "I abhor paper ; that is to
say, irredeemable paper, paper that may not be converted
into gold or silver at the wiU of the holder." And again :
"I hold this disturbance of the measure of value, and the
means of payment, and exchange, this derangement, and if I
may so say, this violation of the currency to be one of the

52
most unpardonable of political faults. He who tampers with
the currency robs labor of its bread. He panders indeed to
greedy capital, which is keen sighted, and raay shift for itself;
but he beggars labor, which is honest, unsuspecting, and too
busy with the present to calculate on the future. The pros
perity of the working class lives, moves, and has its being in
established credit, and a steady medium of payment. All
sudden changes destroy it. Honest industry never comes
in for any part of the spoils in that scramble which takes
place when the currency of a country is disordered. Did
wild schemes and projects ever benefit the industrious .'' Did
irredeemable bank paper ever enrich the laborious .'' Did
violent fluctuations ever do good to him, who depends on his
daily labor for his daily bread .'' Certainly never. All these
things may gratify greediness for sudden gain, or the rashness
of daring speculation ; but they can bring nothing but injury
and distress to the homes of patient industry and honest
labor. Who are they that profit by the present state of
things .' They are not the many but the few. They are
speculators, brokers, dealers in money, and lenders of money
at exorbitant interest. Small capitalists are crushed, they
have no longer either money or credit. And all classes of
labor partake and must partake in the same calamity."
On another occasion he described that "miserable, abom
inable, and fraudulent policy which attempts to give value to
any paper of any bank one single moment longer than such
paper is redeemable, on demand, in gold and silver." He
asserted that such paper "represents nothing but broken
promises, bad faith, bankrupt corporations, cheated creditors,
and a ruined people."
WhUe such professions were yet ringing in the ears of the
American people, it was hardly to be expected that the
expounder wpuld second the insurrectionary movements of
his friends in Boston, New York, and other cities. Indeed,
fodo bim justice, he has too rauch sagacity to suppose that

53

the yeomanry of the country would commit treason for the
privilege of being cheated with paper money. Accordingly,
in his late speech at Cincinnati, he stated exphcitly that the
administration, under existing circumstances, could take no
other course than to exact specie. The city rebels, there
fore, disavowed by their leader, and having had time to
meditate on the course and fate of Shay's rebelhon, have
thrown down their weapons, and disbanded. They no
longer talk of forcible resistance, but they still rail at the
Bank veto, the removal of the deposits, and the specie cir
cular, and oppose the suppression of small biUs ; while they
justify the suspension of specie payments by the banks, and
advocate a National Bank. The remark of Fisher Ames, in
1787 is not out of date at the present time :
"In spite of National beggary, paper money has still its
advocates, and probably of late, its martyrs. In spite of
National dishonor, the continental impost is still opposed with
success. Never did experience more completely demon
strate the iniquity of the one, and the necessity of the other.
But in defiance of demonstration, knaves will continue to
proselyte fools, and to keep a paper money faction alive.
The fear of their success has annihilated credit, as their
actual success would annihilate property."
A National Bank cures none of the evils of paper money
banking, but enhances therh all. It increases all the expenses
of the system, for the great bank, being on a more magnifi
cent scale than any other, sets an example of extravagance to
all the. rest which by degrees they follow. It vastly increases
the fluctuations, of the currency, for the smaller institutions
bank upon its paper as they otherwise would upon specie ;
and as this paper is much more easily obtained than specie,
while the Bank is expanding, it makes the general expansion
more rapid ; and as it is more suddenly withdrawn than specie,
when the great bank contracts, it makes the general contrac-

64
tion more sudden. If the State banks issued paper on a
specie basis, the fluctuations of the paper currency would
StiU be a great evil, but how much greater must be the
fluctuation, when the basis itself is an elastic medium, which
expands when it ought to contract, and contracts when it
ought to expand. It of course increases the depreciation,
which must be greater in proportion as the whole amount of
paper out exceeds the specie.
That such an institution fosters more than any other the
spirit of speculation is too evident to need proof. The
larger the bank, the more enormous will be the speculations
it occasions, and these enormous speculations, deranging
prices, will engender innumerable smaller operations of a
sirallar character. AprU 9th, 1832, the loans of the mother
bank, at Philadelphia, made that day, were :

In one loan over

$400,000

$417,766

4 loans not less than

200,000

995,456

Q cc cc cc cc

100,000

341,729

ig cc cc cc cc

50,000

1,274,882

172 " " " "

