Kitabı oku: «Thirty Years' View (Vol. I of 2)», sayfa 104

Messrs. Michael W. Ash, James M. H. Beale, Benning M. Bean, Andrew Beaumont, John W. Brown, Robert Burns, John F. H. Claiborne, Walter Coles, Samuel Cushman, George C. Dromgoole, John Fairfield, William K. Fuller, Ransom H. Gillet, Joseph Hall, Thomas L. Hamer, Leonard Jarvis, Cave Johnson, Gerrit Y. Lansing, Gideon Lee, George Loyall, Abijah Mann, jr., John Y. Mason, James J. McKay, John McKeon, Isaac McKim, Gorham Parks, Franklin Pierce, Henry L. Pinckney, John Roane, James Rogers, Nicholas Sickles, William Taylor, Francis Thomas, Joel Turrill, Aaron Vanderpoel, Aaron Ward, Daniel Wardwell, Henry A. Wise.

The bill passed the House, and was approved by the President, but with a repugnance of feeling, and a recoil of judgment, which it required great efforts of friends to overcome; and with a regret for it afterwards which he often and publicly expressed. It was a grief that his name was seen to such an act. It was a most unfortunate act, a plain evasion of the constitution for a bad purpose – soon gave a sad overthrow to the democracy – and disappointed every calculation made upon it. Politically, it was no advantage to its numerous and emulous supporters – of no disservice to its few determined opponents – only four in number, in the Senate, the two senators from Mississippi voting against it, for reasons found in the constitution of their State. To the States, it was of no advantage, raising expectations which were not fulfilled, and upon which many of them acted as realities, and commenced enterprises to which they were inadequate. It was understood that some of Mr. Van Buren's friends favored the President's approval, and recommended him to sign it – induced by the supposed effect which its rejection might have on the democratic party in the election. The opponents of the bill did not visit the President to give him their opinions, nor had he heard their arguments. If they had seen him, their opinions concurring with his own feelings and judgment, his conduct might have been different, and the approval of the act withheld. It might not have prevented the act from becoming a law, as two thirds in each House might have been found to support it; but it would have deprived the bill of the odor of his name, and saved himself from subsequent regrets. In a party point of view, it was the commencement of calamities, being an efficient cause in that general suspension of specie payments, which quickly occurred, and brought so much embarrassment on the Van Buren administration, ending in the great democratic defeat of 1840. But of this hereafter.

CHAPTER CXLIII.
RECHARTER OF THE DISTRICT BANKS – SPEECH OF MR. BENTON: THE PARTS OF LOCAL AND TEMPORARY INTEREST OMITTED

"Mr. Benton rose to oppose the passage of the bill, notwithstanding it was at the third reading, and that it was not usual to continue opposition, which seemed to be useless, at that late stage. But there were occasions when he never took such things into calculation, and when he continued to resist pernicious measures, regardless of common usages, as long as the forms of parliamentary proceeding would allow him to go on. Thus he had acted at the passing of the United States Bank charter, in 1832; thus he did at the passing of the resolution against President Jackson, in 1834; and thus he did at the passing of the famous land bill, at the present session. He had continued to speak against all these measures, long after speaking seemed to be of any avail; and, far from regretting, he had reason to rejoice at the course that he had pursued. The event proved him to be right; for all these measures, though floated through this chamber upon the swelling wave of a resistless and impatient majority, had quickly run their brief career. Their day of triumph had been short. The bank charter perished at the first general election; the condemnatory resolution was received by the continent in a tempest of execration; and the land bill, that last hope of expiring party, has dropped an abortion from the Senate. It is dead even here, in this chamber, where it originated – where it was once so omnipotent that, to speak against it, was deemed by some to be an idle consumption of time, and by others to be an unparliamentary demonstration against the ascertained will of the House. Yet, that land bill is finished. That brief candle is out. The Senate has revoked that bill; has retracted, recanted, and sung its palinode over that unfortunate conception. It has sent out a committee – an extraordinary committee of nine – to devise some other scheme for dividing that same money which the land bill divides! and, in doing so, the Senate has authentically declared a change of opinion, and a revocation of its sentiments in favor of that bill. Thus it has happened, in recent and signal cases, that, by continuing the contest after the battle seemed to be lost, the battle was in fact gained; and so it may be again. These charters may yet be defeated; and whether they will be or not, is nothing to me. I believe them to be wrong – greatly, immeasurably wrong! – and shall continue to oppose them without regard to calculations, or consequences, until the rules of parliamentary proceeding shall put an end to the contest. Mr. B. said he had moved for a select committee, at the commencement of the session, to examine into the condition of these banks, and he had done so with no other object than to endeavor to provide some checks and guards for the security of the country against the abuses and excesses of the paper system. The select committee had not been raised. The standing Committee on the District of Columbia had been charged with the subject; and, seeing that they had made a report adverse to his opinions, and brought in a bill which he could not sanction, it would be his part to act upon the meagre materials which had been placed before the Senate and endeavor to accomplish as a member of that body, what could have been attempted, with better prospects of success, as a member of a committee which had had the management of the subject.

