Banks Banking

Niles’ Weekly Register

Baltimore, February 28, 1818.

Banks and Banking

We closed the 13th vol. or 1st of the new series of the Weekly Register on Saturday last, under a grateful sense of favors received, with an intimation that our attention would be directed to “the demoralizing and pernicious business of banking;  considering it as the Pandora’s box that is to fill the republic with all sorts of moral and political diseases.”

Awfully impressed with a conviction that the speculating mania, through banking establishments, has driven us to a crisis likely to be more redundant of evil than that which attended the depreciation and final extinguishment of value in the “continental money” of the revolution, and alarmed at the spread of the materiel to make the ruin more and more extensive –grieved, also, at the faint and timid opposition made to it by those who feel present oppression and look with horror at futurity, I feel it my duty to raise a feeble voice against it, and to tell the people plainly, from many facts that have reached me, that the most extensive and ruinous bankruptcies are about to take place amongst us that ever befell any people, unless a stand is taken against the band 0f speculators, who, from the misery of the useful classes, will take care to build up princely fortunes for themselves.  Without such a stand, bank after bank will go by the board;  and they who are in the secret will so manage it, as to throw the loss upon the honest and unsuspecting.

To prevent such a catastrophe is my object, in speaking thus openly on the matter.  I do not see any necessity that the banks should so fail, except through their own misconduct and partiality, in giving vast sums of money to a favored few, and grinding the face of the industrious and deserving classes of society.  It is lamentany the fact, that a speculator, in stock, goods or lands, is supplied with his thousands, tens of thousands, hundreds of thousands of dollars, and commands (too much) a continuance of his accommodations, whilst the middle class of regular traders, and the sinewy mechanics and manufacturers are squeezed for the little they have, and are denied an extension of further credit.

Here is the evil– one of the former fails –he “goes entirely to pieces,” and drags ten, twenty, fifty others with him, if not into bankruptcy at least into distress:  but the real wealth is in the latter classes —they are cautious to borrow because they intend to pay;  if they should fail, a large dividend prevents any great loss;  and, from the stock of labor in their own persons, those that are honest generally bring up lee-way.

My soul sympathises with the good man struggling against adversity:– how lovely, how interesting is it, to behold him, by “the sweat of his brow,” rearing a virtuous family to siren than and adorn his country !  A hundredth part of the bank-accommodation extended to one of these which is afforded to an individual drone (who in a whole year does not produce one cent of value to add to the national wealth) would “put him on his feet,” and open the way to competency, if not to independence.  And this might be done with the greater safety — but the banks do not like to be troubled with “small accounts;”  and, to use a homely saying, “the big fish must live upon the little ones.”

Lycurgus introduced iron money into Sparta to preserve equality amongst the citizens of that renowned republic —the opposite of his plan is the introduction, the excessive introduction, of paper money;  and its irremediable effect is— to build palaces and poor houses.  I would that both might be dispensed with !  Heaven forbid, that any man in the United States (as in England, the great country of paper) shall give a guinea for a peach, or two guineas for a pint of strawberries, and be able to afford it, whilst thousands, better than he, suffer for a morsel of the coarsest bread.  We wish a nation of high-souled free men —a race of independent men, jealous of their rights and ready to defend them from the result of their own reasonings.  Herein is safety.

The effect hoped for, in bringing the banks “before the bar of the public reason,” is that they may be induced, more or less, to abandon their present course, and cherish productive industry, rather than speculation.  They are fearfully powerful —but public opinion can put them down, and down they ought to go if they disregard the public interest.

As, whenever a man ventures to tell a reprehensive truth about banks, the “big little folks” and their underlings, proclaim him a disappointed man, vexed because banking favors have been refused to him, -—it may be necessary for me on the onset to declare, that I am as independent of the banks as they are of me –that I have not asked an thing of either of them for several years which has not been granted –feeling the force of the quaint saying, “blessed are they who expect nothing,” &c.  And, truly, I would rather be numbered among the slaves, the worse than our negro slaves, of “Alexander the deliverer,” than put my independence into the keeping of a board of bank directors –meeting 1n solemn conclave to build up or to destroy, as whim or speculation directs them.  I have felt the lash;  the wound is healed, but the mark remains.

The time was when to the name of a bank was associated the pleasant idea of an institution bottomed upon a solid capital, derived from individuals who had money to spare, and conducted by men of high and honorable minds, on just and liberal principles –extending fair commerce, encouraging honest agriculture, and supporting mechanical ingenuity and industry, with a steady hand.  I hope, notwithstanding the spread of the contagion, that there are yet some such banks;  and, certainly, to many persons interested in those institutions, such dignified ideas may yet be attached, but the common idea of a bank now is, that it has only a paper capital, manufactured by individuals who, instead of being able to lend, really want to borrow money, and conducted by men who prostrate every rule of right to subserve their own personal views.