20,000

2,404,278

$5,434,111
leaving less than a tenth part this amount, $529,974 only, to
be divided in sums less than twenty thousand dollars, among
all the rest of the community. The speculations into which
men launch with such facilities, terminate in bankruptcies of
a proportionate magnitude.
A National bank is the great parent of forgery. Small
banks having a local circulation, their bills are less extensively
counterfeited, because the chance of detection is greater the
fraud sooner becomes impossible, the field to operate in is
not so wide. From 1797 to 1819, the prosecutions for
counterfeit notes of the Bank of England were nine hundred
and ninety-eight ; the convictions were eight hundred and
forty-three, of which three hundred and thirteen were capital.

56
The counterfeit notes detected at the bank alone, during six
years and three months of that time, were
107,238 one pound notes,
17,787 two " "
5,826 five " "
419 ten " "
64 twenty " "
35 above twenty pounds.
If more than twenty thousand a year are detected at the bank,
how shall we estimate the numbers detected elsewhere .''
The verdict of history is decisive against national banks.
The Royal Bank of France was one of the most flattering
and fatal delusions. Never was a financier raore popular
than John Law, its founder. Never was a country raore
prosperous than France seeraed before that bubble burst. An
eminent French writer of that time called the projector, "a
minister far above all that the past age has known, that the
present can conceive, or that the future will believe." All
France was seized with a rage for speculation. " All the
world," says Postlethwalte, " ran to Paris." There were
half a million of new comers in the city. Twelve hundred
new coaches were set up. As fast as new blocks and streets
could be built up, lodgings could not be had. The reaction
shook the social fabric to its base. Gloom and despair were
inraates with every household. Four hundred thousand
fortunes had been sacrificed, and the State loaded itself with
a specie debt of sixteen hundred and thirty-one miUlons of
livres. The amount of ifs paper in circulation at the time of
the crash was four hundred and nineteen miUions of doUars, not
so much beyond our own paper circulation, in proportion to
the population, as the terms In which this bank is usually
described would naturally imply, while the specie thrown into
the bank in March and AprU 1 720 exceeded fifty-six millions
of dollars, an accession of hard money such as our banks
never received, in so short a time. John Law died at Ve-

56

nice, in 1729, never relinquishing for a moment the firmest
conviction of the solidity of his system, the disastrous failure
of which he attributed entirely to the malice of his enemies ;
and thousands of his disciples entertained the sarae belief for
many years.
The present bank of France was established in 1803 ; and
though, issuing no small notes, its circulation is comparatively
steady, yet it has twice produced considerable distress ; in
1806, when it occasioned numerous failures, and again in
1814, when it became so embarrassed that the government
were obliged to limit its specie payments.
But the Bank of England is the model of American
bankers. Its history is fuU of instruction and warning. In
1693, in the midst of national disasters both the people and
the ministry were weary of the war, which produced nothing
but disgrace, but which William was obstinately bent upon
continuing. He therefore brought in a whig ministry, whom
he expected to find tractable, partly from the ambition of
being courted by the crown, and partly from the prospect of
gain from advancing money to the government. The most
scandalous practices in the mystery of corruption were at that
time exercised in grants, places, pensions, and salaries to
members, whereby the House of Comraons was so managed
that the king could quash all grievances, stifle the examina
tion of accounts, and defeat any biU. When these practices
were exposed, mere shame forced through both houses a bill
for free and impartial proceedings in parhament, to which biU,
the king, with the concurrence of his whig ministry, to whose
existence corruption was essential, applied his veto. Cor
ruption being thus perpetuated, a majority was secured in
both houses, and the scheme of the Bank brought forward,
and the charter granted in 1694. Its whole capital was a
loan to the government ; its immediate object was to assist
the government in cai-rying on an unpopular war. Its ulti
mate effects were distinctly foretold by the opposition, but the
power of corruption prevailed.

