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while I agree with these gentlemen in all these abstract positions, although anxious to follow an opening so auspicious and undeniably correct, I am unable to agree with them in their applications or their conclusions. Nay, sir, despite my utmost exertions, I cannot fill up the gap between the correct premises and false inferences. But for the peculiar circumstances, the question of “the power to remove the deposites” never would have been raised. But it was essential for the party to have some rallying point for their clamor, and, like boys, who scream round a branch that they have thrust into a wandering swarm of bees, to alarm them into settling on it, did the leaders hope that their party would cluster about this question they had started. . The right to remove the deposites so clearly existed, that argument is entirely unnecessary to establish it. Whether it should have existed is another question. But that it did exist, the gentlemen admit even in their denials—and the absurdity of this part of their tactics appears from the very mode in which the attack is made. At one moment, the illegality of the removal of the deposites rests upon the quo animo with which the President removed Mr. Duane—anon, upon his intent in appointing Mr. Taney an instant after, because the President was (say they) advised to it by a “kitchen cabinet”—then because it was announced in a newspaper; and, 1st, because it was officially announced, and, 2d, because it was not officially announced. Like a will-o'-the-wisp, it flits to and fro.over the marsh, settling on each projecting tuft just long enough to show the deceitful footing beneath and the darkness around. The gen. tleman [Mr. McDUFF1 E] should leave such attacks to his light troops. He may amuse his audience, but will never benefit himself by struggling powerfully and hopelessly through the mist and mire of false reasoning. But, sir, the power to remove the deposites is one thing, and the expediency of removing them is another. Its consequences are twined closely with the present question. Unable to charter a new bank until 1837, it seemed impossible to escape the embarrassment and suf. sering threatened by the closing of the present bank, except by perpetuating it. Had we chosen to request the directors to accept a modified recharter, we might, during the period of suffering, have been humble petitioners at its doors, begging it to make a bargain with us, by which its own powers would be restricted. What would have been the language of the bank, with the whole treasury in its vaults, the State banks holding their existence at its will, and the pecuniary concerns of the country in its gripe? How would it have answered the congressional petitioners? Recent events show what it would have been? They would have unhesitatingly rejected the charter which limited their powers and profits, and demanded all or nothing. Had we refused, its vast and unchecked power would have swept over the country like a tornado, and the public treasure would have been the weapon for manacling public opinion. * Perhaps in the contest the universal necessities might have urged us to grant all the demands of the bank, and thus rivet upon us a slavery from which a revolution could alone have freed us. But the removal of the deposites, while it took from the bank a large portion of its power to do evil, by the disposition which was made of it, relieved the State banks from the vassalage in which they had been held, and enabled them to supply, in a great degree, the place of the United States Bank, both as a Government agent, and as a mercantile convenience. But for this measure, the storm would have been as destructive in its results as it has been wicked and wanton in its causes. The disappointed factions which conspired with the bank to produce it, may thank God that the consumma
tion of their fiendish purpose was prevented by this measure. It has snatched them from the common ruin in which they were about recklessly to involve the country. But for that measure, and their anticipated victory would have been the ruined fortunes of an indignant people, and their fancied immortality, infamy. Permit me to recur to the past to explain the present. The gentlemen on the other side will unhesitatingly acknowledge the authority from which I quote. March 2, 1811, honorable Mr. Clay, of Kentucky, made a report on a memorial asking for a recharter of the then existing United States Bank; the paragraph I shall quote is the last and the principal one: “Your committee are happy to say that they learn, from a satisfactory source, that the apprehensions which were indulged as to the distress resulting from a non-renewal of the charter, are far from being realized in Philadelphia, to which their information has been confined. It was long since obvious that the vacuum in the circulation of the country, which was to be produced by the withdrawal of the paper of the Bank of the United States, would be filled by paper issuing from other banks. This operation is now actually going on; the paper of the Bank of the United States is rapidly returning and that of other banks is taking its place. The ability to enlarge their accommodations is proportionately enhanced; and when it shall be farther increased by a removal into their vaults of the deposites which are in the possession of the Bank of the United States, the injurious effects of the dissolution of the corporation will be found to consist in an accelerated disclosure of the actual condition of those who have been supported by the credit of others, but whose insolvent or tottering situation, known to the bank, has been concealed from the public at large.”