1817.

aggressors. Added to this ground of complaint on both sides, there was soon afterwards some violence employed in obtaining possession of the territory ceded to the United States by the last Creek treaties; violence for which the Indians took revenge in December, by attacking a boat laden with supplies, on the Appalachicola, and killing above forty persons who were on board, some of them being women and children.

So soon as the attack on the boat was known, the government authorized General Gaines to advance into Florida "if necessary;" but specially instructed him not to attack a fort, if the Indians should take shelter under the guns of any, "but to report the fact." General Jackson, who was the principal officer in the south, at the same time received orders, at the close of December, to put himself at the head of the movement; and he was empowered to call out a militia force from his own state, in addition to that which had been raised in Georgia.

Early in January, General Jackson, at the head of a formidable band of Tennessee volunteers, set out for the Before the end of the month, he concluded a treaty with that part of the Creek nation which was friendly to the United States; and secured their assistance against the Sem

inoles. On the 1st of March, 1818. he reached Fort Scott, on the Appalachicola; having now under his command above four thousand men, a force exceeding in number the whole of the nation he was about to attack, including both women and children.

Provisions running short, he hastened southward without delay, employing his Indians to scour the whole country round the line of march, by which means he secured a great number of prisoners from the enemy. On the site of the stronghold which the negroes had held, and been dispossessed in 1816, Jackson built a fort, and named it Fort Gadsden; and this he made use of as a dépôt for supplies.

On the 1st of April, the Creek towns on Mickasukie Lake, and the Ocilla River, were stormed and destroyed, and cattle and corn in abundance was taken. Here, too, was found a redpainted war-pole, from which were suspended a great cluster of scalps; fifty of them, it was said; and, as might have been expected, including those of every sex and age. Beside these, there were some two hundred and fifty others of these horrid trophies found, a circumstance which naturally enough shocked Jackson and his men.

The American commander was not a man easily deterred by difficulties or scruples. Having no doubts in his mind of the complicity of the Spaniards and of their furnishing supplies to the Seminoles, he marched forward, without delay, to St. Mark's, a small Spanish post, with a fort, at the head of Appalachicola Bay. After a feeble resist ance, the fort surrendered, and was occupied by American forces.

While here, Jackson took prisoners, a Scotch trader, from New Providence, named Alexander Arbuthnot, and soon after Robert C. Ambrister, a native of the same province. Both were engaged in active trade with the Indians, and

ish civil and military authorities were transported to Havana, and the province was occupied by the American troops. Colonel King was appointed civil and military governor, the Spanish revenue laws were abolished, and all the necessary officers of the new government appointed. General Jackson then returned to Nashville, leaving General Gaines in command. But early in August, he ordered Gaines to take possession of St. Augustine, on the ground that the Indians had been supplied there with ammunition to carry on the war. Immediately on this order becoming known to the war department, it was countermanded.

The proceedings of General Jackson caused great excitement throughout the country, and severe censures were freely bestowed upon measures which were held to be of the most high-handed character. The meeting of Congress, and the course which the government would pursue in this matter, were looked for with deep interest not unmingled with apprehension.

During the recess of Congress, Mr. Monroe paid a visit to the towns and coasts of Chesapeake Bay, for the purpose of examining the forts and defences in that quarter, and of selecting a site for a naval dépôt. He returned by the interior of Virginia to Washington, about the middle of June; and the national legislature re-assembled on the 16th of November. The message was sent in the next day, and contained a full and interesting summary of affairs for the consideration of Congress. The country was represented as being in a prosperous condition; crops abundant,

1818.

commerce flourishing, and the revenue steadily increasing. The relations with Spain were unsettled as yet, but with all other powers, there was peace and amity existing. The receipts into the treasury for the first three quarters of the year, the president stated, had exceeded $17,000,000. On the 1st of January of the next year, more than $2,000,000 would remain in the treasury, and the revenue for the year was estimated at $26,000,000; other topics, relating to home affairs principally, were urged upon the notice of Congress.

The bank of the United States, from the establishment of which great expectations of advantage had been formed, did not accomplish all that the people desired. The consequence was, that loud complaints were made, and charges of mismanagement were freely circulated against the directors of the bank. At the time when Congress assembled, and the president presented his flattering picture of the state of things in the United States generally, the bank was evidently getting into an exceedingly unsatisfactory condition; and the greatest fears were every where entertained in consequence. A commitee of inquiry was appointed, with John C. Spencer at the head, who ascertained some of the immediate causes of this;' and they require the best attention of the reader, as well because of their intrinsic importance, as of the large share

*The committee consisted of Messrs. Spencer, Lowndes, M'Lane, Bryan, and Tyler. Their report, which was very elaborate, was brought in on the 16th of January, 1819.