The time, also, was, when the phrase, “as good as the bank,” was familiarly used to express an idea of the solvency of persons and of the value of things.  That phase has lost its point, and is exploded as obsolete;  and we have to apply to the broker and shaver to ascertain its meaning.  They are the chief lexiographers that treat of it now.

The honest patriotism of the people spontaneously burst forth to support the banks in a refusal to pay their debts during the late war, because it seemed that the country’s good required it.  Public opinion became paramount to the law of the land;  and those institutions were magnanimously and efficiently protected by it.  The deeply designing, the petit Castlreagh of our quarter of the world, fastened upon this good disposition and converted it in to a most powerful, an almost irresistable engine, to oppress and tyrannize over those that held it:  filling our cities and towns with a new breed of drones to wrest from the mouth of labor the bread it had earned.  This is not the first instance in which the generous intentions of a people have been used for iniquitous purposes — but so much have those intentions been abused, that many begin seriously to regret that the banks were permitted to suspend their payments, except as open and avowed bankrupts, to which should have been extended the same rules that they themselves apply to individuals, and which govern between man and man.

They regret it, because it was that which indicated every village in the United states, where there was a “church, a tavern and a blacksmith’s shop,” as a suitable site for a bank, and justified any persons in establishing one who could raise cash enough to pay the paper maker and engraver.  They regret it, also, because it has created a race of [now] very important men who deal in and share bank notes, as a regular business.  They regret it, because it encouraged speculation to enter even the forest and drive the husbandman from his home.  They regret it, because the end must be unparalleled bankruptcy and unprecedented distress, unless, as before observed, the people interpose and frown upon those that care not who sinks if they themselves keep above the surface;  who, indeed, sink others without mercy that they themselves may swim.  They regret it, because it has encouraged, and profited, a spirit that would penetrate interior Africa to tear the free-born infant from its mother’s breast and sell it for a slave, or enter into contract with the Enemy of souls to supply his dominions with fuel !

In every place where a money-shop, called a bank, is established, a knot of “little great men” is instantly formed, who withdraw themselves from the “vulgar,” and ape the manners of three-tailed bashaws, feeling themselves even superior of certain of their brother directors.  They meet each other and pass with a smile, as if they “knew something,” –whisper and look wise, as though the duration of the world depended on the result of their judgment;  and “tread the air,” seeming to think the earth too mean to touch the soles of their shoes.

At first they throw out money profusely, to all that they believe are ultimately able to return it;  nay, they wind round some like serpents to tempt them to borrows, and the bait is too greedily swallowed;  they then affect to draw in their notes, agreeing upon some tale to tell the public, but at the same time keep up, if they do not extend, accommodations to themselves;  money becomes scarce, and notes of hand are shaved by them to meet bank engagements;  it gets worse:  the consummation originally designed draws nigh, and farm after farm, lot after lot, house after house, are sacrificed: the floating wealth, if not the real property of a neighborhood, centres in a few, that some years before were hard put to it to live decently.  They mount their chariots, and look down upon the despoiled with ineffable disdain.

The effect in great cities is not so sudden, or at least so visible;  but it is not less sure according to the means afforded –for in these the director, &c. has to encounter more men as cunning as himself, and as well supplied with the means of giving it effect.  I have no design to localize these remarks, much less to say any thing personal, but we have ten banks in Baltimore, whose presidents, directors and officers amount to about 230 men.$  Let us look back a few years, and, in the mind’s eye, observe the progress of some of these to wealth; –enquiring, as we go along, what superior intelligence, industry or good fortune can have caused it ?  A few of them are of the old class of bankers –gentlemen who had money to spare when they entered into office, and amongst them are as good, as honest, and as valuable citizens as exist in the world –and there are others, differently situated, that are of the most honorable cast of character;  but some had no property to recommend them but intrigue and cunning, which are so artfully used as oftentimes to deceive and mislead the preceding into error — and there are not a few who are better fitted for any other place than a bank, because a just liberality and sound intelligence should govern at its board.  Yet all, or nearly all, of these are rich -—how did they become so ?  By urging measures at the board that threw the poor and needy into their power.  I could mention facts in support of this assertion that would almost make a man’s hair stand on end, and some of them may be stated when time has so far obliterated the recollection of persons as to secure my informants from the vengeance of the guilty.  For myself, I do not fear them:
________”Lay on Macduff,”
And we shall see —“who first cries hold, enough.”

$ Some of these gentlemen have no accommodations at all, but I feel justifed in saying that the regular and irregular accommodation of the rest amounts to not less than six millions of dollars;  perhaps, to a much larger sum, including certain things called stock notes, — more of which anon.  How then can we wonder that little folks are oppressed ?

What I have observed of Baltimore, applies, I believe, to every other place.  But the secrets of the banking-house are imperfectly known except to the initiated, and the “weak brother” is defended with more than Christian charity, by ways and means that the people have no idea of.

