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be sustained, equal to any depreciation which may take place in this paper; and when the paper shall come to nothing, the revenue of the country will come to nothing along with it. This has happened to other countries, where this wretched system has been adopted, and it will happen here.

The Austrian government resorted to a similar experiment, in a very critical period of its affairs, in 1809, the year of the last campaign between that country and France, previous to the coalition. Pressed by the necessities of the occasion, the government caused a large quantity of paper to be issued, which was to be received in imposts and taxes. The paper immediately fell to a depreciation of four for one. The consequence was, that the government lost its revenue, and, with it, the means of supplying its armies and defending its empire.

Is this government now ready, sir, to put its resources all at hazard, by pursuing a similar course? Is it ready to sacrifice its whole substantial revenue and permanent supplies to an ill-contrived, illconsidered, dangerous and ruinous project, adopted only as the means of obtaining a little present and momentary relief?

It ought to be considered, also, what effects this bank will produce on other banking institutions already existing, and on the paper which they have issued. The aggregate capital of these institutions is large. The amount of their notes is large, and these notes constitute, at present, in a great portion of the country, the only circulating medium, if they can be called a circulating medium. Whatever affects this paper, either to raise it, or depress it lower than it is, affects the interests of every man in the community.

It is sufficient on this point to refer to the memorial from the banks of New York. That assures us that it must be the operation of such a bank, as this bill would establish, to increase the difficulties and distress, which the existing banks now experience, and to render it nearly impossible for them to resume the payment of their notes. This is what every man would naturally expect. Paper already depreciated, will necessarily be sunk still lower, when another flood of depreciated paper is forced into circulation.

Very recently this government refused to extend the charter of the bank of the United States, upon the ground, that it was unconstitutional for Congress to create banks. Many of the state banks owe their existence to this decision. It was an invitation to the states to incorporate as much banking capital as would answer all the purposes of the country. Notwithstanding what we may now see and hear, it would then have been deemed a gross imputation on the consistency of government, if any man had expressed an expectation, that in five years all these constitutional scruples would be forgotten, all the dangers to political liberty from moneyed institutions disregarded, and a bank proposed upon the most extraordinary principles, with an unprecedented amount of capital, and with no obligation to fulfil its contracts.

The state banks have not forced themselves in the way of government. They were established, many of them at least, when government had declared its purpose to have no bank of its own. They deserve some regard on their own account, and on account of

those particularly concerned in them. But they deserve much more consideration, on account of the quantity of paper which is in circulation, and the interest which the whole community has in it.

Let it be recollected also, sir, that the present condition of the banks is principally owing to their advances to government. The treasury has borrowed of the banks, or of those who themselves borrowed of the banks, till the banks have become as poor, and almost as much discredited, as the treasury itself. They have depreciated their paper, nearly ruined themselves, and brought the sorest distress on the country, by doing that on a small scale, which this bank is to perform on a scale vastly larger.

It is almost unpardonable in the conductors of these institutions, not to have foreseen the consequences which have resulted from the course pursued by them. They were all plain and visible. If they have any apology, it is, that they were no blinder than the government, and that they yielded to those who would take no denial. It will be altogether unpardonable in us, if with this, as well as all other experience before us, we continue to pursue a system which must inevitably lead us through depreciation of currency, paper-money, tender-laws, and all the contemptible and miserable contrivances of disordered finance and national insolvency, to complete and entire bankruptcy in the end.

I hope the House will recommit the bill for amendment.

SPEECH

ON THE BANK OF THE UNITED STATES, DELIVERED IN THE HOUSE OF REPRESENTATIVES OF THE UNITED STATES, JAN. 2, 1815.

On the 24 January, 1815, the bill to incorporate a bank being under consideration, Mr. Webster moved that it be recommitted to a select committee, with instructions to make the following alterations, to wit:

1. To reduce the capital to twenty-five millions, with liberty to the government to subscribe on its own account, five millions.

2. To strike out the thirteenth section.

3. To strike out so much of said bill as makes it obligatory on the bank to lend money to government.

4. To introduce a section providing, that if the bank do not commence its operations within the space of months, from the day of the passing of the act, the charter shall

thereby be forfeited.

5. To insert a section allowing interest at the rate of

per cent. on any bill or note of the bank, of which payment shall have been duly demanded, according to its tenor, and refused; and to inflict penalties on any directors who shall issue any bills or notes during any suspension of specie payment at the bank.

6. To provide that the said twenty-five millions of capital stock shall be composed of five millions of specie, and twenty millions of any of the stocks of the United States bearing an interest of six per cent, or of treasury notes.

7. To strike out of the bill that part of it which restrains the bank from selling its stock during the war.

In support of this motion, the following speech was delivered. The motion did not prevail. but the bill itself was rejected the same day on the third reading. Some of the main principles of these instructions were incorporated into the charter of the present bank, when that charter was granted the following year; especially those, which were more particularly designed to insure the payment of the notes of the bank in specie, at al times, on demand.

HOWEVER the House may dispose of the motion before it, I do not regret that it has been made. One object intended by it, at least, is accomplished. It presents a choice, and it shows that the opposition which exists to the bill in its present state, is not an undistinguishing hostility to whatever may be proposed as a national bank, but a hostility to an institution of such a useless and dangerous nature, as it is believed the existing provisions of the bill would establish.