—Bank History, p. 448. How exactly descriptive of the present position of our affairs! How clearly it points out the course to be pursued to avoid, or at least diminish, similar evils! Suppose a stranger to the present party divisions was to be made acquainted with the politics of 1811 and of 1834, and was to be told that the person who made this report still occupied a distinguished place in the arena of politics, would he not at once say that he must have been the adviser, certainly the warm and able supporter, of the measures which he had so clearly and earnestly set forth; and would not the stranger suppose him delighted to observe the good effects which these measures produced? What would be his astonishment, if told that the author of this report, with all his personal adherents, were the violent and most bitter and uncharitable opponents of the very course advised in the report; that they “gloated in ecstasy” over the misery which an opposite (their own) policy had produced, and turned away disappointed and disgusted from the return of peace and plenty so accurately described in the paragraph I have read? I shall not enlarge on this; perhaps my remarks have already unconsciously savored of bitterness. There needs none in this instance. It is its own severest comment. The removal of the deposites has conferred great positive advantages, as well as prevented distressing evils. A system has been established that renders the Government and - the community independent of the United States Bank. That it will operate as rápidly, or as conveniently, I do not believe; but that it operates at all, is a great point gained, that relieves us from the danger which menaced us, and gives us time to examine carefully and decide impartially, upon the plans proposed. Before discussing these plans it is necessary to determine the standard by which they are to be measured. If we create a bank to regulate the State banks and supply us with a paper currency, be it so. Let the supporters of it avow this as their object, and we can examine the constitution to ascertain whether we have the power to cre
Just 24, 1834.] The Deposite Bill. [H. of R.
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ate such a bank. If the object be to furnish banking ac- | implied in the grant of a substantive power, which is not commodations to the merchants, let this be avowed, and an essential auxiliary to the exercise of that power. we can search for the authority to create a bank for their Even if it be deemed essential, there is the further condiespecial convenience. If the object be to obtain a conve-|tion that there must be nothing in its purpose or tendency nient mode of effecting exchanges, or transfers of money, at variance with the general tenor of the constitution. or of its shadowy partner, credit, from one place to As a necessary consequence, if any institution be deemanother without cost, let it be avowed; and when we dis-ed essential to the exercise of any power or the performcover this power to incorporate a company to transport, ance of any duty, it should be endowed with such, and almost free of cost, the capital and produce of the ...loy such, powers and privileges as will enable it to effect chants, I shall ask for a similar provision for the transport- that specific purpose; and if it appear that any of the powation of the implements of labor and the produce of the sers conferred are in their tendencies inconsistent with farmers. In principle there is not much difference be: the constitution, they should be at once withdrawn. tween the two, although habitual association has separated | If improvements in political science, or any other them widely. " | causes, should enable the Government to exercise the No one would risk his reputation by asserting that powers and perform the duties without the aid of these either of these objects was of itself an object which, un-institutions, it would be the duty of the Government to der the constitution, would justify the incorporation. But dispense with them. If several auxiliary agents are proits supporters have artfully mingled them together, and |posed as means of exercising a certain substantive power, covered the violation of the constitution by the arguments that one should be chosen which effects the purpose with of short-sighted expediency. the smallest amount of power and privilege. I should be From the first and last objects mentioned, inferences governed by precisely the same principles in creating an have been drawn in favor of its constitutionality. The pow- office. All the power essential to perform the duty, and er to regulate the currency makes a fraction of the char- all emolument necessary to procure an officer competent ter constitutional. A strange mode of regulating! We to discharge the duty, I would freely grant, but not an charter a company that creates a currency, and, so far iota of superfluity. from regulating it, we give the power (one of the