The banks in England suspended in 1797 – they broke in 1825; in the United States it was a suspension during the war, and a breaking in 1819-20. So it may be again with us. There is imminent danger to the resuming banks, without the pressure of premeditated hostility; but, with that hostility, their prostration is almost certain. The Bank of the United States can crush hundreds on any day that it pleases. It can send out its agents into every State of the Union, with sealed orders to be opened on a given day, like captains sent into different seas; and can break hundreds of local banks within the same hour, and over an extent of thousands of miles. It can do this with perfect ease – the more easily with resurrection notes – and thus excite a universal panic, crush the resuming banks, and then charge the whole upon the government. This is what it can do; this is what it has threatened; and stupid is the bank, and doomed to destruction, that does not look out for the danger, and fortify against it. In addition to all these dangers, the senator from Kentucky, the author of the resolution himself, tells you that these banks must fail again! he tells you they will fail! and in the very same moment he presses the compulsory reception of all the notes on all these banks upon the federal treasury! What is this but a proposition to ruin the finances – to bankrupt the Treasury – to disgrace the administration – to demonstrate the incapacity of the State banks to serve as the fiscal agents of the government, and to gain a new argument for the creation of a national bank, and the elevation of the bank party to power? This is the clear inference from the proposition; and viewing it in this light, I feel it to be my duty to expose, and to repel it, as a proposition to inflict mischief and disgrace upon the country.
But to return to the point, the contrast between the effects and events of former bank stoppages, and the effects and events of the present one. The effects of the former were to sink the price of labor and of property to the lowest point, to fill the States with stop laws, relief laws, property laws, and tender laws; to ruin nearly all debtors, and to make property change hands at fatal rates; to compel the federal government to witness the heavy depreciation of its treasury notes, to receive its revenues in depreciated paper; and, finally, to submit to the establishment of a national bank as the means of getting it out of its deplorable condition – that bank, the establishment of which was followed by the seven years of the greatest calamity which ever afflicted the country; and from which calamity we then had to seek relief from the tariff, and not from more banks. How different the events of the present time! The banks stopped in May, 1837; they resume in May, 1838. Their paper depreciated but little; property, except in a few places, was but slightly affected; the price of produce continued good; people paid their debts without sacrifices; treasury notes, in defiance of political and moneyed combinations to depress them, kept at or near par; in many places above it; the government was never brought to receive its revenues in depreciated paper; and finally all good banks are resuming in the brief space of a year; and no national bank has been created. Such is the contrast between the two periods; and now, sir, what is all this owing to? what is the cause of this great difference in two similar periods of bank stoppages? It is owing to our gold bill of 1834, by which we corrected the erroneous standard of gold, and which is now giving us an avalanche of that metal; it is owing to our silver bill of the same year, by which we repealed the disastrous act of 1819, against the circulation of foreign silver, and which is now spreading the Mexican dollars all over the country; it is owing to our movements against small notes under twenty dollars; to our branch mints, and the increased activity of the mother mint; to our determination to revive the currency of the constitution, and to our determination not to fall back upon the local paper currencies of the States for a national currency. It was owing to these measures that we have passed through this bank stoppage in a style so different from what has been done heretofore. It is owing to our "experiments" on the currency – to our "humbug" of a gold and silver currency – to our "tampering" with the monetary system – it is owing to these that we have had this signal success in this last stoppage, and are now victorious over all the prophets of woe, and over all the architects of mischief. These experiments, this humbugging, and this tampering, has increased our specie in six years from twenty millions to one hundred millions; and it is these one hundred millions of gold and silver which have sustained the country and the government under the shock of the stoppage – has enabled the honest solvent banks to resume, and will leave the insolvent and political banks without excuse or justification for not resuming. Our experiments – I love the word, and am sorry that gentlemen of the opposition have ceased to repeat it – have brought an avalanche of gold and silver into the country; it is saturating us with the precious metals, it has relieved and sustained the country; and now when these experiments have been successful – have triumphed over all opposition – gentlemen cease their ridicule, and go to work with their paper-money resolutions to force the government to use paper, and thereby to drive off the gold and silver which our policy has brought into the country, destroy the specie basis of the banks, give us an exclusive paper currency again, and produce a new expansion and a new explosion.
Justice to the men of this day requires these things to be stated. They have avoided the errors of 1811. They have avoided the pit into which they saw their predecessors fall. Those who prevented the renewal of the bank charter in 1811, did nothing else but prevent its renewal; they provided no substitute for the notes of the bank; did nothing to restore the currency of the constitution; nothing to revive the gold currency; nothing to increase the specie of the country. They fell back upon the exclusive use of local bank notes, without even doing any thing to strengthen the local banks, by discarding their paper under twenty dollars. They fell back upon the local banks; and the consequence was, the total prostration, the utter helplessness, the deplorable inability of the government to take care of itself, or to relieve and restore the country, when the banks failed. Those who prevented the recharter of the second Bank of the United States had seen all this; and they determined to avoid such error and calamity. They set out to revive the national gold currency, to increase the silver currency, and to reform and strengthen the banking system. They set out to do these things; and they have done them. Against a powerful combined political and moneyed confederation, they have succeeded; and the one hundred millions of gold and silver now in the country attests the greatness of their victory, and insures the prosperity of the country against the machinations of the wicked and the factious.
CHAPTER XXII.
MR. CLAY'S RESOLUTION IN FAVOR OF RESUMING BANKS, AND MR. BENTON'S REMARKS UPON IT
After the New York banks had resolved to recommence specie payments, and before the day arrived for doing so, Mr. Clay submitted a resolution in the Senate to promote resumption by making the notes of the resuming banks receivable in payment of all dues to the federal government. It was clearly a movement in behalf of the delinquent banks, as those of New York, and others, had resolved to return to specie payments without requiring any such condition. Nevertheless he placed the banks of the State of New York in the front rank for the benefits to be received under his proposed measure. They had undertaken to recommence payments, he said, not from any ability to do so, but from compulsion under a law of the State. The receivability of their notes in payment of all federal dues would give them a credit and circulation which would prevent their too rapid return for redemption. So of others. It would be a help to all in getting through the critical process of resumption; and in helping them would benefit the business and prosperity of the country. He thought it wise to give that assistance; but reiterated his opinion that, nothing but the establishment of a national bank would effectually remedy the evils of a disordered currency, and permanently cure the wounds under which the country was now suffering. Mr. Benton replied to Mr. Clay, and said:
This resolution of the senator from Kentucky [Mr. Clay], is to aid the banks to resume – to aid, encourage, and enable them to resume. This is its object, as declared by its mover; and it is offered here after the leading banks have resumed, and when no power can even prevent the remaining solvent banks