Its The preceding extracts are given not so much to be replied to as by way of illustration of the manner in which our people have been swayed by demagogues, of whom General Jackson was the conspicuous example. One form of currency was bills serving in the place of metallic money for the transfer of merchandise, in gross. To these certainly no objections could be raised. The notes and credits of banks issued in their discount served for its transfer from merchant to consumer. The two forms of credit discharging capital from the exchanges were precisely the same in kind. None other will ever be used in commercial countries like the United States as the ordinary instruments of exchange unless it be an imposed one of government notes, but in such case the issues of banks and bankers will equal in nominal amount the value of the subjects of consumption, the imposed one being wholly superfluous. When a bill is drawn the first step of the holder is to apply to the banks, not to the government, to turn it into money. Government is never present in such transactions as these. issues are made for the acquisition of capital for consumption, not primarily as instruments of distribution. There could, at the time, have been no monopoly of issue, as charters for banks were always to be had for the asking. That there was no monopoly was well shown by the fact that from 1830 to 1837 the number of banks increased from three hundred and twenty-nine to seven hundred and eighty-eight; their share capital, from $145,192,268 to $290,772,091; their loans and discounts from $200,451,214 to $525,115,702; their notes and deposits from $116,883,826 to $276,583,075. As the veto of 1832 was conclusive of the fate of the bank its interest for the maintenance of a sound currency was of course greatly weakened. Up to 1834 the State banks were able to provide for the balances found against them. From the removal of the deposits in that year, the revenues being paid into and held by the "Pet Banks," all control over the currency from any quarter was at an end, all the banks vying with each other in the amount of their loans and issues.1 "That the reader," says Parton, "may see the movements of this gentleman (Isaac Hill) as they appeared to General Jackson, and that he may fully understand the process by which the administration was brought into collision with the parent bank, I will present here a brief condensation of the papers and letters relating to the Portsmouth affair, in the order in which they were produced. The great mission, in his own words, of General Jackson was the "restoration of the money, gold and silver, of the Constitution." The necessary effect of every step he took in his work of restoration was to drive gold and silver out of circulation and to substitute in their place vast issues of the rottenest monetary system ever created. Having accomplished the great work of his life he prayed that, "broken with the cares of the State which he had so long and faithfully served, he might at last be allowed to depart in peace." Hardly were the words of his " Farewell Address " out of his mouth when, early in May, 1837, came the inevitable and terrible explosion, the suspension of specie payments by all the banks, to be followed by a process of liquidation so severe that six years elapsed before the country was again fairly on its feet. The process went on until in 1843 the notes of the banks were reduced from $149,185,890 in 1837 to $58,563,608; their deposits from $127,397,185 to $56,116, 623; the aggregate of the two in 1843 being $114,680,231, a sum $161,902,844 less than the aggregate for 1837, and $2,203,495 less than that for 1830. At the rate of increase, forty-five per cent., from 1820 to 1830 the amount of notes and credits of the banks The correspondence began in June and ended in October. I believe myself warranted in the positive assertion, that this correspondence relating to the desired removal of Jeremiah Mason was the direct and real cause of the destruction of the bank. If the bank had been complaisant enough to remove a faithful servant, General Jackson, I am convinced, would never have opposed the rechartering of the institution." — Life of General Jackson, by James Parton. Vol. III., page 260. An earlier affront, undoubtedly, still rankled in General Jackson's bosom. "An incident," to quote further from Parton, "occurred during the stay of General Jackson at New Orleans, which was afterwards supposed to have made a lasting impression upon his mind, and to have been a remote cause of important events. He came into collision with the Bank of the United States. Desiring to take with him to Florida a sum of money, with which to defray the first expenses of organizing his government, he sent an aide-de-camp to the branch of the United States Bank at New Orleans to learn whether the bank would advance ten or fifteen thousand dollars on a draft to be drawn by General Jackson upon the Department of State. The messenger returned with the reply that the branch bank had no authority to advance money upon drafts. The mother bank, said the cashier, had expressly forbidden him to negotiate drafts. The aide-de-camp remonstrated, and pointed out the inconvenience that might result from the refusal; but the cashier was immovable, as he was bound to be." — Ibid. II., p. 596. Vol. in 1837 would have equalled $152,000,000, a sum $124,000,000 less the amount of that year. At the same rate of increase their notes and credits would, in 1840, have equalled $169,443,826, and in 1 Statement showing the Number, Amount of Share Capital, Loans and Discounts, Note Circulation, and Deposits of the Banks and Branches of the same, and the Value of Imports and Exports of the United States, from 1830 to 1845, inclusive. YEARS. Number Share Loans and Note 1830.. 