"Mr. B. said he had wished to have been on a select committee for the charter of these banks; he wished to have revived the idea of a bank without circulation, and to have disconnected the government from the banking of the district. He had failed in his attempt to raise such a committee; and, as an individual member of the Senate, he could now do no more than mention in debate the ideas which he would have wished to have ripened into legislation through the instrumentality of a committee.

"Mr. B. said he had demonstrated that no bank of circulation ought to be authorized in this district; and, he would add, that none to furnish currency, except of large notes, ought to be authorized any where; yet what are we doing? We are breeding six little corporations at a birth, to issue $2,250,000 of paper currency: and on what terms? No bonus; no tax on the capital; none on the circulation; no reduction of interest in lieu of bonus or tax; no specie but what the stockholders please to put in; and no liability on the part of the stockholders for a failure of these corporations to redeem their notes and pay their debts. This is what we are doing; and now let us see what burdens and taxes these six corporations will impose upon the business part of the community – the productive classes among which they are to be perpetuated. First, there is the support of these six corporation governments; for every bank must have a government, like a State or kingdom; and the persons who administer these corporation governments must be paid, and paid by the people, and that according to the rates fixed by themselves and not by the people. Each of these six banks must have its president, cashier, clerks, and messengers; its notary public to protest notes; and its attorney to bring suits. The aggregate salaries, fees, and perquisites, of all these officers of the six banks will be the first tax on the people. Next comes the profits to the stockholders. The nett profits of banks are usually eight to ten per cent. at present; the gross profits are several per cent. more; and the gross profits are what the people pay. Assuming the gross profits to be twelve per cent., and the annual levy upon the community will be about $270,000. The third loss to the community will be on the fluctuations of prices of labor and property, and the rise and fall of stocks, from the expansions and contractions of currency, produced by making money plenty or scarce, as it suits the interest of the bank managers. This item cannot be calculated and depends entirely upon the moderation and consciences of the Neptunes who preside over the flux and reflux of the paper ocean; and to whom all tides, whether of ebb or flow, and all conditions of the sea, whether of calm or storm, are equally welcome, equally auspicious, and equally productive. Then come three other heads of loss to the community, and of profit to the bank: loss of notes from wear and tear, counterfeits imposed upon the people for good notes, and good notes rejected by the banks for counterfeits; and then the loss to the holders from the stoppage and failure of banks, and the shaving in of notes and stocks. Such are the burdens and taxes to be imposed upon the people to give them a paper currency, when, if the paper currency were kept away, and only large notes used, as in France, they would have a gold and silver currency without paying a tax to any body for it, and without being subject to any of the frightful evils resulting from the paper system.