Before the suspension of specie payments, a sense of honor and a spirit of accommodation belonged to our banking institutions, generally, that now exists only in a few of them:  that fatal event seared the heart of many as to a sensibility, about meeting their engagements, and raised up an infernal spirit of speculation which has superceded regular trade, and is the ruling fashion of the day.  Who would “sweat and groan under a weary life” of business, when, by management [no matter who suffers!] an independent fortune may be realized in a few months ?  Hence, that which was designed for the public accommodation and a public benefit, is devoted to the purposes of a dozen or two, and society sustains its loss in proportion as their wealth is advanced;  for they fatten upon the productive labor of others, producing nothing themselves.

It is to the spirit just spoken of that we are to attribute the establishment of the bank of the United States (of which I shall speak hereafter) and the most of two hundred other banking institutions which have sprouted up within five or six years –whose effects have been more demoralizing than war, more terrible than pestilence;  substituting cunning for honest industry, and sweeping away whole families from the seats of their fathers.

But some say, if the people will have banks, let them have them.  If the people wish them, I shall not oppose them.  But the people (I speak generally, for banks may be useful and some are excellently located) have nothing to do with the matter — it rests with ten or twenty influential persons in a neighborhood, who blind the judgement and lead the mass astray.  The alleged illiberality of one bank oftentimes, too, affords a pretence for the establishment of another;  which, in less than twice twelve months, is as illiberal as the other, settling into a mere conduit of advantage to the directors and their favorites —then another bank is talked of, and so they go on, ad infinitum, heaping fuel to the flame –district of a town against district, county against county, village against village —shop against shop.

Every body sees these things, and their effects are universally deprecated, yet we submit like slaves, and lick the hand that smites us.  The despotism of banking will not allow the freedom of opinion, nor of the press.  It has dungeoned both in its vaults —and wo be to him that struggles to release himself !  If the press had dared to speak of banks and bank directors, as it finds freedom to do of other public matters and public men, the present state of things would not have existed, but the printer is significantly told by some great patron, that they must not be touched;  or, is himself so fettered that the existence of his establishment depends upon a non-resistance of evil.

My patron is the people at large;  and, blessed be Providence for it, those institutions have not any hold upon me.  If the first fails to support me, I have the pleasure to believe that I may yet preserve my independence from the keeping of the other.  But I am of opinion that the people are ripe for a stoppage of speculation, and that even those who have speculated, tremble as they look through the vista of time, and see the end of the bubbles they have raised.

The excuse that the managers of banks make for a monopoly of the funds, if they condescend to speak on the subject, is that they are their own, and that they may dispose of them as they please.  This is like the reason that “Peter the Great,” of Russia, gave for directing one of his subjects to be killed, because he wished to see how the man would die under certain operations —for he said “he is mine, and I may do with him what I like.”  But banks were designed for a public benefit, else they would not have been chartered, and such monopolies were not contemplated in their establishment, even by those, perhaps, who originated them, except in the case of the bank of the United States: which, I am clearly of opinion, was intended for a monopoly from the beginning and has already, every where, lost the goodwill of the people from evidences of the fact that it is so.

Bank of the United States.

An attempt is now making in congress to impair the chief things that any way tended to reconcile the people to the bank of the United States.

The multitude of banking institutions, and the uncertainty as to the genuineness of their notes, as well as that of their value, if genuine, made it desirable to have a currency which every man might know, and which should have an equal value in all parts of the union.  It was to have been expected that, for the incalculable advantages given by charter to the bank of the United States, it would have returned to the people these small accommodations.

But the exchange is not equalized, and it seems designed to convert that great establishment into a vast broker’s office, where money may be bought and sold as in the little shops that now abound in our country.  Already, an office at one place refuses to take the notes of an office at another, –in some, the disgraceful fact exists (or has existed) that premiums are charged for drafts on others;  at others the accommodation of drafts is refused (i.e. the equalization of exchange is denied) to any except those who keep their accounts, or do business, exclusively with such offices, to secure a monopoly: for which purpose they have “black lists,” referring to them to ascertain whether such facility may be granted or not.  Such reference has been made in Baltimore, and an application for a pitiful sum, in a draft on Philadelphia, refused –after an observation by a clerk, on looking at his alphabet, “you don’t keep your entire account here, and we reserve such things for our particular friends,” or words to that effect, thus defeating one great [apparent] object of the institution.  This seems to be a common case.  I have heard of a dozen in a day or two.

It is proposed in congress to alter the charter of the bank of the United States in such a manner as to permit its notes, issued at the several branches, to be signed by the presidents and cashiers of such branches, instead of the president and cashier at the mother bank.

The pretence is, that the labor of signing such notes is too great to be performed by two persons !  The effect will be, to keep up that uncertainty which exists in regard to the genuineness of bank notes;  for we shall have to make ourselves familiar with from 30 to 50 signatures of presidents and as many of cashiers, and a vast door will be opened to counterfeiters, also, to speculate upon and shave the public.