most If we examine the several plans by these rules, we find important that the Government can exercise) to this com- the present bank clothed with powers, not merely essenpany, unconditionally, for twenty or thirty years. We |tial to perform the duties of Government agent, but with have the right to regulate commerce, and on the same such as have made it the antagonist of the Government, principle we should charter a commercial company, with and the arbiter of our commercial prosperity. Sir, this important and profitable privileges, that it might first cre- vast power, incautiously granted at a period of great ate, and, by its monopoly, indirectly regulate commerce. distress, is now urged as a reason of its recharter. So far from rendering even a fraction of the charter con- So much has been said, and so much will be said, of this stitutional, it leaves the whole with a power too vast to be institution; the proofs against it are so numerous, so well delegated, even had we the right to dispose of it. known, and so decisive; and the final verdict of condemIt it said by others that a bank must be created to fur- nation so universal, that I need not weary you by discussnish, not only a uniform currency, but a moderate rate ing it. All agree in the necessity of restrictions, except of exchange, in order that the constitutional direction the ultra redemptionless friends of the bank; and if a may be observed, that “duties, imposts, and excises, bank is to be established, the only difficulty among the may be uniform throughout the United States.” Those sincere supporters of the measure will be as to the nawho present this argument should remember that specie |ture and extent of these restrictions. is the only money known to the laws, and all that laws The duties required of it by the Government are, that can do is to require that the same amount in specie shall it should receive, keep, and transmit the revenue. It be every where paid. This was the only uniformity con- must of necessity receive deposites, and buy and sell bills templated; any other would be impracticable. If food is of exchange. As it would not at all interfere with the assumed as the standard, you will find specie worth more duties of the bank to the Government, individuals might at Cincinnati than at New York; if labor is assumed, you deposite money, receive bills of exchange, and do busihave a directly opposite result; and if the proposition be iness with the bank on the same terms as the Government. true, it would, of course, be the duty to modify imposts, For the safe-keeping of these deposites, and for their trans&c. accordingly. In other words, admit the argument to portation, or for the bill of exchange, which is equivabe good, and it becomes our duty either to order by law lent to it, the Government and the individuals should pay that the prices of all articles shall be the same throughout a fair compensation to the bank. . This is actually done by the United States, or to vary the amount of duties, &c. giving to the bank the use of the deposites, and by the with the incessant fluctuations of relative values. the payment of premiums on bills of exchange. But the Although, as I have already said, I am in favor of a Government, instead of paying for these and other acts of
United States Bank, it may well be supposed that I do not
agency, in money, pays it by the grant of additional powers
and privileges, which are converted by the bank into fruitful sources of profit and influence.
It is true that the greater portion of these powers and privileges are ordinarily granted to every bank; and so intimately have they become associated as to be deemed essential the one to the other.
A bank, in its simplest state, is merely an agent which engages to keep safely the moneys deposited, issuing to the depositor a certificate of the deposite, on the present. ation of which the money is restored. Even in this stage, a species of currency is supplied by the transfer or assignment of this certificate. It is soon found that the bank is the most convenient resort for the transaction of business between those who wish to borrow and those who are able to lend. The bank becomes the common agent, and is soon induced, by the opportunities of loaning, to obtain a capital of its own, and actually loan it at
interest, receiving instead the notes of the borrowers. The circulation of the certificates, and the long time elapsing between their issue and their return upon the bank, suggests the idea of loaning fictitious certificates of deposite, receiving the notes of the borrowers as money. This business has no limit, save in the necessity which the bank is under to preserve the appearance of solvency, lest its certificates should depreciate. As the operations extend, certificates of deposite in banks, or with bankers at a distance, are received in payment of debts, &c. As these obligations are mutual, though not coincident, the bank becomes the agent of the exchanges, and finding it profitable, draws, and permits to be drawn, bills of exchange on its own credit, when more convenient than the purchase of bills actually held by others. The organization of the bank is now complete. The only difference between that whose growth has been sketched, and the present bank, is that, instead of certificates of deposite, the present banks give