57
In about one year from the date of the charter, the usual
effects of paper money had begun to be seriously felt. " The
nation was alarmed by the circulation of fictitious wealth, in
stead of gold and silver." Money sunk, till a guinea passed
for thirty shillings, and this public disgrace lowered the credit
of the government. In 1696, such was the languishing state
of the Bank, then two years old, that the government, instead
of being supported by it, was compelled to support it. Its
notes were twenty per cent, below par ; and to rescue it from
impending bankruptcy, new subscriptions were ordered,
payable four fifths in governraent tallies, and the taxes were
mortgaged for the redemption of the taUies. The charter
was prolonged, and a monopoly vested in it ; the government
became responsible for the redemption of its bills ; it was
totally exempted from taxation, and several other valuable
privileges conferred upon it. Thus was it snatched from the
jaws of destruction, but instead of sustaining the government,
it had very nearly overwhelmed the government in its own
ruin. To support the credit of the government through
these difficulties the taxes were raised imraensely beyond
all former precedent, the land tax being twenty per cent, on
the rental. These enormous taxes proving insufficient, pro
vision was made for raising about seven millions of doUars by
a lottery, and for an additional issue of Exchequer biUs.
Smollett, a tory historian, thus comments on the Bank, the
lottery, and the paper money. "One cannot, without aston
ishment, reflect upon the prodigious efforts that were made
upon this occasion, or consider without indignation the
enormous fortunes that were raised up by usurers and extor
tioners, from the distresses of their country. The experi
ment of mortgaging funds succeeded so well that later
ministers have proceeded in the same system, imposing burden
upon burden, as if they thought the sinews of the nation
could never be over strained." HaUam, the ablest of whig
8

58
historians, and the friend and apologist of the Bank, thus
confirms the account of the prevailing distress of that time.
"Fresh schemes of finance were devised, and on the whole,
patiently borne by a jaded people. The Bank of England
rose under the auspices of the whig party, and materially
relieved the imraediate exigences of the governraent, while it
palliated the general distress, by discounting bills and lending
money at an easier rate of interest. Yet its notes were
depreciated twenty per cent, in exchange for silver ; and
Exchequer tallies at least twice as much, till they were funded
at an interest of eight per cent. But these resources gene
rally falling very short of calculation, and being anticipated
at such an exhorbltant discount, a constantly increasing
deficiency arose ; and public credit sunk so low, that about
the year 1696 it was hardly possible to pay the fleet and
army, from month to month, and a total bankruptcy seemed
near at hand. Certainly the vessel of our Commonwealth
has never been so close to shipwreck as in this period ; we
have seen the storm raging in stUl greater terror round our
heads, but with far stouter planks and tougher cables to
confront and ride through it." In a note he adds that the
peace of Ryswick was absolutely necessary, "because public
credit in England was almost annihilated, and it was hardly
possible to pay the army. The extreme distress for money
is forcibly displayed in some of the king's letters to Lord
Shrewsbury. These were in 1696, the very nadir of
Enghsh prosperity. " In one of those letters July 20th, 1696
the king says, "at present, I see no resource which can
prevent the army frora mutiny or total desertion." Since
the publication of the Shrewsbury letters there can be no
doubt but that the inglorious peace of Ryswick was precipita
ted by the derangement of the currency.
Like causes produce like effects. In 1819, our bank of
the United States had been two years in operation, and it

59

had brought us to the nadir, the lowest point of depression,
of our prosperity. It came even nearer to bankruptcy than
the Bank of England. The Treasury department had to
prop it up, and it mortgaged the government funds in its
hands. The new Bank has had less than two years enjoy
ment of its new charter, "SAFER, STRONGER, AND
MORE PROSPEROUS THAN IT EVER WAS,"
said Mr. Biddle, yet it has brought us down to the nadir, or
very near it, again ; and not having the treasury to lean upon
for support, except as to the seven or eight miUions of dollars
it withholds, it has now committed bankruptcy.
As the troubles of the year 1696 have been in part attrib
uted to the change of the metaUic currency, by calling in all
clipped and worn money, and substituting coin of full value,
it may be interesting to know how prices were affected by
the Bank of England in longer periods of its existence, for
which no temporary cause can be applied. To ascertain
this, we take the article of wheat, both because the prices
are well known, and because the cheapness of bread is more
essential to the comfort and to the subsistence of the people,
than that of any other article.
It appears that for seven years before 1693, the price of
wheat at Oxford averaged twenty-eight shillings eleven pence,
while, for the next seven years it averaged fifty-two shiUings
and four pence, an advance of eighty-one per cent. If the
alteration of the metallic currency had produced any effect,
substituting coin of fuU weight for the clipped, the price of
wheat would have faUen, instead of rising. Nor was this a
war price, for in 1697 came the peace of Ryswick, and the
price was much higher for that and the next two years of
peace, than for the three previous years of war. The issues
of bank notes raised the price ; but after the currency had
adjusted itself to the business of the country by the paper
driving out an equal quantity of coin, prices fell again, and