But, I believe, the design of the proposed alteration of the charter is to give the notes of the United States bank the appearance of distinct and separate characters, the more easily to reconcile the people to a refusal by certain offices to receive those of other offices; –for well do the “deep ones” who manage this bank know how easily the people are imposed upon by appearances –and they have cause to esteem that knowledge to the value of fifteen millions of dollars;  that being about the amount of profits made by it, or expected to be realized by it, in about a year, through their management of the stock.

It is to be hoped that congress, after having suffered the establishment of an institution which can, and will, and does govern the local banks, and which I expect to see governing the government of the United States, if ever a season of serious difficulty with England arrives, will not now allow the people to be deprived of the security they expected, or suffer them to be shared by the bank;  thereby casting away the chief, or only, desirable features set forth in favor of its incorporation.  Let something remain to stand as a little credit against the exclusive privileges and extensive powers granted to this institution;  and rather pass a supplement to the charter compelling the offices, at all times when applied to, to furnish drafts at par in exchange for bills payable by said bank, no matter from whence issued, than afford facilities or allow pretences for refusing them.  It was expected that such drafts might always be had –it was one of the considerations on which the bank was chartered;  the people have a right to insist upon it, and they ought to insist upon it, and to have it, “peaceably if they can, violently if they must.”

By “violently,” I mean that the States should take it up, and tax the mother bank and the branches out of every resting place except the ten miles square.  In this right of the states is the only hope of safety against the power of the mammoth;  and it is well, indeed, that that right exists.  May the bank so conduct itself as never to require its exercise to such an extent as is here projected;  but the state banks must be defended, as the “weaker vessels,” and the United States bank be reduced to the necessity of honestly fulfilling the public expectation, or forfeit the advantages which the public has bestowed.  This is plain English and there will soon be a proper understanding of it by all parties.

Baltimore, March 7, 1818.

Banks and Banking.

The last Register made a great stir in this city –the demand for it was unprecedented.  A large extra number were printed, and given away, for we never sell single sheets of the work.  The effect was far beyond any thing anticipated;  and if vox populi est vox Dei, I am on the safe side !  I rejoice at such a burst of public feeling to resent a public wrong –the power of the people has been laughed at by those who have not felt its operation;  but they now seem tremblingly alive to its consequences, though yet resolved to persist in their plans.  What –are the commanders of millions to tremble at the stump of a goose-quill ?  Yes —-if that quill is directed by truth and justice it is as a two-edged sword which “divides between the joints and the marrow” of speculation.

The remarks about the bank of the United States are to continue.  I have yet much to say respecting it.  Nor shall the banking business, generally, be neglected –the subject will be elucidated by some infamous anecdotes, which I know are true.  But every thing in its season;  and, considering those with whom we have to do, facts must be considered.  Truth is not a libel in Maryland.

I wish it clearly understood, that a special enmity against the bank of the United States, or any other bank, has not led me to the subject that now engages my attention.  I owe ill will only to ill conduct, and am doing what I believe is my duty.  If I am mistaken, the people will forgive me, if I am right, they will support me in a well-intended effort to redress their grievance.  I am myself but incidentally interested.  The business of the banks, however, has passed every man’s threshhold, and is to be found every where –like the plague of the frogs, and other unclean things, inflicted upon the Egyptians.

The king of Sweden has attacked the paper money of his dominions –in a late speech he says, the amount of the paper currency, which in 1802 was only 14,000,000 of bank dollars, is now about 30,000,000– and asks, how can either natives or foreigners have any confidence in a currency which rises or falls 30 per cent. in one month.  It is not quite so bad with us yet;  but we do not know what we may come to, when, to the premiums, &c. of the United States bank, we add the effect of the three or four hundred banks lately established, or contemplated to be established, under the management of men well versed in the business of “providing for their families,” as the shaving-miser says in the play.

Bank of the United States.

I am happy in the belief that the contents of the last Register have had some effect to prevent the new speculation contemplated by the Bank of the United States, in the signing of its notes.  A speculation that, working either way, would have rendered it the greatest money-mill in the world:  thus, the branch at Baltimore may charge two per cent. premium for drafts on New-Orleans, &c. whilst that at New-Orleans, &c. drawn on Baltimore at par, or, occasionally demands its two per cent. also.  Thus a snug business can be done without risk or trouble –for the power of management acquired by the government-deposits, enables the skillful “money changers” to meet each other’s drafts very easily.  It is thus that the people’s money may be used to oppress them.  It is shameful, and scorn should point her slow, unmoving finger at it.

I ventured the opinion in my last paper that “the Bank of the United States was intended for a monopoly from the beginning.”  I shall not call hard names or use harsh epithets, but I hope to draw such a picture of it, that every man may determine its character for himself.  Previously, however, to entering upon the subject I beg leave to observe, by way of explanation, that seeing the matter about this bank has been taken up with great spirit in Philadelphia, and by writers, probably, much better informed of its proceedings than I am, I have carefully preserved, but rigidly refused to read any of their essays, until give my own unmixed notions about it.  This is my way.  When my own stock is exhausted, I shall borrow freely, and as freely acknowledge the debt, and re-pay, if I can.