If the bill should be recommitted and amended according to the instructions which I have moved, its principles will be materially changed. The capital of the proposed bank will be reduced from

fifty to thirty millions: and composed of specie and stocks in nearly the same proportions as the capital of the former bank of the United States. The obligation to lend thirty millions of dollars to government, an obligation which cannot be performed without committing an act of bankruptcy, will be struck out. The power to suspend the payment of its notes and bills will be abolished, and the prompt and faithful execution of its contracts secured, as far as, from the nature of things, it can be secured. The restriction on the sale of its stocks will be removed, and as it is a monopoly, provision will be made that if it should not commence its operations in reasonable time, the grant shall be forfeited. Thus amended, the bill would establish an institution not unlike the last bank of the United States in any particular which is deemed material, excepting only the legalized amount of capital.

To a bank of this nature I should at any time be willing to give my support, not as a measure of temporary policy, or as an expedient to find means of relief from the present poverty of the treasury; but as an institution of permanent interest and importance, useful to the government and country at all times, and most useful in times of commerce and prosperity.

I am sure, sir, that the advantages which would at present result from any bank, are greatly overrated. To look to a bank, as a source capable, not only of affording a circulating medium to the country, but also of supplying the ways and means of carrying on the war, especially at a time when the country is without commerce, is to expect much more than ever will be obtained. Such highwrought hopes can end only in disappointment. The means of supporting an expensive war are not of quite so easy acquisition. Banks are not revenue. They cannot supply its place. They may afford facilities to its collection and distribution. They may furnish, with convenience, temporary loans to government, in anticipation of its taxes, and render important assistance, in divers ways, to the general operation of finance. They are useful to the state in their proper place and sphere, but they are not sources of national income.

The fountains of revenue must be sunk deeper. The credit and circulation of bank paper are the effects, rather than the causes of a profitable commerce, and a well ordered system of finance. They are the props of national wealth and prosperity, not the foundations of them. Whoever shall attempt to restore the fallen credit of this country, by the creating of new banks, merely that they may create new paper, and that government may have a chance of borrowing where it has not borrowed before, will find himself miserably deceived. It is under the influence of no such vain hopes, that I yield my assent to the establishment of a bank on sound and proper principles. The principal good I expect from it is rather future than present. I do not see, indeed, that it is likely to produce evil at any time. In times to come, it will, I hope, be useful. If it were only to be harmless, there would be sufficient reason why it should be supported, in preference to such a contrivance as is now in contemplation.

The bank which will be erected by the bill, if it should pass in its present form, is of a most extraordinary, and, as I think, alarm

ing nature. The capital is to be fifty millions of dollars; five millions in gold and silver, twenty millions in the public debt created since the war, ten millions in treasury notes, and fifteen millions to be subscribed by government, in stock to be created for that purpose. The ten millions in treasury notes, when received in payment of subscriptions to the bank, are to be funded also in United States' stocks. The stock subscribed by government on its own account, and those in which the treasury notes are to be funded, to be redeemable only at the pleasure of the government. The war stock will be redeemable according to the terms upon which the late loans have been negotiated.

The capital of the bank, then, will be five millions of specie and forty-five millions of government stocks. In other words, the bank will possess five millions of dollars, and the government will owe it forty-five millions. This debt from government, the bank is restrained from selling during the war, and government is excused from paying, until it shall see fit. The bank is also to be under obligation to loan government thirty millions of dollars on demand, to be repaid, not when the convenience or necessity of the bank may require, but when debts due to the bank, from government, are paid; that is, when it shall be the good pleasure of government. This sum of thirty millions is to supply the necessities of government, and to supersede the occasion of other loans. This loan will doubtless be made on the first day of the existence of the bank, because the public wants can admit of no delay. Its condition, then, will be, that it has five millions of specie, if it has been able to obtain so much, and a debt of seventy-five millions, no part of which it can either sell or call in, due to it from government.

The

The loan of thirty millions to government can only be made by an immediate issue of bills to that amount. If these bills should return, the bank will not be able to pay them. This is certain, and to remedy this inconvenience, power is given to the directors, by the act, to suspend, at their own discretion, the payment of their notes, until the President of the United States shall otherwise order. President will give no such order, because the necessities of government will compel it to draw on the bank till the bank becomes as necessitous as itself. Indeed, whatever orders may be given or withheld, it will be utterly impossible for the bank to pay its notes. No such thing is expected from it. The first note it issues will be dishonored on its return, and yet it will continue to pour out its paper, so long as government can apply it in any degree to its purposes.

What sort of an institution, sir, is this? It looks less like a bank, than a department of government. It will be properly the papermoney department. Its capital is government debts; the amount of its issues will depend on government necessities; government, in effect, absolves itself from its own debts to the bank, and by way of compensation absolves the bank from its own contracts with others. This is, indeed, a wonderful scheme of finance. The government is to grow rich, because it is to borrow without the obligation of repaying, and is to borrow of a bank which issues paper without liability to redeem it. If this bank, like other institutions

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