"Objecting to all banks of circulation, but not able to suppress them entirely, Mr. B. suggested some ameliorations in the charters proposed to be granted to render them less dangerous to the community. 1. The liability of the stockholders for all the debts of the institution, as in the Scottish banks. 2. The bank stock to be subject to taxation, like other property. 3. To issue or receive no note of less than twenty dollars. 4. The charters to be repealable at the will of Congress: and he gave reasons for each of these improvements; and first for the liability of the stockholders. He said:

"Reasons for this liability were strong and palpable. A man that owes should pay while he has property to pay with; and it is iniquitous and unjustifiable that a bank director, or stockholder, should riot in wealth while the business part of the community should hold the bank notes which they have put into circulation, and be able to get nothing for them after the bank had closed its doors. Such exemptions are contrary to the rights of this community, and one of the great causes of the failure of banks. A liability in the stockbrokers is one of the best securities which the public can have for the correct management and solvency of the institution. The famous Scottish banks, which, in upwards of one hundred years' operations, had neither once convulsed the country with contractions and expansions, nor once stopped payment, were constituted upon this principle. All the country banks in England, and all the bankers on the continent of Europe, were liable to a still greater degree; for in them each stockholder, or partner, was liable, individually, for the whole amount of the debts of the bank. The principle proposed to be incorporated in these charters strikes the just medium between the common law principle, which makes each partner liable for the whole debts of the firm; and the corporation principle in the United States, which absolves each from all liability, and leaves the penniless and soulless carcase of a defunct and eviscerated bank alone responsible to the community. Liability to the amount of the stock was an equitable principle, and with summary process for the recovery of the amounts of notes and deposits, and the invalidity of transfers of stock to avoid this liability, would be found a good remedy for a great evil. If the stockholders in the three banks which stopped payment in this city during the panic session had been thus liable, the notes would not have been shaved out of the hands of the holders; if the bank which stopped in Baltimore at the same time, had been subject to this principle, the riots, which have afflicted that city in consequence of that stoppage, would not have taken place. Instead of these losses and riots, law and remedy would have prevailed; every stockholder would have been summoned before a justice of the peace – judgment granted against him on motion – for the amount held by the complainant; and so on, until all were paid, or he could plead that he had paid up the whole amount of his stock."

The evil of small notes he classed under three general heads: 1. The banishment of gold and silver. 2. Encouragement to counterfeiting. 3. Throwing the burthens and losses of the paper system upon the laboring and small-dealing part of the community, who have no share in the profits of banking, and should not be made to bear its losses. On these points, he said:

"The instinct of banks to sink their circulation to the lowest denomination of notes which can be forced upon the community, is a trait in the system universally proved to exist wherever banks of circulation have been permitted to give a currency to a country; and the effect of that instinct has always been to banish gold and silver. When the Bank of England was chartered, in the year 1694, it could issue no note less than £100 sterling; that amount was gradually reduced by the persevering efforts of the bank, to £50; then to £20; then to £15; then to £10; at last to £5; and finally to £2 and £1. Those last denominations were not reached until the year 1797, or until one hundred and three years after the institution of the bank; and as the several reductions in the size of the notes, and the consequent increase of paper currency took place, gold became more and more scarce; and with the issue of the one and two pound notes, it totally disappeared from the country.

"This effect was foretold by all political economists, and especially by Mr. Burke, then aged and retired from public life, who wrote from his retreat, to Mr. Canning, to say to Mr. Pitt, the Prime Minister, these prophetic words: 'If this bill for the one and two pounds is permitted to pass, we shall never see another guinea in England.' The bill did pass, and the prediction was fulfilled; for not another guinea, half guinea, or sovereign, was seen in England, for circulation, until the bill was repealed two and twenty years afterwards! After remaining nearly a quarter of a century without a gold circulation, England abolished her one and two pound notes, limited her paper currency to £5 sterling, required all Bank of England notes to be paid in gold, and allowed four years for the act to take effect. Before the four years were out, the Bank of England reported to Parliament that it was ready to begin gold payments; and commenced accordingly, and has continued them ever since.

