The charter of the United States Bank in 1816 was looked upon as the final triumph of the system, as it at the time was organized. The charter itself was built upon the most improved principles in vogue. It was meant to be the most complete personification of the economy under which it came into existence. The corporate existence of the Bank of the United States has now expired; its affairs are in the process of being spread before the public with a fidelity which in the usual reports is uncommon; and we have the privilege of determining from the result of the experiment itself, on the worth and truth of the principles on which it was built. We shall make use of this opportunity in drawing from its history, as far as we may be able, the moral that it contains; and taking up the charges which we have already noticed as made against the scheme at its first promulgation, we shall endeavor to show, in the first place, that there was undue and dangerous power in the hands of the president of the bank; secondly, that there were distinct violations of its charter; thirdly, that there were considerable losses through the fraud and carelessness of its officers and agents; fourthly, that there was frequent interference, on its part, in the political affairs of the country; and fifthly, that there were constant fluctuations, through its agency, in the monetary system.

I. Excessive Power in the President of the Bank.

In an institution so vast as the Bank of the United States, from which accommodations to an average of at least sixty-five millions were continually afloat, which formed for twenty years the centre around which the monetary system ebbed and flowed, a general harmony between the various members was necessary to the interest, as well as the integrity of the whole. The wheels of discount, of circulation, of deposit, must move on a single axis, or move irregularly. The evils of disunion under such auspices are more injurious than the evils of abuse. During the administration of Mr. Jones, the harness of the institution was out of gear, and the branch banks worked on in disregard of the leader who was placed before them, and of the reins that were thrown over their necks. The Baltimore Branch and the New York Branch pulled different ways, because they pulled as their private interest prompted them; and if the Baltimore Branch succeeded

1841.] Bank of the United States and its Presidents. 11

in dragging its neighbor into the ditch, it was because it was the most skilful in violating the feeble restraints which were thrown around it by the central power. Mr. Jones entered the Bank with a character for integrity, which had been gained by the composure with which he had executed political trusts, in which the temptation to err was slight, and the privileges of erring restricted; and after an administration of two years, in which the grossest mismanagement had taken place, not so much from his misfeasance as his incapacity, he established by his compulsory resignation the principle, that worldly integrity alone, and political respectability, are not sufficient for the support of an office whose temptations are so immense, and whose duties so trying. Had Mr. Cheves been permitted to carry out the views of retrenchment and economy, which he displayed on his entrance into the presidency on the vacancy thus created, had he been permitted to carry into effect those narrow but cardinal rules, which were necessary to bring back into its orbit a body which had so widely diverged, and to retain it in its orbit when it was brought back again, he might have continued at the head of the bank till its charter expired, and have kept it in a state in which it would have been both useful to the public by the moderate and regular facilities it afforded, and useful to the stockholders in the punctual repayment of their investments, if not in the diseased exaggeration of their dividends. But Mr. Cheves was bred in a school which was distasteful to the board of financiers who had been nursed in the rich corruption of the preceding administration. The crop he raised was the natural product of a soil impoverished by past excesses, the dividends were rapidly reduced, because they had previously been improperly puffed out, and the discounts, as well as the circulation of the bank, were brought within bounds which were suitable to the extent of its capital. The speculatists, who had gleaned from the harvest Mr. Jones had sown the monstrous fruits and the gaudy flowers which his system of stimulants had forced out, were unable to content themselves with the homely crops which were raised under a more prudent management; and in 1823, disgusted with the opposition he had felt, and the ingratitude he had experienced, Mr. Cheves left his seat as President and Director. The measures which had been concerted became ripe the moment that action had arrived. Mr. Biddle mounted into the vacant chair with a reputation, that had arisen

rather from his personal bearing than his actual achievements, and received from his predecessor the books of the institution, untrammelled by the confused accounts and the gross errors with which, under the first two years of its history, it had been encumbered. There is a species of self-complaisance, which, though it is rarely the accompaniment of profound judgment, is often regarded as its index and its evidence. The dial-plate of the understanding is more significant to the eyes of a great many, if it has lost the hands which can point out the operations of the machinery below. To deny the peculiar capabilities of a man who preserved for sixteen years a command so perfect over a body of men, so respectable as the directors of the Bank of the United States, would be futile. Mr. Biddle during his presidency exhibited every qualification that could fit him for his office, except the prudence and integrity which had been the characteristics of his immediate predecessor. He puffed out the drooping dimensions of the stock till it reached its original rotundity. It had been as high as 150, when under the nursing care of Mr. Jones; it had fallen to 90, when brought back again by Mr. Cheves to its proper soil; but as soon as the new president had taken his seat, it started up again to a height which rivalled its former greatness. Mr. Biddle was hailed before long from all quarters, as the resuscitator of the country's commerce. There were but few who withheld their tribute from the monarch of the generation. The wise men of the East, the bankers of New England, who had stood unchanged in their stern independence during the wild administration of Mr. Jones, were unable to resist the genial influence of the star that beckoned them to throw their treasures at the feet of the new financier. The South flung forth her staples through her swarthy rivers, and opened her rice swamps, her cotton brakes, and her tobacco fields to the speculator who could afford them so good a market. Temporary success on the one side, was followed by unqualified subservience on the other; and through the homage that was thus given in, the conqueror himself became intoxicated, and fell into a dizziness which obscured to him both the maxims of honor and the laws of honesty. From the prudent restrictions of Mr. Cheves, the bank was forced into a system of high pressure management, which carried it along with a rapidity for which its strength was but little calculated. The disease was aggravated by the irregular treatment with which it had been

