Life and times

THE

LIFE AND TIMES

HENRY CLAY.

CHAPTER 1.

THE CURRENCY.

Mr. Clay's Views in 1811.-His Change of Opinion on a National Bank.-Reasons.-The Constitutional Question.-Not Banks, but a Tariff, that makes Money plenty and sound.-Losses to the Country by State Banks.-General Jackson's Veto of the Bank in 1832.-Reasons.-Remarks of Mr. Clay on the Veto.-The Motives out of Sight.-The Wiles of the Magician.-The Way the State of New York was brought under.-How General Jackson attempted to bring the Nation under.-Failure.-Vengeance.

WHEN Mr. Clay made his speech, in 1811, against rechartering the bank of the United States, he found occasion to rehearse the following anecdote of Patrick Henry :

"He mistook, in one instance, the side of the cause in which he was retained, and addressed the court and jury in a very masterly and convincing speech, in behalf of his antagonist. His distracted client came up to him, while he was thus employed, and, interrupting him, bitterly exclaimed: You have undone me! You have ruined me!'- Never mind-give yourself no concern,' said the adroit advocate; and turning to the court and jury, continued his argument, by observing, May it please your honors, and you, gentlemen of the jury, I have been stating to you what I presume my adversary may urge on his side. I will now show you how fallacious his reasonings, and groundless his pretensions are.' The skilful orator proceeded, satisfactorily refuted every argument he had advanced, and gained his cause!"

It can not be denied, that Mr. Clay made a very able argument on that occasion, and that either his argument, or his vote, or both, defeated the bill; for it passed the house of representatives, and was lost in the senate, of which Mr. Clay was then a member.

only by the casting vote of the vice-president, Mr. Clinton. But in Mr. Clay's argument on the same subject, in 1816, like Patrick Henry, he beat himself, "and gained his cause." His speech on the last occasion, in committee of the house of representatives, of which he was then member and speaker, was never published; but in an address to his constituents at Lexington, June 3, 1816, his views and reasons in supporting the bank are succinctly and forcibly stated, of which he afterward, in 1832, said: "By the reasons assigned in it for the change of my opinion, I am ready to abide, in the judgment of the present generation, and of posterity." He also said on the same occasion: "During a long public life (I mention the fact not as claiming any merit for it), the only great question, on which I have ever changed my opinion, is that of the bank of the United States." It might, perhaps, more properly be called a change of sides, than of opinion; for the reasons which shaped and controlled his opinion in 1811, are as different from those which swayed him in 1816, as one opinion varies from the other; and there is no inconsistency in his action in the two cases, when the reasons of both are considered. It was not, therefore, strictly speaking, a change of opinion; but a change of circumstances in the state of the country and in the state of the question, which led to different views with a statesman. Since, however, Mr. Clay himself has allowed it to be a change of opinion, others are not required to arraign this admission, though it may be suggested, that its ingenuousness might naturally create additional confidence in that correctness of judgment which has never required, and that firmness of character which has never shown, a change on any other great national question.

But, it is due to Mr. Clay to show the reasons of this change. They are few, simple, and obvious. In Mr. Clay's address to his constituents, June 3, 1816, he gave three reasons for his opposition to the bank in 1811: "First, that he was instructed to oppose it by the legislature of the state. Next, that he believed the corporation had, during a portion of the period of its existence, abused its power, and had sought to subserve the views of a political party." In answer to the question, "What security is there, that the new bank [of 1816] will not imitate this example?" he replied: "The fate of the old bank, warning all similar institutions to shun politics; the existence of abundant competition, arising from the great multiplication of banks; and the precautions which are to be found in the details of the act."