"The encouragement of counterfeiting was the next great evil which Mr. B. pointed out as belonging to a small note currency; and of all the denominations of notes, he said those of one and two pounds in England (corresponding with fives and tens in the United States), were those to which the demoralizing business of counterfeiting was chiefly directed! They were the chosen game of the forging depredator! and that, for the obvious reasons that fives and tens were small enough to pass currently among persons not much acquainted with bank paper, and large enough to afford some profit to compensate for the expense and labor of producing the counterfeit, and the risk of passing it. Below fives, the profits are too small for the labor and risk. Too many have to be forged and passed before an article of any value can be purchased; and the change to be got in silver, in passing one for a small article, is too little. Of twenty and upwards, though the profit is greater on passing them, yet the danger of detection is also greater. On account of its larger size, the note is not only more closely scrutinized before it is received, and the passer of it better remembered, but the circulation of them is more confined to business men and large dealers, and silver change will not be given for them in buying small articles. The fives and tens, then, in the United States, like the £1 and £2 in England, are the peculiar game of counterfeiters, and this is fully proved by the criminal statistics of the forgery department in both countries. According to returns made to the British Parliament for twenty-two years – from 1797 to 1819 – the period in which the one and two pound notes were allowed to circulate, the whole number of prosecutions for counterfeiting, or passing counterfeit notes of the Bank of England, was 998: in that number there were 313 capital convictions; 530 inferior convictions; and 155 acquittals: and the sum of £249,900, near a million and a quarter of dollars, was expended by the bank in attending to prosecutions. Of this great number of prosecutions, the returns show that the mass of them were for offences connected with the one and two pound notes. The proportion may be distinctly seen in the number of counterfeit notes of different denominations detected at the Bank of England in a given period of time – from the 1st of January, 1812, to the 10th of April, 1818 – being a period of six years and three months out of the twenty-two years that the one and two pound notes continued to circulate. The detections were, of one pound notes, the number of 107,238; of two pound notes, 17,787; of five pound notes, 5,826; of ten pound notes, 419; of twenty pound notes, 54. Of all above twenty pounds, 35. The proportion of ones and twos to the other sizes may be well seen in the tables for this brief period; but to have any idea of the mass of counterfeiting done upon those small notes, the whole period of twenty-two years must be considered, and the entire kingdom of Great Britain taken in; for the list only includes the number of counterfeits detected at the counter of the bank; a place to which the guilty never carry their forgeries, and to which a portion only of those circulating in and about London could be carried. The proportion of crime connected with the small notes is here shown to be enormously and frightfully great. The same results are found in the United States. Mr. B. had looked over the statistics of crime connected with the counterfeiting of bank notes in the United States, and found the ratio between the great and small notes to be about the same that it was in England. He had had recourse to the most authentic data – Bicknell's Counterfeit Detector – and there found the editions of counterfeit notes of the local or State banks, to be eight hundred and eighteen, of which seven hundred and fifty-six were of ten dollars and under; and sixty-two editions only were of twenty dollars and upwards. Of the Bank of the United States and its branches, he found eighty-two editions of fives; seventy-one editions of tens; twenty-six editions of twenties; and two editions of fifties; still showing that in the United States, as well as in England, on local banks as well as that of the United States, the course of counterfeiting was still the same; and that the whole stress of the crime fell upon the five and ten dollar notes in this country, and their corresponding classes, the one and two pound notes in England. Mr. B. also exhibited the pages of Bicknell's Counterfeit Detector, a pamphlet covered over column after column with its frightful lists, nearly all under twenty dollars; and he called upon the Senate in the sacred name of the morals of the country – in the name of virtue and morality – to endeavor to check the fountain of this crime, by stopping the issue of the description of notes on which it exerted nearly its whole force.

"Mr. B. could not quit the evils of the crime of counterfeiting in the United States without remarking that the difficulty of legal detection and punishment was so great, owing to the distance at which the counterfeits were circulated from the banks purporting to issue them, and the still greater difficulty (in most cases impossible) of getting witnesses to attend in person, in States in which they do not reside, the counterfeiters all choosing to practise their crime and circulate their forgeries in States which do not contain the banks whose paper they are imitating. So difficult is it to obtain the attendance of witnesses in other States, that the crime of counterfeiting is almost practised with impunity. The notes under $20 feed and supply this crime; let them be stopped, and ninety-nine hundredths of this crime will stop with them.

