wholly valueless. The first thing for the bank was to clear the field of the worthless stuff encumbering it by assisting such banks as were solvent, time being given, and by driving those insolvent out of existence by supplying a sound currency adequate to the wants of the people who always prefer the best instruments to given ends. It began its operations by assuming, by the permission of the National Government, balances to the amount of $10,804,112, due from the State banks to it, allowing long credits therefor. In its efforts to restore the currency it made, as was inevitable, heavy losses on every side, one of $1,600,000 by the mismanagement of the Baltimore branch. Upon the tumultuous sea upon which the new institution embarked, it barely escaped disastrous shipwreck. So excessive were its losses that for the first thirteen years of its existence its dividends averaged only 4.88 per cent., against nearly twice that rate by the first bank, which, when it began its operations, had a clear field before it. It was not until 1820 that affairs in the Northern and Eastern States were substantially restored. In the Southern States a large number of banks were still unable to resume. These were forced out of existence as soon as the national one was able, through its branches, to supply a currency adequate in amount, and of the value of coin.

In 1811 eighty-eight State banks were in operation, having a capital of $42,610,605, and a note circulation of $22,700,000. The deposits, not given in Mr. Gallatin's "Considerations on the Currency," our only source of information, did not probably exceed $7,000,000, the total of the two being about $30,000,000. In 1820 the number of banks was 307, the nominal capital of which equalled $102,110,611, their notes in circulation equalling $40,641,574. A great number of these were subsequently wound up. The issues of those that weathered the storm did not probably exceed $40,000,ooo, an amount only $10,000,000 greater than that of 1811. The increase of the currency from $30,000,000 in 1811 to $200,000,000 in 1816, and its reduction to $40,000,000, before order was fully restored, were attended by disasters which can only be imagined, not expressed. If the National Government from a disordered currency, in transactions equalling nominally $80,000,000, made a loss of $46,000,000, how vast must have been those of the people, with transactions a hundredfold greater! The value in coin of the merchandise and service received by it, $34,000,000, was a trifling sum

to be taken in the form of domestic products for the purchase of which the notes received were used. Had the bank been in existence such products could have been far more easily reached by a currency purely symbolic, consequently of the value of coin, than by one greatly inflated, as with the former the industries of the country would have remained undisturbed, while the people, from the sense of patriotism which was aroused, would have promptly anticipated every want of the Government. A vicious currency so impaired the vigor and energy, as well as the morale, of the people, that the period between the two banks was one of the most disastrous and discreditable in our history. Had there been no break between them there would have been no suspension of specie payments, and none of the terrible disasters that followed. Such was the deliberate judgment of Mr. Gallatin, Secretary of the Treasury from 1802 to 1814 continuously, a most competent authority. In his "Considerations on the Currency" he said:

We have stated all the immediate and remote causes within our knowledge which concurred in producing that event [the suspension of the specie payments]; and although the effects of a longer continuance of the war cannot be conjectured, it is our deliberate opinion that the suspension might have been prevented, at the time when it took place, had the former Bank of the United States been still in existence. The exaggerated increase from 88 to 260 of State banks, occasioned by the dissolution of that institution, would not have occurred. That bank would, as before, have restrained within proper bounds, and checked their issues; and, through the means of its offices, it would have been in possession of the earliest symptoms of the approaching danger. It would have put the Treasury Department on its guard; both acting in concert would certainly have been able at least to retard the event; and, as the treaty of peace was ratified within less than six months after the suspension took place, that catastrophe would have been altogether avoided.

We have already adverted to the unequivocal symptoms of renewed confidence shown by the rising value of bank notes, which followed the peace. This would have greatly facilitated an immediate resumption of specie payments, always more easy, and attended with far less evils, when the suspension has been of short duration. The banks did not respond to that appeal made by public opinion; nor is there any evidence of any preparations, or disposition on their part, to pay their notes in specie, until after the act to incorporate the new Bank of the United States had passed.' — Considerations on the Currency, p. 46.

1 In his "Considerations on the Currency" Mr. Gallatin gave the names of 165 banks which failed, chiefly in the period that immediately followed the attempt to resume specie payments.

Order restored, the country again entered upon a period of prosperity, which rivalled that which had prevailed throughout the whole period of the first bank, the currency being perfectly adapted in amount and kind to the wants of the people.

In 1828 General Jackson was elected to the Presidency. In his first annual message, December 8, 1829, he referred to the bank in the following terms:

The constitutionality and expediency of the law creating the Bank of the United States are well questioned by a large portion of our fellow-citizens, and it must be admitted by all that it has failed in the great end of establishing a uniform currency.

The assault of General Jackson upon the bank came upon the nation like a clap of thunder from a clear sky. The language of a madman, it was received with amazement rather than indignation. Under the two banks the country had enjoyed the priceless boon of a currency perfect in its kind, by means of which capital had been almost wholly discharged from the exchanges-a currency the nominal value of which always measured that of the subjects, whether domestic or foreign, of consumption, and with which no considerable balances to be paid in coin could arise either in foreign or domestic trade. The sentiment everywhere in reference to the bank was one of profound satisfaction and content.