their own notes in exchange for the notes of borrowers. As the discounts are thus made a mere traffic of the credit of individuals, for the more current credit of the bank, there is no limit to it, except the one already mentioned. These may be termed the components necessary to constitute a bank. The other duties, powers, and privileges, depend upon the laws which create them. The mere incorporation gives them a high degree of credit, which may be called their moral capital, that raises them at once above competition, and enables them to serve or to injure the community in which they are located. The temptations to excess, addressing themselves to the covetousness and the ambition of the directors, are often too powerful for their sense of right and duty. The greater the amount of credit, in every department of business, the greater the profits, the greater the influence of the bank, and the greater the number of persons interested in upholding it. The present bank has, unfortunately, well understood and skilfully applied these truths. In any institution to be now created, I should jealously refrain from enabling it to follow the pernicious example. The guards must be in the charter; checks upon its operation, however plausible, must ever be ineffectual. The extension of business is always made under the luring guise of accommodating the public, and no occasional check could restrain it. Of all the propositions for a bank, that will receive my support, as I have already said, which performs the duties required of it by the Government, with the smallest amount of power and privilege. We would not, by law, directly operate upon the persons or property of our fellow-citizens; yet, we would heedlessly create an institution that influences the first and controls the last. I would not consent to so great an inconsistency. I would curtail its capital and measure out every immunity with scrupulous care. I should hesitate to grant it a charter unchangeable for a certain period. I doubt the power of one Congress to bind succeeding Congresses by an agreement with a creature of its own making. But, in this instance, I should be especially doubtful. The constitu. tion gives us the right to regulate the currency, fix the value of coins, &c. By creating a United States Bank, as proposed, we throw this power into its hands, to the deprivation of succeeding Congresses. Can we do this! Desirous as I am for a United States Bank, I should wish its charter to be subject to such modifications as the people, through their representatives, might from time to time think necessary. Nor would I sell this power for a bonus. I would not yield the right to relieve the people for a paltry pittance to the Government, although I would willingly vote for an equitable distribution among the States of the surplus profits, beyond a rate fixed by law. A bank thus restricted, which the power of the people could reach, liable to such amendments as expe
rience might show to be necessary, could not and dare not tamper with the interests of the community. But, sir, this bank could not go into operation for two or three years. Meanwhile, that our legislative action upon it should produce any good effect, requires the sincere and active co-operation of the present bank. But, sir, every one in and out of this House knows that “war, war to the knife,” against all who will not fight under its standard, is the positive determination. It has set us and our Secretary, President and committee, at defiance; and however much we may pity and regret the madness, we cannot humor it by yielding the country to its sway. The hope which I (in common, I believe, with very many members of this House) entertained, that the friends of the bank would eventually aid us frankly and zealously in seeking a remedy for the present, and a safeguard for the future, is past. I hoped that a strong sense of public duty, that sympathy for their constituents, would induce them to turn from the unworthy employment of deceiving their constituents as, to the causes of their embarrassments, to their responsible and appropriate duties as legislators. This course on their part would have done much to turn aside the strong current of public indignation, which is now rising and will soon set irresistibly against those who created public calamity for selfish political purposes, and attempted to abuse the public mind with repeated and excited statements of wrong causes. But, sir, the motives and the destinies of these ultra devotees of the bank will be judged of and decided by their own constituents. Had I thought a little while ago that their devotion would be so unrelenting, I should have regretted it far more than I do now. The change which has taken place—so well described in the quotation I have read; the improvement in the money market; the improved and gradually improving condition of business; and, more than all, the return of confidence and calmness—render their co-operation less essential than I then deemed it. Meanwhile, the temporary expedient adopted by the Secretary of the Treasury has weathered the storm, and in doing it has given the best proof of its practical stability. I say frankly, Mr. Speaker, that when the plan was first developed, serious objections presented themselves to my mind. My experience had been such as to render me ex. ceedingly