1833.. 506 1834.. 699 1835.. 713 1836.. 788 1837.. S29 183S.. 840 1839.. 860 1840.. 861 1S41.. 784 1842.. 692 1843.. 691 1844.. 696 1845.. 707 330 Imports. Exports. $145,192,268 $200,451,214 $61,323,928 $55,559,928 $70,876,920 $73,849,508 228,861,948 264,905,814 75,167,646 84,550,785 86,338,398 112,461,973 1843, $194,944,826, a sum $80,000,000 greater than the amount then outstanding. It was not until 1851, eighteen years after the tide turned in 1843, that the notes and credits of the banks exceeded the aggregate for 1837, the amount for 1851 being $284,122,883, of which $155,165,281 were notes, and $128,957,602 were deposits. The country was in a far worse condition in 1843 than in 1830. For thirteen years instead of progress there was a steady retrocession, not only in its material but in its moral welfare, a strange spectacle for the "Model Republic." The disasters from the occupation and ravage of every section of the country by a foreign foe could not have exceeded those which resulted from Jackson's experiment for the "restoration of the money of the Constitution." Strange to say, the author of the disasters described has always remained the idol of the nation to the undoing of which, as far as was possible, he was the chief instrument, for the War of the Rebellion, as well as the worst currency possible, of debt instead of capital, with all the terrible calamities which followed, were the direct result of the overthrow by him of the authority of the Supreme Court, which, instead of a loose confederacy, dissolvable upon the motion of any member, had declared us to be a nation, competent to deal with all matters that concerned its existence, as well as the common welfare. The preceding statements, so far as the bank is concerned, are compiled from the reports of the department of the Treasury, entitled "State Banks of the United States." After 1837 returns appear to have been made by great numbers of banks which had discontinued business, years being required to wind up their affairs. The great disaster of 1837 by no means put an end, as has been shown, to the creation of new banks, mostly of small capital, in the rural districts. In 1841 a bill passed both houses of Congress for the creation of a third National Bank. It was vetoed by Mr. Tyler, a pronounced "States' rights" man, whom the Whigs, for the purpose of uniting all elements in opposition to Mr. Van Buren, had nominated for the vice-presidency, and who became president upon the death of General Harrison. From its defeat no other proposition for any National Bank was ever made. Mr. Van Buren, who, March 4, 1837, succeeded General Jackson in the presidency, pledged to walk in his footsteps, was, up to the great explosion, as unconscious as his illustrious predecessor of the volcano beneath his feet. He woke up one morning, to use the language of Mr. Benton, "with large balances on its books in favor of the Government, but without the means of paying a day's wages to the meanest official in its service," except in the notes of the broken State Banks. An issue of treasury notes to tide over the immediate necessities of the government was made with all speed. The next and obvious step would have been the restoration, following the example of 1816, of the currency by the creation of a third National Bank. That it was not taken was due to the fact that in the period which had elapsed from the creation of the Second Bank the South had learned a new lesson, that she was being rapidly outstripped by the North in numbers and wealth from the exercise by Congress of implied powers, the most obvious example being legislation for the encouragement of domestic industries in which, from the ignorance and poverty of her people, she could not engage. The North cheerfully paid protective duties, domestic markets being thereby created for her products. To the South, which had no industries to protect, the duties levied were taxes imposed upon one section of the country for the benefit of another, and, consequently, unconstitutional, there being no direct warrant therefor. By a necessary inference an act, being the exercise of implicit powers, for Every exercise of the creation of the bank was unconstitutional. implied powers was unconstitutional, as it inured to the benefit of one section at the expense of another. If a state or political body was competent to declare the meaning of the Constitution it was competent to enforce its meaning. Such was the objection to implied powers, their exercise being unconstitutional, to be resisted by force by those assumed to be injured by them. But where were the North and East when a construction of the Constitution, so destructive to their welfare, was established as the law of the land? - Sold out to South Carolina and her sister States, immunity for their peculiar institution being the consideration on one side, and official stations and public plunder to the contingent of northern mercenaries ever ready to assail the Government and social order for a mess of pottage, on the other. The very elements and conditions upon which a government worthy the name must rest for support were overthrown, our own being reduced to a condition of complete imbecility. Jackson taught the doctrine that each individual was to determine |