It is not worth while to dive into the intrigues and semi-briberies that were made use of at Washington City, anterior to the passage of the act for incorporating the Bank of the United States.  I have hear many rumors;  yet know nothing about them.  But with all the power of these, and an assiduity worthy of a better cause, that act would never have past the house of representatives unless it had been regarded as a necessary evil, to resist and overcome a supposed greater evil in the then existing state of our paper currency –specie having wholly disappeared in most of the states, and, indeed, being very scantily circulated in any of them.  It was hoped and believed, that this bank would permanently equalize the exchange, and instantly transmute old rags into solid gold and silver.  I know it was this– the supposed expediency of the measure, that caused several of the members of congress to vote for it, still doubting the constitutionality of the legislation, and alive to the consequences of the power that they were giving to the institution.  These things were promised, expected, and relied upon –one year has past, and the bank itself has commenced the very business which it was established to prevent !  Yes, and with less liberality than the brokers manage their’s –for they will give you some drafts and notes at a discount in exchange for others– but at the Bank of the U.S. not any are at a discount, and it will be lucky if drafts are not regularly presumed both ways, if the charter is amened as petitioned for.

The charter seems to be imperious that the capital stock should consist of seven millions of dollars in specie, and twenty one millions of the funded debt of the United States, besides the seven millions to be subscribed (in a 5 per cent. stock created for the purpose) by the United States.  Before the act was passed, the “knowing ones” had fixed upon a plan to evade this condition of it, and the moment it received the unfortunate signature of the illustrious Madison, the gambling began, and has continued, pell mell, until this day.  It was determined that only the first installment (of $5 in specie and 25 dollars in stock) should be paid, except by the intruding vulgar who really meant to invest their money in it.  Under this arrangement, perhaps, three-fourths of the whole stock to be subscribed for, was taken by an 100 individuals, or less –and a fragment of these 100 persons now probably hold about four-fifths of all the stock owned by individuals in the United States !$  These are mere conjectures, not hazarded, however, without some calculation about them.  How were they thus enabled to hold such vast sums ?  Paper did the business:  the second and third installments were paid by notes of hand, instead of the specie and funded stock** required by the law.  But a grand disaster nearly happened at one of the branches! –the new-made directors were so much pressed by the time appointed for paying the second installment, that, report says, they were summoned in haste and discounted nearly a million, before they had one cent at their disposal, or were even provided with books to keep a record of their proceedings !  This was a bold start.

$ The fact here suggested will surprise those who have not reflected upon the subject, but it is not hazarded at random.  I am convinced, by casting together some things which are notorious, that three-fourths of the stock of the Bank of the United States was originally taken by less than 100 persons, and that four-fifths of the whole of it that remains in the United States, now is in the hands of less than fifty.

** By the report of the secretary of the treasury, see last vol. page 242, it appears that he purchased of the Bank of the United States all its funded debt, and by the documents accompanying the same (page 264) it appears that its whole amount was 13,043,767 dollars.  This is rather more than I expected had been paid in, yet it is eight millions, or more than one third, short of the sum required by the charter !  This deficiency, with the deficiency in the specie payments, enables us to come pretty nearly to the amount of the stock notes, and fully warrants us in believing that these notes amount to at least fifteen millions of dollars.  An allowance being made for partial advances of the 25 per cent. and for such part of the funded debt as Mr. Sergeant disposed of in England, to pay for specie.
     
Now such is the operation of this manœuvre, that the interest on a sum equal to the amount of the funded stock deficient, as above stated, will be lost to the people of the United States for at least two years, [by estimate and average].  Thus, if the additional eight million had been justly and truly deposited in the bank, as by charter was enjoined, the general government might have sunk it entirely in the last and present year.  But as it was not so deposited, the people’s money must lie idle and remain for the use of the bank, unless an act is passed to authorise the purchase of stocks at rates above par.  [See the report of the secretary of the treasury.]  The interest on the eight millions for two years, at 6 per cent. is $960,000;  a sum to be actually lost to the people through the misconduct of the owners of the bank.  Who could have thought it!  How it reduced the “bonus” ?

The stock was subscribed for with great judgment, especially in Baltimore, where the business of banknote-making is reduced to a science, and directorships too often bargained for like hogs are bought in the market –“If you’ll give that, I’ll give this.”  I doubt if the real number of subscribers in this city were as many as 500 –yet when our people went to the polls, to vote for directors at Philadelphia, they shewed 15,610 persons as share-holders, within 115 of a majority of all the share-holders returned from all parts of the United States, though we had taken only about a seventh part of the stock !  Five-eighths of the amount taken at Baltimore, was subscribed for at Charleston, with 1588 names;  and nearly one million more than the double of the Baltimore subscriptions, was taken at Philadelphia, with 3566 names.  This excessive influence of Baltimore was caused by the [almost] universally taking stock on proxies, one share to a name, to which were attached powers of attorney to transfer it, receive the dividends, &c. at pleasure.  But I do not charge any with a breach of moral rectitude for this –it had long been the common custom in this city to do so, in subscribing for desirable stocks.  It was partially practised, also, at other places where subscriptions were received;  and our people had a right to expect that it would be one so every where.  I mention it only to show how easily a minority may rule;  and to demonstrate the power of management.

