sell any part of the securities of which its capital was composed, but was not allowed to purchase any kind of public debt whatever. Its notes were not made legal tender, but were receivable in the payment of the revenues, of which it was at the same time made the depository. The Act also provided that" said corporation shall not, directly or indirectly, deal or trade in any thing except bills of exchange, gold or silver bullion, or in the sale of goods really and truly pledged for money lent, and not redeemed in due time, or of goods which shall be the produce of its lands; neither shall the said corporation take more than at the rate of six per centum per annum for or upon account of its loans or discounts. No loan shall be made by said corporation for the use, or on account, of the government of the United States, to an amount exceeding $100,000; or of any particular State to an amount exceeding $50,000; or of any foreign prince or State, unless previously authorized by a law of the United States." Provision was made in the bill for the establishment of eight branches: one at Boston, with a capital of $700,000; one at New York, with a capital of $1,800,000; one at Baltimore, with a capital of $600,000; one at Washington, with a capital of $200,000; one at Norfolk, with a capital of $600,000; one at Charleston, with a capital of $600,000; one at Savannah, with a capital of $500,000; and one at New Orleans, with a capital of $300,000. The balance of the capital, $4,700,000, was assigned to Philadelphia, where the Bank was to have its chief office.

The Act, like every thing that came from the hand of its author, was a masterpiece of its kind. It might, indeed, serve as a model for all countries and all times. All its provisions were perfectly adapted to their object, the creation of a symbolic currency, by means of which the revenues of the government could be collected and disbursed, and the exchanges effected, without the interposition of coin. The notes of a government made receivable in the payment of the revenues, and bearing a proper proportion thereto, might, without any other provision for their redemption, maintain themselves at a high value for the uses they would serve. The taxes to be paid in them would be the constituent provided for their discharge. As, however, such notes would always be without a constituent in

merchandise, and as there would always be a tendency to issue them in excess of the revenues presently falling due, they might, and often would, become disturbing elements in the business operations of the country. The notes of a Bank symbolizing merchandise could be liable to no such objection. There could be no excess, while the use of such notes in the payment of the revenues would greatly strengthen the institution issuing them. A panic affecting the general credit could exert very little influence in causing the notes receivable for revenues to be returned for coin; for the reason that, whatever the value of their constituent either in coin or merchandise, so long as they were so receivable their holders would, as a rule, have no inducement to return them. There is the same reason that the revenues of government should be paid in symbolic money as that the exchanges of the public should be made by means of it. The parties to whom it is paid will, as a rule, wish to use it as money; and, if it represent what they have occasion to purchase and consume, it will be preferred to coin. The interest payable on the public debt should, so far as the government is concerned, be always paid or provided for in symbolic money. If payable abroad, it will, in fact, be paid in great measure in merchandise. Those who are to receive it, if paid in coin, will immediately seek to expend it for merchandise, perhaps of the very kind which the paper money of the indebted nation symbolized. For such payments, therefore, merchandise will serve as well as coin. Those made by nations not producing gold and silver must, from necessity, be paid in it; the mode of payment by government being the use of merchants' or bankers' bills representing merchandise. The exports of a people, therefore, not producing metallic money, must exceed their imports by the amount of the annual payments they are compelled to make not arising out of commercial transactions. All that a government indebted abroad has to do is to provide itself with symbolic money, as its issuers must supply to it whatever will discharge its indebtedness wherever it may exist.

Such were the financial measures provided for the nation at the very beginning of its career, measures as perfect as could be provided by the hand of man, and equally adapted to all conditions and all times; and such are some of the services Ham

ilton rendered to his country. With the Bank of England as an example, that created by him was a vast improvement upon the model. The latter, in theory at least, cannot convert that part of its capital represented by the public debt. A large portion of its means, consequently, are not available when most needed. If, instead of this stock, it held a corresponding amount of good bills, it would be absolutely beyond the reach of harm; the causes or occasions of the monetary crises now so frequently happening could not exist. They did not exist until after the Bank got into the clutches of the government, -an embrace, unfortunately, as advantageous to it as it is disastrous to the general welfare. The government is too good a customer not to be preferred to the public. The Bank of the United States was wholly free from such an entangling alliance. After its organization, it speedily converted its government debt into money, and consequently had at all times its capital in hand. As a consequence, the period of its existence was the brightest one in the whole financial or monetary history of the country. It was the Golden Age, soon to be overwhelmed by one of barbarism, which in its ignorance, intolerance and ferocity, carries us back a thousand years.