distrustful of State banks. Under good management, which limit their business to the wants of the community, they may unquestionably be made instruments of much usefulness. But I have seen them, by adventurous dealings, create a false prosperity, which crushed in its fall the well-earned properties of the honest and industrious. Feeling all this as an event of yesterday, I was unwil. ling to advocate any measure which would place in their power the pecuniary interests of the country, stimulate their business beyond the proper limit, or band them together under executive influence. Even if the first objections had been obviated, the last was fully sufficient to guide me in forming an opinion. The same reasons that would prevent me from supporting a bank with large powers, would induce me to oppose any arrangement which would bind the State banks together, and subject them to a common influence. I would not assist in cutoff the Hydra's head, that twenty might spring from the wound. At the first glance, this seemed to me the necessary result of the system. But the bill reported by the Committee of Ways and Means, and now under consideration, obviates this objection. It places the banks out of the reach of executive control—responsible to Congress— and merely requires that they should perform the duties of safely keeping and properly transmitting the public moneys. All the duties that we would create a bank to perform are performed by these State banks, and the
incur no responsibility, and have no more connexion wit
June 24, 1834.] The Deposite Bill. [H. of R. the Government, or with each other, than is essential to the the result could be condensed in a syllogism, or stated in performance of these duties. an equation, the conclusion would be infallible. But
So far as our legislation is concerned, it is precisely as moral influences,in their countless varieties, admit no such if a United States Bank had been proposed, which should easy estimates or abridgments; and he who relies on hav. merely receive the public deposites, and, by domestic bills jing mastered them, will often discover that his mathematof exchange, distribute them, as required by the Govern-jical truths are moral absurdities. ment. Was it practicable to have such a United States|. In examining credit, the first point presented is, the Bank, without the addition of any powers or immunities, lenders and borrowers. every one who pretends to regard the constitution would The thing lent is uninvested value, which the lenders be bound to support it. No objection could be raised to think it more profitable to loan to the borrowers than to the powers, either by reference to the constitution or to keep it in their own hands. the consequences of exercising them. The proposed bill. The inducements to the lenders are– is identical with this in principle, and experience has 1st. The supposed certainty or security that the loan shown it to be practicable. will be repaid.
I wish I could discern its operation upon our commer- 2d. The interest to be paid for its use. cial interests, (mentioned in the two first objections,) as The security" or certainty consists in the ability of the clearly as I perceive its constitutionality. I have thought | borrower to fulfil his engagements. The case of a loan for many years that some controlling power was necessary on endorsement is no exception; the endorsement is to check excessive issues of credit by the local banks. merely a certificate of this ability, for the truth of which Our credit system, resting upon the narrow basis of our the endorser is responsible. In the extreme case, when small metallic currency, and supported alone by public the endorsement is thought to constitute the sole secuconfidence, fluctuates with every cause that affects it—|rity, the loan is in effect first made to the endorser, and whether that cause be the excessive issue of fictitious by him handed over to the borrower. notes, by ill-conducted banks, or the excessive issue of . The actual ability of the borrower comprises the folfictitious alarms, by heated partisans in Congress. Tollowing items: these evils no adequate remedy has ever been applied. 1st. His property when the loan is asked. The United States Bank has served indirectly as a fly-| 2d. His opportunity of investing profitably his labor wheel to moderate these fluctuations, although it has been and capital, both owned and borrowed. by gathering to itself the power to produce at any mo- These may be termed his “accidental capital.” ment fluctuations far more disastrous. One of these we 3d. His physical ability, including health, strength, and have just experienced. But under the organization which mechanical skill. I hoped to have seen adopted, this would not probably 4th. His intellectual capacity, including industry, have been intentionally repeated. Yet, however perfect judgment, talents, education, and professional skill. may have been the organization, the evils could only have 5th. His moral character, the indispensable requisite been palliated. They are inseparable from the system. which ensures the preservation of his capital from waste Until the proportion of specie to the paper currency is by expensive habits, and guaranties the punctual and greatly changed, we cannot be exempt from occasional honest fulfilment of his engagements.