Well, the Bank being organized, and three-fourths of its stock in the actual possession of 100 individuals, as I have supposed, a party, “a little band,” was get up in these to dispossess the rest, and fulfill the speculation.  They brought this about by accommodating themselves and refusing accommodations to those they had marked;  and so powerful was the operation that now, (in one year’s business) I calculate less than 50 persons as holding four-fifths of all the stock remaining on this side of the Atlantic.  And some of these have so carried on the speculation as actually to have received accommodations at the rate of $125 for every share of stock that they hold –the stock itself being pledged for the payment of the stock notes and the additional discount of 25 per cent. on its nominal amount.  What is the sum loaned by the Bank, to pay its own capital stock, and further advanced on that stock so paid, is confined au secret, as they say in France of a person dungeoned without trials;  but it can hardly be less than fifteen millions of dollars.  If this is the case, it would appear that the whole capital paid in by individuals, in solid specie or funded stock of the United States, instead of twenty-eight millions, as contemplated by the law, was about fifteen millions, exclusive of the first specie instalment of five dollars per share —the rest is paper.

As to the seven millions that were to have been paid in, in specie, I do not believe that so large a sum, including all Mr. Sergeant’s famous negociation, has ever been in the vaults of this bank, including all the deposits of individuals.

—[Following incorporation, the bank sent John Sergeant to England to purchase silver for the bank.  Giving what, in payment for the unit of measure ? the notes of the bank.  So they merely borrowed silver; hence, who really controlled the incorporators ?….. Mr. Sergeant, as representative of the people of Pennsylvania, in 1816 voted against the charter of this bank, but was persuaded to become Director and Counsel of the bank, and that changed his views on the central bank concept, —for the next two decades remained faithful advocate of it in the House of Representatives.]

The late dividend of this bank, which was at the rate of eight per cent. per annum, would have made a person laugh, if he could have separated the fact from its intention:  for how can any one believe that so great a profit ought fairly be made by the establishment at its commencement ?  But the bubble was up, and “puff away” was the word !  Yet as the directors have assumed a capability in the bank to divide eight per cent. per annum, let us apply it in operation with the celebrated stock notes, estimated at fifteen millions:

15 millions at 8 per cent, is ….. $1,200,000
The same at 6 dper cent, is ………. 900,000
Difference ……. 300,000

The first is the interest received for the bank stock, the other is the interest paid on the notes creating that stock, and the difference is a pretty little profit to be divided among the 50 persons, without the advance of a dollar, and without cost or risk, save the cost of half a quire of paper (for the whole of them) in a year, used to make the stock notes upon !

There is also another considerable advantage– the person holding a million of stock may demand a discount of $1,250,000 upon it, besides such sum as shall be considered his regular and rightful accommodation.  This is to prevent the stock from going into the market;  for it is well known that any considerable quantity offered for sale, would depress the price prematurely, i.e. before the great stock holders can quickly scatter it among the people.  They are powerfully assisted in this by the establishment of branches;  many being induced to become stockholders under the encouraged hope of directorships.  It is for this that the great effort is made -—herein is the consummation designed from the beginning– that being accomplished, the speculation is complete, and future possessors of the stock, may do as well as they can.

In our next paper we shall attempt to investigate the value of the stock, and notice the condition to pay the dividends on it in London &c. and conclude, for the present, with asking, how can it be expected, when so much of the funds of the bank is appropriated to speculators, that the public can be served;  and, what is the public to the fifty great men ?

To Correct Abuses by the Bank.

To the members of the senate and house of representatives of the commonwealth of Pennsylvania.

I am happy, gentlemen, that the matter which now interests me, is so much committed to a decision of the sober judgment of the representatives of honest Pennsylvania.  I have no claim to attention as a citizen of your commonwealth;  but I ask it as a citizen of the republic, deeply interested in supporting the middle classes of society, the bone and the sinew of every country, against oppression, and in preserving that equality on which the happiness of my fellow citizens so much depends.  It is the pride and glory of America, that so great a proportion of her people till their own land, or can say, pointing to some visible property, “that is mine.”  Herein is the rampart to resist the foreign bayonet, or check the machinations of the domestic traitor;  in fact, the Alpha and the Omega of government.