1841.] Bank of the United States and its Presidents. 13

met. Alternately in the hands of quacks and of legitimate practitioners, reduced by the loose prescriptions of Mr. Jones to disorders from which it recovered only by the rigid remedies of Mr. Cheves,-passing again, as soon as its health was in a measure restored, to the experimental treatment of Mr. Biddle, it has sustained a series of disasters which have been the more extended from the nursing, which in the interval between them its vitality had undergone. On the day of the election of Colonel Drayton, the bank stock stood at its lowest pitch, the bank credit was exhausted, its name was ruined abroad and dishonored at home, and nearly two thirds of its capital was destroyed. If a statesman, whose past life had been unstained, not only in its political but in its individual relations, and whose ability was as acknowledged as his integrity was undoubted,whose name had remained pure in the fierce arena of politics, or rather, who had passed through the fiercest contest which since the formation of the government that arena had witnessed, with his chariot wheels unspotted, — who had placed himself so far above sectional and temporary interests, as to scorn the highest offers they could bring when in comparison with the good of his country, if such a man had been called to the reins of the bank when it was at the height of its speed, its movement might have been checked and its ruin prevented. But Colonel Drayton became president when the bank was lying in the amphitheatre crushed and broken. His duty was to collect its fragments, and not to direct its course. With his presidency the history of the bank as a general institution may be said to close; and if it survives the shock which the exhibition of its true condition has given it, it will survive under a reduced capital and another name.

"I look," said Montaigne, "upon the too good opinion that a man has of himself, to be the nursing mother of the falsest opinions both public and private." That Mr. Biddle, to return to the point to which this division of the subject is directed, owed a large portion of his errors to the evils of a system, that placed him without control at the head of a vast monied establishment, may be readily admitted. He considered himself, as was remarked by the Investigating Committee in their last report, as the bank personified. When the charter of the institution was before the Legislature of Pennsylvania, the provision, common to all the other banks, authorizing the Legislature to repeal or to amend, was at first inserted. "I then declared,"

says Mr. Biddle in his second letter," that I would not receive it on such terms, and unless that provision was stricken out, the bill need go no farther. Accordingly it was stricken out.' It is not only in obtaining the charter alone, that the master hand confesses its potency, but it has been equally free to acknowledge its influence on the internal concerns of the institution. "Had I occupied the position which I once did," he says in another letter, in relation to the resumption in January 1841, "I would not have permitted that resumption." "The first I took in hand myself," he remarks in another instance, when speaking of the aid given in 1837 to two large houses, "making the necessary advances to carry them through their troubles, and they were accordingly saved. With the house of Thomas Biddle and Co. I would not interfere, but I requested a committee to examine their affairs, and if they thought it expedient, I would consent to it." When in examination before a committee of the United States House of Representatives in 1832, Mr. R. M. Whitney stated that he had discovered a gross irregularity in the transactions of the bank in its loan department, and that he had reported the same to Mr. Biddle, Mr. Biddle replied, not by a confutation of the main items of the fact, but by remarking that the conduct imputed to him "was inconsistent with my character," and that "he would have sooner sunk into the earth than have dared to come to me with such a remonstrance."*

Had the assumptions of the late president of the Bank of the United States been as empty as those of the African Satrap who claimed dominion over the planet Mars, they would have been unworthy of notice. But presumptuous as they are, they are based on what actually was the case. The fol

* Whitney's Memorial, p. 20. Washington, 1832. The first steps in the loans to the Philadelphia and Baltimore Rail Road Company, and in the Cotton investments, most unlucky speculations into which the Bank was led, developed :

The Philadelphia and Baltimore Rail Road.

two of the are thus

"In my zeal to promote the objects of improvement, I determined some years ago with one or two public-spirited gentlemen, that there should be made a Rail Road between Philadelphia and Baltimore. A large portion of the funds were borrowed from the Bank; and with a view to ensure its completion, I became personally the guarantee to