A third consideration [said Mr. Clay] upon which he acted in 1811, was, that as the power to create a corporation, such as was proposed to be continued, was not specifically granted in the constitution, and did not then appear to him to be necessary to carry into effect any of the powers which were specifically granted, Congress was not authorized to continue the bank. The constitution, he said, contained powers delegated and prohibitory, powers expressed and constructive. It vests in Congress all powers necessary to give effect to the enumerated powers-all that may be necessary to put into motion and activity the machine of government which it constructs. The powers that may be so necessary are deducible by construction. They are not defined in the constitution. They are, from their nature, indefinable. When the question is in relation to one of these powers, the point of inquiry should be, is its exertion necessary to carry into effect any of the enumerated powers and objects of the general government? With regard to the degree of necessity, various rules have been, at different times, laid down; but, perhaps, at last, there is no other than a sound and honest judgment exercised, under the checks and control which belong to the constitution and to the people.

"The constructive powers being auxiliary to the specifically granted powers, and depending for their sanction and existence upon a necessity to give effect to the latter, which necessity is to be sought for and ascertained by a sound and honest discretion, it is manifest that this necessity may not be perceived, at one time, under one state of things, when it is perceived at another time, under a different state of things. The constitution, it is true, never changes; it is always the same; but the force of circumstances and the lights of experience may evolve to the fallible persons charged with its administration, the fitness and necessity of a particular exercise of constructive power to-day, which they did not see at a former period.

"Mr. Clay proceeded to remark, that when the application was made to renew the old charter of the bank of the United States, such an institution did not appear to him to be so necessary to the fulfilment of any of the objects specifically enumerated in the constitution, as to justify Congress in assuming, by construction, a power to establish it. It was supported mainly upon the ground that it was indispensable to the treasury.operations. But the local institutions in the several states were at that time in prosperous existence, confided in by the community, having a confidence in each other, and maintaining an intercourse and connexion the most intimate. Many of them were actually employed by the treasury to aid that department, in a part of its fiscal arrangements; and they appeared to him to be fully capable of affording to it all the facility that it ought to desire in all of them. They superseded, in his judgment, the necessity of a national institu

tion. But how stood the case in 1816, when he was called up again to examine the power of the general government to incorporate a national bank? A total change of circumstances was presented-events of the utmost magnitude had intervened.

"A general suspension of specie payments had taken place, and this had led to a train of consequences of the most alarming nature. He beheld, dispersed over the immense extent of the United States, about three hundred banking institutions, enjoying in different degrees the confidence of the public, shaken as to them all, under no direct control of the general government, and subject to no actual responsibility to the state authorities. These institutions were emitting the actual currency of the United States -a currency consisting of a paper, on which they neither paid interest nor principal, while it was exchanged for the paper of the community, on which both were paid. He saw these institutions in fact exercising what had been considered, at all times, and in all countries, one of the highest attributes of sovereignty, the regulation of the current medium of the country. They were no longer competent to assist the treasury in either of the great operations of collection, deposite, or distribution, of the public revenues. In fact, the paper which they emitted, and which the treasury, from the force of events, found itself constrained to receive, was constantly obstructing the operations of that department. For it would accumulate where it was not wanted, and could not be used where it was wanted for the purposes of government, without a ruinous and arbitrary brokerage. Every man who paid or received from the government, paid or received as much less than he ought to have done as was the difference between the medium in which the payment was effected and specie. Taxes were no longer uniform. In New England, where specie payments have not been suspended, the people were called upon to pay larger contributions than where they were suspended. In Kentucky as much more was paid by the people in their taxes than was paid, for example, in the state of Ohio, as Kentucky paper was worth more than Ohio paper.

"Mr. Clay said, he determined to examine the question with as little prejudice as possible arising from his former opinion. He knew that the safest course to him, if he pursued a cold, calculating prudence, was to adhere to that opinion, right or wrong. He was perfectly aware, that if he changed, or seemed to change it, he should expose himself to some censure. But, looking at the subject with the light shed upon it by events happening since the commencement of the war, he could no longer doubt. A bank appeared to him not only necessary, but indispensably necessary, in connexion with another measure, to remedy the evils of which all were but too sensible. He preferred to the suggestions of the

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