"A third objection which Mr. B. urged against the notes under twenty dollars was, that nearly the whole evils of that part of the paper system fell upon the laboring and small dealing part of the community. Nearly all the counterfeits lodged in their hands, or were shaved out of their hands. When a bank failed, the mass of its circulation being in small notes, sunk upon their hands. The gain to the banks from the wear and tear of small notes, came out of them; the loss from the same cause, falling upon them. The ten or twelve percent. annual profit for furnishing a currency in place of gold and silver (for which no interest would be paid to the mint or the government), chiefly falls upon them; for the paper currency is chiefly under twenty dollars. These evils they almost exclusively bear, while they have, over and above all these, their full proportion of all the evils resulting from the expansions and contractions which are incessantly going on, totally destroying the standard of value, periodically convulsing the country; and in every cycle of five or six years making a lottery of all property, in which all the prizes are drawn by bank managers and their friends.

"He wished the basis of circulation throughout the country to be in hard money. Farmers, laborers, and market people, ought to receive their payments in hard money. They ought not to be put to the risk of receiving bank notes in all their small dealings. They are no judges of good or bad notes. Counterfeits are sure to fall upon their hands; and the whole business of counterfeiting was mainly directed to such notes as they handle – those under twenty dollars.

"Mr. B. said he here wished to fix the attention of those who were in favor of a respectable paper currency – a currency of respectable-sized notes of twenty dollars and upwards – on the great fact, that the larger the specie basis, the larger and safer would be the superstructure of paper which rested upon it; the smaller that specie basis, the smaller and more unsafe must be the paper which rested on it. The currency of England is $300,000,000, to wit: £8,000,000 sterling (near $40,000,000) in silver; £22,000,000 sterling (above $100,000,000) in gold; and about £30,000,000 sterling (near $150,000,000) in bank notes. The currency of the United States is difficult to be ascertained, from the multitude of banks, and the incessant ebb and flow of their issues; calculations vary; but all put the paper circulation at less than $100,000,000; and the proportion of specie and paper, at more than one half paper. This is agreed upon all hands, and is sufficient for the practical result, that an increase of our specie to $100,000,000, and the suppression of small notes, will give a larger total circulation than we now have, and a safer one. The total circulation may then be $200,000,000, in the proportions of half paper and half specie; and the specie, half gold and half silver. This would be an immense improvement upon our present condition, both in quantity and in quality; the paper part would become respectable from the suppression of notes under twenty dollars, which are of no profit except to the banks which issue them, and the counterfeiters who imitate them; the specie part would be equally improved by becoming one half gold. Mr. B. could not quit this important point, namely, the practicability of soon obtaining a specie currency of $100,000,000, and the one half gold, without giving other proofs to show the facility with which it has been every where done when attempted. He referred to our own history immediately after the Revolution, when the disappearance of paper money was instantly followed, as if by magic, by the appearance of gold and silver; to France, where the energy of the great Napoleon, then first consul, restored an abundant supply of gold and silver in one year; to England, where the acquisition of gold was at the rate of $24,000,000 per annum for four years after the notes under five pounds were ordered to be suppressed; and he referred with triumph to our own present history, when, in defiance of an immense and powerful political and moneyed combination against gold, we will have acquired about $20,000,000 of that metal in the two concluding years of President Jackson's administration.

"Mr. B. took this occasion to express his regret that the true idea of banks seemed to be lost in this country, and that here we had but little conception of a bank, except as an issuer of currency. A bank of discount and deposit, in contradistinction to a bank of circulation, is hardly thought of in the United States; and it may be news to some bank projectors, who suppose that nothing can be done without banks to issue millions of paper, to learn that the great bankers in London and Paris, and other capitals of Europe, issue no paper; and, still more, it may be news to them to learn that Liverpool and Manchester, two cities which happen to do about as much business as a myriad of such cities as this our Washington put together, also happen to have no banks to issue currency for them. They use money and bills of exchange, and have banks of discount and deposit, but no banks of circulation. Mr. Gallatin, in his Essay upon Currency, thus speaks of them:

"'There are, however, even in England, where incorporated country banks issuing paper are as numerous, and have been attended with the same advantages, and the same evils, as our country banks, some extensive districts, highly industrious and prosperous, where no such bank does exist, and where that want is supplied by bills of exchange drawn on London. This is the case in Lancashire, which includes Liverpool and Manchester, and where such bills, drawn at ninety days after date, are indorsed by each successive holder, and circulate through numerous persons before they reach their ultimate destination, and are paid by the drawee.'