The powerful population and ample resources of Pennsylvania, together with her local position, standing as the key-stone of the federal arch, has ever caused her proceedings to be regarded with great sensibility by the people of all the states.  I am not about to say that her legislation has been free from errors;  but, an honest and undeviating policy on most subjects of high interest to the common weal, in war and in peace, has rendered her dear to the heart of the reflecting patriot.

It is on such considerations, respected gentlemen, that I find an apology for this address, and, having offered it, I shall very briefly state its purpose, which is to encourage you in carrying into effect the proposition before you, to tax the bank of the United States.  I am indifferent whether you tax it five or fifty thousand dollars;  only desiring an establishment of the principle, that you may and will tax it, as you please.

Gentlemen, the congress of the United States, by the charter of the bank, has lost the power to controll its concerns in their most essential particulars:  that bank has already, in one short year, exhibited a conduct in direct opposition to that which was expected of it:  its vast power is lodged in the hands of less than fifty individuals, who may make the whole monied capital of the United States bow to them, or suffer incalculable derangements and losses.  Here is an aristocracy worthy the resistance of republican Pennsylvania;  an aristocracy paramount to the law of the United States, and only to be subordinated by the reserved rights of the individual states, and the force of public opinion.  To you we look up for an example of patriotism –the mother bank is seated in your commonwealth– fix the principle that you will drive it out, if its vast funds are devoted to sinister purposes;  and be not intimidated by the notion that its funds will be transferred to New York, as is threatened.  The enlightened legislature of that great state will no more put up with a public grievance than that of Pennsylvania;  neither of you want the banking capital, for either of you can raise up institutions as solid as that of the bank of the United States at your will, save and except its power derived from the deposits of the general government, and these would be deposited in your own state banks, if the doors of the U.S. bank were closed in your cities.  If the bank behaves well, you may not tax it at a higher rate than you tax your own banks;  but reserve the right that you have to tax it just what you please, if it is conducted ill, and becomes the great nuisance of our common country –grinding the face of the poor to build palaces for the favored, speculating few.

The principle has not yet been legally settled as to the right of the states to tax this bank.  The famous case of Georgia vs. the old bank of the U.S. was rather waved than decided.  But the right is undoubted in the states;  for it is impossible that congress can locate any measure to interfere with the legitimate revenues of a state, unless the the power be expressly delegated.  You tax your own banks for revenue;  and how can the general government interfere in the case ?  How settle amongst you an institution in open warfare with your established revenue laws ?  But the right is undoubted –it is among the powers retained.

Look at the conduct of the bank for causes to tax it !  What can be so fair a subject for tax as a monopoly –a full, perfect, complete monopoly ?  I pray you to hold up the power and influence of Pennsylvania as the rod to chastise and the scourge to drive away the bank, if its deeds shall continue to deserve your intervention in behalf of an injured and oppressed people.

I am, gentlemen, with great respect,
Your sincere friend,
The Editor of the Weekly Register.

Saturday, March 14, 1818.

Bank of the United States.

Before we proceed any further it may be well to revert to some things which have already been stated, for further elucidation and conclusion, as to their facts.

The number of subscribers for the bank of the United States at Baltimore were supposed to be less than 500, though l5,610 share-holders were represented at the polls for the election of directors.  A list of those subscribers has been handed to me –they are rising 200;  about 225 or 250, all told.

The number of shares taken at Baltimore were given at 40,141 –nearly 20,000 of these shares were directly taken on ten names, and about 10,000 by twenty more, the remaining 10,000 by about 200 persons.  But on this list several persons are named who must be regarded as agents of the “council of ten;”  and, probably, we shall not be very far from the truth in supposing that three-fourths of the whole stock taken here, was taken for the real use of fifteen individuals.  From the ratio thus presumed, if applied to the whole subscription, and especially when we consider what occurred at Philadelphia, much confidence is felt in the declaration that three-fourth of the whole stock subscribed for was monopolized by about 100 individuals.  The national bank, therefore, dwindled into a thing for the use and emolument of so small a fragment of the community as 100 members of it, now further monopolized and in the hands of fifty: who seem to think, or, at least, act, as if each one of them was an Atlas, supporting a world on his shoulders !  Of all sorts of aristocracies, heaven defend us from that which comes of money —the most relentless and remorseless of all.

It is also worthy of reflection, that, by the introduction of the stock notes instead of the funded debt of the United States, the general government is now compelled to suffer a large sum of money to lie idle, for the use of the bank, at the loss of its interest –because the bank has not furnished, and will not furnish, the funded debt, at its par value, as was calculated upon and conditioned for by its charter.  The bank ought to be compelled to furnish the eight millions that are deficient, or pay an interest to the United States for the amount of the people’s deposits, lying dead in consequence of an unjustifiable speculation in its stock.  Every body expected that that stock would have been paid —it has not been paid;  and any one, the beggar or the nabob, may easily be a holder of millions, if he was able to beg or borrow the amount of the first installment for a few days, that being all that was paid by many –that being, also, returned to some in the shape of discounts, with 25 per cent. addition on the whole sum they signed their names for.  It is by such signing of names that the banking business has been disgraced in most parts of the United States, and by petty money-shops unable to pay a debt of 100 dollars.  But—
“One murder makes a villain,
Millions a hero.”