At the time the first Bank went into operation, there were only three State Banks, the Bank of North America, at Philadelphia; the Massachusetts Bank, at Boston; and the Bank of New York, at New York City. The aggregate capital of these, when organized, equalled $1,650,000. In 1792, the number of State Banks had increased to eleven, with an aggregate capital of $8,935,000. In 1801, the number had increased to thirty-two, whose joint capital equalled $23,500,000. In 1805, there were seventy-five State Banks, with a capital of $40,493,000,- an amount exceeding four times the capital of the United States Bank. The excellence of the system of Hamilton was, that while it created a Bank whose operations extended to every part of the country, and by means of which the revenues were collected and disbursed, it allowed the creation of State or local Banks, by means of whose issues the greater part of the exchanges must always be effected. The system was ideally as well as practically perfect in all its parts. A currency adapted to local exchanges must be locally supplied, for the reason that it can be properly issued only by parties

possessing a competent knowledge of the means and character of the applicants for loans. It will yet be found that the only possible mode of retrieving our condition, and securing a currency uniform in amount and value, will be a return to the financial system of Hamilton; just as a return to the maxims and policy of Washington will be the only safe guarantee for the domestic peace and order of the country.

The approval of the Bank by all the departments of government, and by the Supreme Court as soon as the question could be presented to that tribunal, only served to increase and imbitter the hostility of Jefferson to a construction so opposed to all his theories, and, in his estimation, so fraught with danger to that portion of the country with which, not only as a citizen, but from his training, habits, and ideas, he was so closely identified. The Bank, indeed, seemed beyond his reach. To claim such a measure as this to be sufficient ground for breaking up the government would only expose him to ridicule and contempt; and he patiently bided his time. This was not long in coming. Washington in due time was succeeded by Mr. Adams, whose great personal unpopularity exposed him to constant and virulent attacks from newspapers and foreigners in the interest of France. To protect him, as well as the government, were passed the famous "Alien and Sedition Laws," enacted to punish libellers, and foreigners who used the asylum offered by the country for the purpose of embroiling it in war. The laws were very probably illadvised and inopportune, although Washington did not so regard them. They were Jefferson's great occasion. In opposition to them, he immediately drafted the celebrated resolutions which were passed by the legislature of the State of Virginia in 1798, and by that of Kentucky in 1799; and which, among other things, declared:

"That the several States composing the United States of America are not united on the principle of unlimited submission to their general government, but that, by a compact under the style and title of the Constitution of the United States, and of amendments thereto, they constituted a general government for special purposes; delegated to that government certain definite powers; reserving, each State to itself, the residuary measure of right to their own self-government; and that, whensoever the general government assumes undelegated powers, its acts are unauthoritative, void, and

JEFFERSON'S CONSTRUCTION OF THE CONSTITUTION.

477

of no force; that to this compact each State acceded as a State, and is an integral party: that the government created by this compact was not made the exclusive or final judge of the extent of the powers delegated to itself, since that would have made its discretion, and not the Constitution, the measure of its powers; but that, as in all other cases of compact among parties having no common judge, each party has an equal right to judge for itself, as well of infractions, as of the mode and measure of redress, and that a nullification by those sovereignties of all unauthorized acts done under the color of that instrument is the rightful remedy."

These resolutions embodied in a most complete and perfect form Jefferson's construction of the Constitution as opposed to that of Hamilton, who insisted that it united the people not as a confederacy, but as a nation. They took the whole question out of the arena of the National Legislature and of the courts, and submitted it to the opinions and judgment of the whole people; by whom, or by a great majority of whom, at least so far as their decision could be gathered from the expressions of their popular assemblies, they were accepted as the cardinal rule for the construction of the Constitution, and as justifying the destruction of the government, whenever it should suit the interest or caprice of any member of it.

It will be proper in this connection to consider further the opinions upon government, and upon the nature of our own, of this extraordinary man, who exerted such a paramount and baleful influence over the nation for the first hundred years of its existence. He was, in fact, opposed to all governments worthy the name. No one had the natural right to bind any generation not a party to it.

"Can," he said, "one generation bind another, and all others, in succession for ever? I think not. The Creator has made the earth for the living, not the dead. Rights and powers can only belong to persons, not to things, not to mere matter, unendowed with will. The dead are not even things. The particles of matter which composed their bodies make part now of the bodies of other animals, vegetables, or minerals, of a thousand forms. To what, then, are attached the rights and powers they held while in the form of men? A generation may bind itself as long as its majority continues in life; when that has disappeared, another majority is in place, holds all the rights and powers their predecessors once held, and may change their laws and institutions to suit themselves. Nothing is unchangeable but the inherent and inalienable rights of men."1

1 Letter to Major Cartwright, Jefferson's Works, vol. vii. p. 359.