and sometimes ruinous fluctuations. The three last may be termed his personal worth, or Our credit system is a great good converted by excess “personal capital,” although the fifth item deserves a into an alarming evil. separate place, by the name of “moral capital.” It may
Mr. Speaker, I will take the present moment to notice be possessed by all, and the young farmer and mechanic the amendment presented by the honorable gentleman may rely on it with perfect certainty for the attainment, from Illinois, [Mr. DUNcAN,) which is, in fact, a rechar- with proper exertions, of fortune and reputation. It is the ter of the present United States Bank; in which there is basis of confidence between individuals, and the aggregate much to approve, and more to condemn. To its adoption of these individual “moral capitals” is the “moral capital” I have insuperable objections. of the community—the basis of public confidence. First. Should Congress present such a recharter to that] These components are combined in very different proaudacious institution, it would be spurned from the bank | portions in different individuals. One of them, (1st,) as impudent on the part of the Government. property, may be entirely wanting, but all the others Second. I would never serve or court that institution) must be possessed in a greater or less degree, and their while she stands in contempt of the House, the people, sum is the ability of the borrower or the actual security the nation; setting the laws and the constitution at defi-} to the lender. A deficiency in any one of these compoance. Let her open her doors, her books, her vaults, to nents diminishes this security, which is one of the inducethe inspection of our committee; then, and not till then, ments to the lender, and renders it necessary to increase will it become the representatives of the people to accept the other inducement, the interest to be paid for its use. or offer terms to the bank. The better the lender knows the borrower the nearer To the amendment offered by the honorable gentleman will the supposed security approach the actual security, from virginia, [Mr. Gonnox,] and the proposition of the and the interestasked, to the interest which should be paid. honorable and eloquent gentleman from Pennsylvania, Assuming the aggregate of personal capitals such as [Mr. Coultra,] I have an objection equally conclusive to to render loans liable to no, extraordinary risk; the inmy mind. They propose that the treasury of the nation vestment of capital in loans will be regulated by the same shall be kept by the Treasurer and his agents, until laws that govern ordinary investments. disbursed. This proposition adopted, and millions of . The lenders will not loan their capital at less profit than the money of the people, from the time of collection they can obtain at the same risk and with the same trouto the period of disbursement, would be drawn from cir-ble by investing it in any other way; allowing for the great. culation, and rest as useless as if out of existence. This er or less facility with which the investment may be discould but produce fluctuations, and periodical ruin and engaged and converted into money. distress. The average profit upon capital fixes, therefore, the In reading an ingenious pamphlet, by a gentleman of lowest rate of interest that the lenders will receive, and Philadelphia, aiming to prove that paper notes were bet- they will obtain as much more as they can get. ter than metallic coin, I could not help noticing the inap-l. The interest actually paid depends upon the relation plicability of the reasoning used in the exact sciences to between the supply, of capital for loans to the demand political subjects. If all the causes which operate upon for them. When these are equivalent, the average in
terest actually paid will coincide with the lowest rate of interest just mentioned. The lowest class of borrowers will be those whose profits, derived from their accidental, their personal, and their borrowed capital, are barely sufficient to pay the interest and to subsist themselves. If, as is usual, the supply is less than the demand, the lenders can exact a higher interest. The lowest class just named cannot pay the increased rate, and, of necessity, thus cease to be borrowers. The next higher class in the scale of profits take their place with profits diminished in like manner to a bare subsistence. The additional rate of interest occasions other less profitable investments to be disengaged into capital for loans. This increased supply diminishes somewhat the rate of interest, enlarges the lowest class of borrowers, and brings about an equilibrium between the profits of these and other investments, raising somewhat the general average. Similar changes are caused by every increase of the disproportion. The same remarks apply to every individual case. Circumstances of position or necessity may limit the supply available to the borrower, and the lender may therefore exact the highest rate, leaving to the borrower only as much of the profits as will subsist him. These may vary from the general average of interest as well as those which are made under the spur of some especial necessity, in which the usurious rate is only limited by the satiated covetousness of the lender, or the extreme ability of the borrower. This analysis exhibits the true sources of credit which enables one man to borrow the value which may be held by another. In every country containing intelligent, industrious, and honest citizens, these sources of credit exist. That they should be available, there must be two other requisites: First, that the country should afford opportunities for the profitable employment of the capital borrowed; and, second, that there should be capital to loan. This capital consists of value accumulated in the country by labor, or accumulated by labor elsewhere and brought thither. This value should be easily transferable, and universally receivable. It should also retain permanently the worth assigned to it when loaned, that the borrower might, if possible, return to the lender the identical value loaned. The metallic coins fulfil all these conditions, and they constitute the transferable capital actually accumulated by labor. Any fluctuation in the value of this transferable capital will occasion embarrassment and loss, as the borrowers will, in the one case, have to repay more, and the lenders, in the other case, to receive less, than in right bound to do. A country possessing a metallic courrency will not be liable to any extrinsic fluctuations, except such as may arise from material changes in the relative prices of the mass of its staple products, compared with those of the countries with which it is connected by commerce; and these fluctuations will be slower and slighter as the metallic currency is greater in amount, the staple products more numerous, various, and valuable, and foreign and domestic commerce more rapid and extensive. The sum of the accidental and personal capitals of individuals to the national capital, and the transferable capital or currency, coming in contact with every species of property, diffuses among the whole an impulse upon any part, and diminishing it as it spreads it into an average effect upon all. This currency, or transferable capital, should perform two important offices: 1st. Serving as the means of estimating and exchanging all other values. 2d. As the medium for correcting and preventing the
the Deposite bill.