CH. II]

of public concern which has been bestowed upon the question of a national bank and its advantages and disadvantages.

The actual specie capital possessed by the bank, when first entering upon the transaction of business, was only $2,000,000, a sum entirely insufficient for the purposes of the institution. A special agent accordingly was sent to England, at a salary of $20,000, to contract for specie; and between July, 1817, and December, 1818, upwards of $7,250,000 were obtained and imported into the United States. But the cost at which this was done was enormous, being more than half a million of dollars.

1818.

Numerically, as it might, perhaps, have been expected under the then existing circumstances, the speculators who held shares in the bank far exceeded the capitalists; and the former class having thus gained the direction of its operations, they took care to guide them so as to secure advantages and profit for themselves, without regard either to the legitimate object of the establishment of the bank, or the claims of those whose capital, put into the concern, was its only available means of working or subsisting. The particular way in which they employed their power, was the device and perfection of a scheme of stockjobbing in bank shares, the like to which has not often been attempted in this particular species of gambling. The mode of operations was something after this sort. It was agreed to discount the notes of stockholders for the payment of their instalments, upon the pledge

317

of their stock, without any other security; first, at par, and afterwards for twenty-five per cent. more than the nominal amount; requiring, however an endorser for the excess. These stocknotes, as they were termed, were re ceived indefinitely, at the pleasure of the stockholders. And as a necessary and foreseen consequence, shares were bought without the advance of a cent. An adventurer would engage a certain number of shares, apply to the directors for a loan on the pledge of the stock engaged, and by what was called a "simultaneous operation," the stock was transferred to him, pledged to the bank, and the discount made, with the avails of which he paid for his stock: a rise in the market would enable him to sell his stock at an advance, pocket the difference, and commence new operations. As a further As a further consequence, the price of shares rose, till, about the beginning of September, 1817, they reached $156.50 a share; and at last, all of a sudden, soon after Congress had begun to inquire respecting the business, and no doubt because of the inquiry, the bubble burst, and they fell from $156.50 to $110, and thence to $90 a share; dissipating hundreds of imaginary fortunes, and changing many shareholders in the bank into bankrupts.

The city of Baltimore was the principal scene of these operations; the management of that branch having fallen almost exclusively into the hands of persons without capital, and without principle. Two or three houses, in which some of the directors had an in terest, drew from the bank $1,500,000, and the defalcations in the Baltimore

branch alone amounted to $1,700,000; a sum about equal to the aggregate amount of losses at the parent bank and all the other branches.

Nor was this the only way in which the institution was injured by these speculations. One of the chief benefits expected from it, for the Union at large, was the creation of a general currency of uniform value; by which the greater part of the evils affecting the business transactions of the country would have been remedied or prevented. And for this purpose it was requisite that bills issued by any particular branch, and, according to their tenor, payable at that branch only, should be received and paid, both at the parent bank and all its branches. Until July, 1818, this plan was followed; but most of the enormous quantity of paper emitted in the southern and western states, by the regular course of trade found its way to the north, and in self-defence the branches there were at last compelled to refuse payment, and then the bank ordered the payment of bills at the branches issuing them alone, so that this first attempt to get a uniform currency proved fruitless.

One of the worst features in the whole case was this; some of the most prominent of the directors, both those elected by the shareholders and those nominated by the government, were implicated in these schemes and speculations; and the parent bank at Philadelphia itself was induced to imitate the dishonest proceedings at Baltimore, to the injury of New York and Boston. The committee, named above, entered into a most careful investigation of the

1819.

whole matter, and in their report set forth the real causes of the embarrassments of the bank; the consequence of which was, that Mr. William Jones, the president, and others of the managers, resigned their posts. Stringent measures were recommended by the committee, and several resolutions offered in respect to what were considered violations of the charter of the bank.* A new board of direction was chosen, and Langdon Cheves, whose reputation as a financier stood deservedly high, was appointed president. Under his able and vigilant control matters speedily assumed a brighter aspect. The stock found its way into the hands of real capitalists, and rose again in value to $120 per share. The affairs of the institution were minutely examined, and a careful and trustwor thy statement was published, which quite reassured the minds of the shareholders. The most prudent measures, in borrowing specie, curtailing discounts, arranging the relations of the branches, and prosecuting defaulters, were adopted; and not only was bankruptcy averted, but the establishment, after a short season of uncertainty and unpopularity, began to recover from its losses, and to regain and to deserve the confidence of the mercantile world.

The president, not long after the

*A clause in the charter allowed no individual to have more than thirty votes, no matter what the number of his shares in the bank might be. The speculators of Baltimore very adroitly evaded the force of this provision of the charter, by subscribing for single shares in the names of other people, who gave them powers of attorney to vote for them at the meetings, and charged

the sum of twelve and a-half cents for the risk entailed

by their participation in this gross fraud!