60
continued for about sixty years to average a little more than
thirty shiUings a quarter, but when smaller notes were issued,
they rose again.
In the great expansion of bank issues which foUowed the
suspension of specie payments the price rose in proportion
as the notes increased. For ten years before 1796 the
average price of wheat at Oxford was fifty-one shUlings, four
and a half pence. The run upon the Bank took place in
1797 and that year and the next the price was falling. But
for the next ten years after 1798 it averaged eighty-two
shillings and five pence ; and in the next ten years, from
1809 to 1818, it averaged one hundred and seven shUUngs
and seven pence being considerably more than double the
average before specie payments were suspended, and indeed
an advance of more than one hundred and nine per cent.
In the year 1817, when the circulation ofthe Bank of
England was at the highest point, being thirty miUions of
pounds sterling, instead of eleven millions as it had been
before the suspension of specie payments, the average price
of wheat was one hundred and twenty-four shillings, or more
than four times what it was before the bank commenced its
operations. From the year 1797 to 1817, the metalUc currency of the
world had slightly diminished, while the business to be trans
acted had greatly increased ; prices ought therefore to have
fallen, instead of rising. Improvements in Agriculture had
more than kept pace with the increase of population ; for this
reason also the prices of wheat should have fallen. War no
doubt raises the price, but the war was raging in 1794 and
1795 when the price was under fifty shiUings ; and the
country was at peace in 1817 when the price was one
hundred and twenty-four shiUings. Corn laws go but little
way to account for the fluctuations, they must be mainly
owing to bank paper.

57

10

77
5
106
—
116
2
124

61
Compare the circulation of the bank, and the price of
wheat for a few years, and see whether you can doubt that
they are cause and effect. The circulation of bank notes
in 1787 was JE8,688,570 wheat was 49s. 9d.
1790 " 10,217,360
1795 " 13,539,160
1805 " 18,397,880
1810 " 21,000,000
1817 " 30,099,908
After Parliament had determined in 1819 that the bank
should resume specie payment, it began to diminish its circu
lation, which was brought down to jE18,000,000, a less sum,
in proportion to the business done, than the circulation of
1795. Accordingly wheat fell, and for ten years after 1819
it averaged seventy shillings. As thirty millions are to
eighteen millions, so are one hundred and twenty-four shillings
to seventy-four shiUings : so that wheat feU more than bank
notes diminished, the Increased business to be done giving a
higher value to money.
" The average money price of corn regulates more or less
that of all other commodities," says Adam Smith; we may
judge then what universal distress this bank produced by
raising prices. We are not left to conjecture the effects,
they are matter of record. The years 1812 and 1817 are
the two years in which wheat reached the highest price it
had borne for nearly six centuries, since the great famine of
the year 1270. These were two years when the taxes were
comparatively light, particularly 1817. In 1815, for instance,
the taxes were £79,948,670, while in 1812, they were
£70,435,679, and in 1817, they were only £55,836,257.
The distress which existed then was produced by the high
price of wheat, in spite of lighter taxation. Yet Mr. Hus
kisson singled out these two years, as those in which the
pressure was most severe. These were his words: "If
62
distress bordering upon famine, if misery bursting forth in
insurrection, and all the other symptoms of wretchedness,
discontent, and difficulty, are to be taken as symptoms of
pressure upon the people; then I should say, that 1812 and
1817 were two years, of which no good raan can ever wish
to witness the like again."*
Thus has this institution taken the bread out of the mouths
of the poor, literally and fatally. In Barton's poor law
tables the connection is shown between the high price of
wheat and the Increase of mortality. In seven manufacturing
districts in England, when wheat was 118s. 3d. there were
55,965 deaths in a year : three years later, when wheat had
faUen to 60s. Id. there were but 44,794 deaths in the same
districts. An extensive comparison between prices and
mortality demonstrates the fact, that nothing tends more to
prolong the average duration of life, than the cheapness of
good wholesome bread. Indeed proof of this truth is before
us all, in the extraordinary longevity of the inhabitants of
the agricultural villages of New England.
Sin and Death are nearly related. What has been the
effect of the Bank of England on crime .'' The year 1817
was that in which the amount of Bank notes was greatest,
and that year is as distinguished in the annals of the criminal
law as in the history of the Bank. In the year 1S17, the
number of criminal prosecutions suddenly rose from about
8000, to about 14000 ; the nmnber of persons condemned to
death, from 890 to 1302; of persons transported to New
HoUand, from 1054 to 1734. Want of employment, pov
erty, and hunger, all springing from high prices, and the
deranged currency, caused these additional crimes. In June
1823, after the resumption of specie payments, Sir Robert
Peel made the following statements to parliament. In 1817,
seven out of nine of the manufacturing class were unem-
*Speech on Mr. Western's raotion, June 11, 1822.