"Mr. B. greatly regretted that such banks as those in Liverpool and Manchester were not in vogue in the United States. They were the right kind of banks. They did great good, and were wholly free from mischief. They lent money; they kept money; they transferred credits on books; they bought and sold bills of exchange; and these bills, circulating through many hands, and indorsed by each, answered the purpose of large bank notes, without their dangers, and became stronger every time they were passed. To the banks it was a profitable business to sell them, because they got both exchange and interest. To the commercial community they were convenient, both as a remittance and as funds in hand. To the community they were entirely safe. Banks of discount and deposit in the United States, issuing no currency, and issuing no bank note except of $100 and upwards, and dealing in exchange, would be entitled to the favor and confidence of the people and of the federal government. Such banks only should be the depositories of the public moneys.

"It is the faculty of issuing paper currency which makes banks dangerous to the country, and the height to which this danger has risen in the United States, and the progress which it is making, should rouse and alarm the whole community. It is destroying all standard of value. It is subjecting the country to demoralizing and ruinous fluctuations of price. It is making a lottery of property, and making merchandise of money, which has to be bought by the ticket holders in the great lottery at two and three per cent. a month. It is equivalent to the destruction of weights and measures, and like buying and selling without counting, weighing, or measuring. It is the realization, in a different form, of the debasement and arbitrary alteration of the value of coins practised by the kings of Europe in former ages, and now by the Sultan of Turkey. It is extinguishing the idea of fixed, moderate, annual interest. Great duties are thus imposed upon the legislator; and the first of these duties is to revive and favor the class of banks of discount and deposit; banks to make loans, keep money, transfer credits on books, buy and sell exchange, deal in bullion; but to issue no paper. This class of banks should be revived and favored; and the United States could easily revive them by confiding to them the public deposits. The next great duty of the legislator is to limit the issues of banks of circulation, and make them indemnify the community in some little degree, by refunding, in annual taxes, some part of their undue gains.

"The progress of the banking business is alarming and deplorable in the United States. It is now computed that there are 750 banks and their branches in operation, all having authority to issue currency; and, what is worse, all that currency is receivable by the federal government. The quantity of chartered bank capital, as it is called, is estimated at near $800,000,000; the amount of this capital reported by the banks to have been paid in is about $300,000,000; and the quantity of paper money which they are authorized by their charters to issue is about $750,000,000. How much of this is actually issued can never be known with any precision; for such are the fluctuations in the amount of a paper currency, flowing from 750 fountains, that the circulation of one day cannot be relied upon for the next. The amount of capital, reported to be paid in, is, however, well ascertained, and that is fixed at $300,000,000. This, upon its face, and without recourse to any other evidence, is proof that our banking system, as a whole, is unsolid and delusive, and a frightful imposition upon the people. Nothing but specie can form the capital of a bank; there are not above sixty or seventy millions of specie in the country, and, of that, the banks have not the one half. Thirty millions in specie is the extent; the remainder of the capital must have been made up of that undefinable material called 'specie funds,' or 'funds equivalent to specie,' the fallacy of which is established by the facts already stated, and which show that all the specie in the country put together is not sufficient to meet the one fifth part of these 'specie funds,' or 'funds equivalent to specie.' The equivalent, then, does not exist! credit alone exists; and any general attempt to realize these 'specie funds,' and turn them into specie, would explode the whole banking system, and cover the country with ruin. There may be some solid and substantial banks in the country, and undoubtedly there are better and worse among them; but as a whole – and it is in that point of view the community is interested – as a whole, the system is unsolid and delusive; and there is no safety for the country until great and radical reforms are effected.