fluctuations arising from sudden changes of relative value.
[June 24, 1834.
It is evident that the agent for performing these offices must be in itself uniform, permanent, and sufficiently plentiful and widely diffused, to reach every kind of property. If such a currency exist, and co-existent a credit system, resting on a well-ascertained basis of “accidental,” and, especially, “personal” capital, public confidence cannot be destroyed, unless some great national calamity annihilates existing capital. Even if, in a particular district, such causeless distrust should exist, the metallic currency, unaffected itself, would furnish the means of checking it at once, perhaps, in some instances, at slight sacrifices by individual debtors. The credit system, in itself is, as I have already said, a great good, when resting upon the basis of accidental and particularly personal capital, and supported by a uniform and permanent currency. In this country we have every element that I have mentioned, in a high degree; personal capitals in a higher degree than in any other country; and we are only deficient in a permanent and uniform currency. Our banks have coined credit into transferable capital. An adventurous and beardless nephew of a bank director, with no “personal capital,” obtains a loan of “bank credit,” in the shape of notes “of promise to pay,” and gives them his own note instead. The farmer who sells his corn and pork to this youngster, and receives these “bank credits” in exchange, little thinks that the eventual means for redeeming these notes are really the note of the young man placed in the bank—a note for which the farmer would not give him an armful of husks. But all this would be corrected by clear-sighted self-interest, if the means of doing it were supplied. It is not so much the excess of credits as it is the want of the metallic basis, which would limit while it supported it. It is worse than nonsense to talk of diminishing credits. They will always, in an enterprising country like this, be kept to the highest point to which the borrowers can carry them. Create a bank in every village, and you will find persons eager to borrow every cent, and with personal capital as security. But these banks, limited in the real value at their disposal, are unlimited in the fictitious values, the bank notes—their own credits, far beyond the proper ratio to their means, these they can issue to any extent that a gambling calculation of chances may permit. Here is the evil, and its consequences are obvious and disastrous. The first effect is to drive away their rival, metallic currency, and evidences of credit receivable elsewhere. These are taken away, because they will pass abroad. The bank notes will pass only at home, and therefore they will stay at home. A paper currency is immediately created, as unstable as the varying opinions of men. A bank which will throw into circulation a large quantity of these bills, and, from the public confidence in its notes, or other causes, can maintain them in circulation, has the control of the currency, and necessarily, in a degree, of the commerce of the country. This the United States Bank has done, and has made most wicked use of the power. It is what the State banks did from a fancied necessity, during the war, and from eagerness of gain at a later period. But the remedy is not to diminish the number of banks; those remaining will issue more, to supply the vacuum left by their notes. Let the banks be as numerous as the leaves on the trees, if they are called for; they are useful agents—especially our State banks—between the capitalists and the honest and industrious men whose only wealth is their “personal capital.” No, the remedy must reach the currency itself, and not the credits founded on it. Make the currency good, and the credits will be good. As I have said already, the only permanent benefit is to be obtained by increasing the quantity of coin in proportion to the quantity of paper. I will not now weary you