63
ployed; in 1823, none. In Sheffield, the poor rates in
1820 were £36,000 ; in 1823, only £13,000. In 1817 there
were 1600 houses empty ; in 1823 none. In Birmingham,
in 1817, of 84,000 inhabitants, 27,500 received aid from
the poor fund ; a third part of the workmen had no occupa
tion ; the remainder were only half employed ; the poor
rates amounted to about £60,000. In 1823, all the work
men were employed ; the poor rates amounted to only
£20,000. The weekly pay of weavers, which in 1817
had sunk to three shillings and three pence, now rose to ten,
and sometimes sixteen shiUings. The exports had increased,
and disturbances ceased.
The mode in which paper money fluctuation, such as the
Bank of England begets, grinds the independent poor into
pauperism has been fully explained already. British pauper
ism Is the offspring of the Bank. There were not two
hundred thousand paupers. In England and Wales, when the
Bank begun to grind: in 1810 there were twelve hundred
thousand, and the Bank ground harder, after that. The poor
rates were but small in the time of King WiUiam, but in
1827 they were about thirty-eight mlUions of dollars.
The madman who scatters firebrands, arrows, and death,
and says am I not in sport, is innocent and lovely compared
with the monster that inflicts these miseries on the British
people. It sucks the blood from their veins, the marrow
from their bones : it makes them bond slaves, and mocks at
their unpaid toU, tiU exhausted nature sinks into an early
grave. It is such an Incarnation of active, aU pervading,
unremitted cruelty, that our mushroom whig nobility worship ;
that they desire to see enthroned over us ; and upon whose
altar they are ready to sacrifice the properties, morals, lives,
and liberties of American citizens.
The Bank of England has generally had no actual capital,
no not a farthing, for the purposes of trade. Its loans and

64
advances to the government have, during almost the whole of
its existence, exceeded its whole capital ; so that it wrings
from the people, by the machinery of paper money, the
whole of that immense wealth, on which its stockholders
fatten ; and through which it has sometimes been, to use the
expression of one of its friends, "strong enough to take the
government on its shoulders." In such precarious strength
there is inherent weakness ; and the bank is more likely, ul
timately, to bury the government in its ruins, as it threatened
to do in 1696, and again in 1797. With the Bank, begun
the funding system : hand in hand with the Bank, dependent
on it, and growing out of it, the funding system has advanced.
Like the Siamese twins, they have one common breath of
life; separate them, and they perish. "The practice of
funding," says Adam Smith, "has gradually enfeebled every
State which has adopted it." He instances the Italian Re
publics, Genoa, Venice, Spain, France, and the United
Provinces, and adds, "Is it likely that in Great Britain alone,
a practice, which has brought either weakness or desolation
into every other country, should prove altogether innocent .¦"'
Since Smith wrote this (in 1776) that explosion has taken
place in France, which made aU nations quake with fear, — an
explosion, which would never have happened, but for the
practice of funding : the British debt is quadrupled : is the
practice of funding less likely now to bring desolation upon
Great Britain .''
The United States had one fair experiment of paper
money at the outset of their national existence. An eye
witness, Mr. Pelatiah Webster speaks thus, first of its sup
posed advantages, and afterwards of its real evils. " Though
men of aU descriptions stood trembUng before this monster
of force, without daring to lift a hand against it, during all
this period (from 1776 to 1781) yet its unrestrained energy
always proved ineffectual to its purposes, but in every case
increased the evils it was designed to remedy, and destroyed