Not a moment was lost in reply. On the 10th of March, so soon as it could be appointed, that part of the message relating to the bank was referred to the Committee of Ways and Means of the House, consisting of Mr. McDuffie, of South Carolina, Chairman ; Mr. Verplanck, of New York; Mr. Dwight, of Massachusetts; Mr. Smyth, of Virginia; Mr. Ingersoll, of Connecticut; Mr. Gilmore, of Pennsylvania, and Mr. Overton, of Louisiana. On the 10th of April following, the committee submitted an elaborate and unanimous report in which it considered chiefly two questions — 1st, Has Congress the power to incorporate such a Bank of the United States? and, 2d, Whether it is expedient to establish and maintain such an institution? In support of the constitutionality of the bank the committee, among other things, said:

If the concurrence of all the departments of the Government at different periods of our history, under every administration, and during the ascendency of both the great political parties into which the country was divided soon after

the adoption of the present Constitution, shall be regarded as having the authority ascribed to such sanctions by the common consent of all well-regulated communities, the constitutional power of Congress to incorporate a bank may be assumed as a postulate no longer open to controversy. In little more than two years after the Government went into operation, and at a period when most of the distinguished members of the Federal Convention were either in the executive or legislative councils, the Act incorporating the first Bank of the United States passed both branches of Congress by large majorities, and received the deliberate sanction of President Washington, who had then recently presided over the deliberations of the convention. The constitutional power of Congress to pass the Act of Incorporation was thoroughly investigated, both in the executive Cabinet and in Congress, under circumstances in all respects propitious to a dispassionate decision. There was at that time no organization of political parties; and the question was, therefore, decided by those who, from their knowledge and experience, were peculiarly qualified to decide correctly, and who were entirely free from the influence of that party excitement and prejudice which would justly impair, in the estimation of posterity, the authority of a legislative interpretation of the constitutional charter. No persons can be more competent to give a just construction to the Constitution than those who had a principal agency in framing it; and no administration can claim a more perfect exemption from all those influences which sometimes pervert the judgments even of the most wise and patriotic, than that of the Father of his Country during the first term of his service.

In less than two years after the expiration of the charter, the war with Great Britain having taken place in the meantime, — the circulating medium became so disordered, the public finances so deranged, and the public credit so impaired, that the enlightened patriot, Mr. Dallas, who then presided over the Treasury Department, with the sanction of Mr. Madison, and as it is believed every member of the Cabinet, recommended to Congress the establishment of a National Bank, as the only measure by which the public credit could be revived and the fiscal resources of the government redeemed from a ruinous and otherwise incurable embarrassment; and such had been the impressive lesson taught by a very brief but fatal experience, that the very institution which had been so recently denounced and rejected by the Republican party, being now recommended by a Republican administration, was carried through both branches of Congress as a Republican measure by an overwhelming majority of the Republican party. It is true that Mr. Madison did not approve and sign the bill which passed the two Houses, because it was not such a bill as had been recommended by the Secretary of the Treasury, and because the bank it proposed to create was not calculated, in the opinion of the President, to relieve the necessities of the country. But he premised his objections to the measure "by waiving the constitutional authority of the Legislature to establish an incorporated bank, as being precluded, in his opinion, by repeated recognitions, under varied circumstances, of the validity of such an institution, in Acts of the legislative, executive, and judicial branches of the government, accompanied by indications, in different modes, of a concurrence of the general will of the nation." Another bill was immediately introduced; and would, in all probability, have become a law, had

not the news of peace, by doing away with the pressure of the emergency, induced Congress to suspend further proceedings on the subject until the ensuing session. At the commencement of that session, Mr. Madison invited the attention of Congress to the subject; and Mr. Dallas again urged the necessity of establishing a bank, to restore the currency, and facilitate the collection and disbursement of the public revenue; and so deep and solemn was the conviction upon the minds of the public functionaries that such an institution was the only practicable means of restoring the circulating medium to a state of soundness, that, notwithstanding the decided opposition to all the State Banks and their debtors, — and, indeed, the whole debtor class of the community, the Act incorporating the present Bank of the United States was passed by considerable majorities in both branches of Congress, and approved by Mr. Madison.

In reference to the question of the expediency of the bank, the committee said:

The question really presented for determination is not between a metallic and a paper currency, but between a paper currency of uniform value, and subject to the control of the only power competent to its regulation, and a paper currency of varying and fluctuating value, and subject to no common or adequate control whatever. On this question, it would seem that there could hardly exist a difference of opinion; and that this is substantially the question involved in considering the expediency of a national bank will satisfactorily appear by a comparison of the state of the currency previous to the establishment of the present bank and its condition for the last ten years.

Human wisdom has never effected, in any other country, a nearer approach to uniformity of the currency than that which is made by the use of the precious metals. If, therefore, it can be shown that the bills of the United States Bank are of equal value with silver at all points of the Union, it would seem that the proposition is clearly made out that the bank has accomplished the great end of establishing a uniform and sound currency. It is not denied that the bills of the mother bank, and of all its branches, are invariably and promptly redeemed in specie whenever presented at the offices by which they have been respectively issued, and at which, upon their face, they purport to be payable. Nor is it denied that the bills of the bank, and of all its branches, are equal to specie in their respective spheres of circulation.

But it is impossible to exhibit anything like a just view of the beneficial operations of the bank without adverting to the great reduction it has effected, and the steadiness it has superinduced in the rate of the commercial exchanges of the country. It has been already stated that it has saved the community from the immense losses resulting from a high and fluctuating state of the exchanges. It now remains to show its effect in equalizing the currency. In this respect, it had been productive of results more salutary than were anticipated by the most sanguine advocates of the policy of establishing the bank. It has actually furnished a circulating medium more uniform than specie. This proposition is susceptible of the clearest demonstration. If the whole circulating