65
the benefits it was intended to promote : at best its utmost
effect was like that of water sprinkled on a blacksmith's
forge, which indeed, deadens the flame for a moraent, but
never fails to increase the heat and flame of the internal fire.
Many thousand families of fuU and easy fortune, were ruined
by these fatal measures, and lie in ruins to this day, without
the least benefit to the country, or to the great and noble
cause in which we were then engaged." He enumerates the
sufferings incident to the war, the exorbitant price of foreign
goods, the extreme scarcity of many necessary articles, such
as salt, the total cessation of many trades for want of raate
rials, the seizure of goods, wagons, stock, grain, cattle,
timber, and every thing else which was wanted for the public
service, the captures, ravages, and depredations, the burnings,
and plunders of the enemy, which were very terrible and
expensive. " They had possession, first or last, in the
course of the war, of eleven of the capitals of the thirteen
States, pervaded the country in every part, and left dreadful
tracks of their marches behind : burning in cool blood a
great number, not only of houses, barns, mills, &c., but also
of most capital towns and viUages." Yet all these evUs he
testifies were less than those of continental money. "We
have suffered more from this cause" he says, "than from
every other cause of calamity : it has klUed more men,
pervaded and corrupted the choicest Interests of our country
more, and done more injustice than even the arms, and
artifices of our enemies." " WhUe we rejoice in the riches
and strength of our country, we have reason to lament with
tears of the deepest regret, the most pernicious shifts of
property which the irregularities of our finances Introduced,
and the many thousands of fortunes which were ruined by it ;
the generous, patriotic spirits suffered the injury ; the idle and
avaricious derived the benefit from the confusion." This was
written at the very period of the dissolution of the continental
currency system, while the people were yet smarting under its

66

torments, the remembrance of which had so much power over
the fathers of our constitution, that they deliberately and
sternly REFUSED TO INCORPORATE IN THAT
INSTRUMENT, ANY LICENSE TO THE FEDE
RAL GOVERNMENT TO CREATE ANY COR
PORATION, LEST UNDER SUCH A LICENSE
THEY MIGHT CHARTER A NATIONAL BANK.
It is natural to imagine that government paper which
depreciates suddenly, and then becomes worthless, is an evil
much more terrible than a National Bank with its ever fluctu
ating currency. Not so. A sword cut, or a gun shot
wound, however appalling, yet if it heals or kills, is less to
be dreaded, than to be stretched daily on the rack for years,
to perish in the torture at last. Law's Bank and Mississippi
Scheme, the South Sea Bubble, Assignats, and Continental
Money, marked their course with wide destruction, but they
had their end. The victims who survived recovered, others
filled the places of the fallen, and a new career of prosperity
commenced ; but when will England shake off the Incubus of
her National Bank .' A paper money explosion, even like
the most awful on record, is far less to be deprecated than
the perpetual wrong, injury, and tyranny of a perpetually
fluctuating paper currency ; even as the fire that sweeps the
prairie, but leaves the soU rich for a fresh vegetation, is less
fatal than the eternal curse of barrenness on Sodom and
Gomorrah. Nothing can prevent a mixed currency partly of paper,
from becoming superabundant, and consequently depreciating.
Nothing can prevent such a mixed currency from fluctuating
and the larger the proportion of paper, the greater will be
the fluctuations.
A National Bank, or any other banks, issuing small bills
unrestrictedly, must sooner or later stop specie payment : its
paper then becomes irredeemable paper, which even the whig
oracle abhors. This result is not accidental, it is certain and

67
necessary: it is the Inherent vice ofthe system. During the
last forty years, the Bank of England has refused payment
in specie twenty-six years, and the Banks of the United
States generally have violated their obligations twice. The
first suspension was brought to an end by totally breaking
up a large proportion of those institutions. How the present
bankruptcy wiU terminate, we do not know.
I say nothing of the Government Banks on the Continent
of Europe, such as the banks of Petersburgh, Copenhagen,
Vienna &c., because the friends of a National Bank among
us have nothing to say for these. They admit them all to be
miserable failures. Their only favorite model is the Bank of
England, which has issued irredeemable paper about half of
the time since the United States had a Banking system. " A
bank not to pay specie," said Mr. CaUiounin 1816, "would
be an instrument of deception ; it would have no character
or feature of a bank. He should regard It with disgust and
abhorrence." Such a bank is the great bank in Pennsylva
nia, and such are the lesser banks. Small bills and specie
payments, for any length of years, are Incompatible. Let
banks issuing smaU biUs set out with what professions they
may, to this complexion they raust come at last : sooner or
later, they wiU be banks not to pay specie.
No art, wisdom, or power of man can prevent irredeemable
paper from depreciation. The promise of gold, however
slightly doubtful, is worth less than gold Itself ; but nothing can
make a promise known to be false, equal to a promise behev
ed to be true. The severest penal laws could not prevent
guineas from seUing at twenty-eight, and even thirty shillings,
in bank notes, while the Bank of England violated its promises.
Congress passed an act of outlawry (January 11, 1776) and
other threatening declarations, against those who refused con-
tinental bills at par : this did not keep them at par. Danton
and Robespierre undertook to sustain the value of the
assignats, the revolutionary money of France. First, they

68
decreed a long imprisonment to those who should take, pass,
or offer assignats below their nominal value ; then, they
fixed a price on all the necessaries of life, and punished with
death those who, having such articles for sale, refused to sell
them at the legal price In assignats : but the terrors of the
dungeon and the guiUotlne proved insufficient, though unspar
ingly employed, to give value to a worthless paper. The
fear of death, then, cannot check the depreciation of irre
deemable paper.
If we sum up in one grand total aU the woes to which
paper money banking, and the over-extended system of credit
growing out of it, have given birth, we shall pronounce it to
be the most tremendous of the plagues which the Almighty
in his wrath has suffered to afflict degenerate men. Neither
war, nor pestilence, nor famine, ever, for so long a time,
spread desolation over so large a portion of the earth. What
now paralizes the energies of Great Britain .'' Her A'ational
Debt, which originated with the Bank, grew with its growth
and strengthened with its strength, is a part of the same system,
and without its aid could never have swelled to the coUossal
dimensions in which it overshadows the empire. When the
bank commenced, the debt was about five miUions of doUars.
The object of the creation of the bank was to Increase the
debt, which it manages for the government, and which is now
about four thousand miUions of dollars ; the sinews of the
poor, from generation to generation, being mortgaged to pay
the interest. The burthens and taxes, which I enumerated
in speaking of the banks of JNIassachusetts, are but a drop
from that fountain of bitterness, the preposterous extension
of a fictitious credit, which has deluged the world witli mise
ries. View the Bank and the funding system together, in
their combined operation, and see what the abuse of credit
through fictitious paper, has done for mankind. What enabled
Great Britain to carry on wars ruinous to her own interests,
destructive of her own liberties, and fatal to the welfare of

69
the human race, for one half the period from the accession
of King WUliam to the downfaU of Napoleon ? Paper credit ;
whereby the ministry of the day could not only exhaust the
resources of the nation, but beggar posterity, building up that
National Debt which is the most stupendous phenomenon of
modern times ; perhaps, in the world's whole history. Not
Napoleon in his march on Moscow, with that carnival of
horrors, the retreat, gave so many corpses to the wolves and
vultures, as paper credit. Neither Alarlc, nor Attilla, nor
any other scourge of God, ever struck down so many heads,
or glutted his revenge with so vast a havoc, or left behind
him such wide spread devastation.
If France, in 1789, had had no debt, France raight have
been free and happy, without a bloody revolution, and the long
years of succeeding agony. Who stimulated and kept alive
the wars that grew out of the French Revolution, wherein
three mlUions of human lives were sacrificed .' England.
How did she sustain those wars .'' By her paper credit. It
was paper credit that held out through twenty-three years of
carnage, and at last conquered at Waterloo. It is a stock
corporation, existing by credit, and operating through credit,
that has "sold every monarch, prince, and State, in India,
broken every contract, and ruined every prince, and every
State who had trusted them,*" that has bestrewn that whole
Empire with the bones of slaughtered miUions, turning their
temples into charnel houses, and making their Eden a Golgo
tha. It was paper credit that waged war eight years upon
the hberties, and rising Independence of America. It is
paper credit that rivets the fetters of Ireland, and tightens the
ligatures which check the circulation of the British Empire's
hfe blood.
Napoleon Bonaparte is said to have predicted, at St. Helena,
that the next general convulsion of Europe would be a con-
* Edmund Burlce.

70

flagration of paper credit. When that catastrophe befals the
insolvent governments of the old world, when the National
Debt of England, " incurred one half in pulling down the
Bourbons, and the other half in setting them up," explodes,
and blows up with it the bank, the East India Company, and
the Government, while the debts of the Continent topple
down with the shock, wiU not the contest over the wreck be
fiercer than the memorable reign of terror, in proportion as
greater interests are at stake, and greater numbers Implicated ?
It seems that elements exist to form a crisis as much more
terrible than the last, as the battle of Devils conceived by
the genius of Milton exceeds in sublimity the ordinary con
flicts of men.
It is time to return frora these speculations to our own pecu
liar perils. "Let the Americans, "said WiUiam Pitt, "adopt
their funding system, and go into their Banking Institutions,
and their boasted Independence will be a mere phantom."
Could William Pitt have foreseen, that in about sixty years
from our Independence, we should have eight hundred and
twenty-three banks, whose loans would exceed five hundred
and ninety millions of dollars .'' Could he have foreseen that
these banks would issue their bills to the amount of one
hundred and eighty-five mlUions, and then, in May 1837,
stop payment, and continue to flood the country with irre
deemable paper .'' Could he have foreseen that a British
banking house (the Barings) would in their circulars describe,
truly describe, the contest between the Banks and their
privileges on the one hand, and the People and their liberties
on the other, as a contest between the Aristocracy of wealth,
and the Democracy of numbers ; and that in this contest, an
institution modelled after the Bank of England, and largely
owned by British stockholders, would lead the Bank interest ;
while the Democracy of numbers would sustain the Govern
ment, and the Constitution of their country .'' Could he

71
have foreseen that raerchants, having a deep stake in the
preservation of order, would threaten rather to rebel, than
pay their dues to the governraent, while they could find plenty
of specie to export to England ; and that the governraent
would be called on, in every form of entreaty and menace, to
allow the whole basis of oVir circulation to be withdrawn from
us, and to flow frora the West to the Atlantic cities, and
thence across the ocean, leaving our banks, and our people,
to certain ruin, in order that the Bank of England might not
be compeUed to suspend specie payments .'' Could he have
foreseen that for the benefit of England a new doctrine would
be advanced in America, that "the truth is the Banks of the
United States are always the STRONGEST when they
hold the LEAST SPECIE, and the country always the
RICHEST when it has the LEAST GOLD AND
SILVER ?" If he foresaw all this, no wonder he anticipa
ted that Banks would one day reduce our boasted Indepen
dence to a mere phantom.
His forebodings will not, however, be realized. Our
goverment is a popular government. With us, the will of
the people is sovereign, and it is not the will of the people to
barter their birthright for a mess of pottage. Though they
believed all the promises of advantage which Banks hold
out, promises which the history of other nations, and the
experience of their own, have shown to be delusive, yet
Liberty and Independence are blessings too dear to them to
be weighed In the balance with wealth. What shaU it profit
a man if he gain the whole world, and lose his own soul .-'
The slaves of filthy lucre, who prize it above Liberty, must
have sold themselves, body and soul, into the service of the
God of their idolatry ; but the American people chng to
their soul's freedom.
To deliver us from thraldom to the Banks, a sound curren
cy is indispensible. There are in the world more than four
thousand millions of doUars worth of gold and silver, coined

72
and uncoined, taken together. Of this, we want sixty
miUions only, in addition to what we now have, to give us a
currency as soUd as that of France, which is nine tenths
specie. A tenth of our exports would pay for it in six
years. If we wiU it, we shall have it. It must be had-
The war against abhorred paper must go on, tiU Liberty is
triumphant. What though the monster we assaU towers in portentous
proportions, and frowns upon us with a fearful aspect .'' It is
but an unholy image of Mammon. Its presence defiles the
Temple of Liberty, whence its fragments shall soon be cast
out, for its discordant materials are shattered and tumbhng.
Its impudent forehead is of brass, and its base feet of clay,
its hollow carcass stuffed with worthless rags, by whose
expansion it bursts asunder, like the Babylonish dragon, un
der whose table those that knew the privy doors entered con
tinually, and devoured the expenses of an Erapire.
Let the ban dogs of faction howl : fangless now, their
malice is impotent. A great people is conscious of its
rights and power. Calmly majestic, it gathers its strength,
and rises to overturn, smite, and demolish, whatever the
spirit of our institutions cannot tolerate. Rashness shaU not
rule the hour, nor an avenging fury confound innocence with
guilt ; but the inflexible determination of virtuous wisdom
shall carry on reform, till her warfare be utterly accomplished.
Then, when the proud bearing of paper feudahty is humbled,
the hoarse throat of anarchy silenced, and popular sover
eignty sways over all the sceptre of equal justice, then may
we exult in the security, eternal, as far as human foresight
reaches, of American Liberty, Union, and Independence.

YALE UNIVERSITY LIBRARY

3 9002 03456 3412

¦ -¦SV-

4-(. V

> 'J,

V 4. '^ .^

>^ t«, ' :*^'^..

M; JJ *"- V. \, \ ,
•i
'V '.--^