Nearly a quire of anonymous writings has been sent to the editor, proposing to prove that the conduct of the directors of the bank of the United States has been righteous and unoffending.  The authors may have them again.  I am not accustomed to regard anonymous pieces;  and shall not put myself in opposition to men that would write by the day to fill my paper, if I would give them the room.  Principals, only, will be attended to;  I may be mistaken, but my opinion is– that the famous funding system and notorious Yazoo, had their origin in the same principles that got up the Bank of the United States.  The covert perjury of the first, and the broad bribery of the second, did not, perhaps, belong to the third;  but the same sort of management and cunning was equally powerful in either of these supereminent transactions.  Each of them were calculated to snatch the speculator from a cottage and transfer him to a palace –to make him mount his coach and cause the people to stare, “and wonder how he got there !”  Money, in the estimation of too many men, stands in lieu of honor and honesty –as a sort of royalty;  under the sanction of which every species of moral wrong may be committed with impunity;  and the people are sometimes base enough to seem to have a respectful homage for its possessors, no matter by what means it was obtained —and so overlook “fantastic tricks” of pomp and pride, at which the “angels weep.” —Now, I cannot see any real difference, in point of fact, between a set of bank directors, who make and issue notes for 5, 10 or 100 dollars, which are not worth the money stated on the face of them, which they deliberately promise to pay with a previous resolution not to pay, and a gang of fair, open, honest counterfeiters.  One speculates by law, the other against law;  but both are speculators and have an unity of interest.  I have twelve or fifteen pieces of paper, curiously marked and engraved, and passed as bank notes —some of them are called genuine and a few pronounced to be counterfeits.  But the latter are just as valuable as the former —and it seems impossible to draw a distinction between them;  their intention and effect being the same.  I have, also, eight or ten other bank notes of less present use to me than so much brown paper would be;  not being able to sell them at 15, 20, 50, 40 or 50 per cent. discount.  The issuing of such notes is counterfeiting in fact, if not in law.  But these remarks do not apply to the bank of the United States, as yet;  and I hope that they never may.  We have not heard that that bank, or any of its branches, has refused a broad, absolute, legal and regular demand for specie;  though some things have happened that looked very much like refusals.

To return to our immediate subject and say something on the probable dividends and real value of the stock.

The old bank of the United States transacted its business under the most favorable circumstances.  Its capital was, comparatively, small, and composed of sound, solid “stuff.”  Specie was plenty, and its directors were seldom, if ever, restrained in their operations by the fear of a want of it to meet their engagements, and they had every advantage possessed by the present bank in respect to deposits, &c.  And yet, although at the close of its concerns, six-tenths of its nominal capital was actually in specie in its vaults, the average dividends were only about eight per cent. –the amount divided by the new bank at its outset, encumbered by a thousand incidental expenses.

Public rumor says that some of the branches of the bank of the United States are severely pushed to meet their engagements;  and so great is the pressure on the institution that it is understood to be resolved, that only from 38 to 40 millions shall be discounted in the whole (including the stock notes, of course) until some fortunate change takes place.  Hence the pressure on the common people, and the tyranny over the state banks, whenever there is an ability to exercise it.  The following is, perhaps, about the scale for the discounts at four principal places:
Philadelphia, 6,000,000
Baltimore, 5,000,000
New-York, 3,000,000
Boston, 2,500,000

And truly, with an amount of seven millions in United States stock which cannot be converted into money, together with the dead weight of the stock notes –40 millions, in the whole, is as much as can be safely discounted, though the deposits by the government and by individuals may have an average amount of nine or ten millions —the notes to be kept in circulation being estimated at 11 millions.

The capital of the bank, held by individuals is ….. $28,000,000
the capital held by the U.S. in five per cent stock …….. $7,000,000
…………………………… $35,000,000

Baltimore, July 4, 1818.

The Fountain of Evil.

Satan, hurled headlong from the realms of bliss for his ambition and pride, eminently called the “father of mischief,” and “fountain of evil,” is supposed to carry on an eternal war against man’s happiness, by subordinate agents or passions.  Kings and state priests, with the curses that flow from their despotism over mind, person and property, in the old world, are his favorite channels for dispensing misery to the wretched millions there;  but these having little improper influence here, (speaking comparatively) the lustful Dæmon of Avarice was directed to spread immorality, and with it distress, through the republic.  He had long scowled upon the virtuous purity of the American character with infernal malignity, and entered upon his great mission with joy.  The very verdure of the fields appeared as if scorched with fire wherever he rested his footstep, and he soon announced to the master-spirit that he “came, he saw, and conquered.”

After having beheld the misery brought upon England (whose vices and follies we are so apt to copy, unadmonished by their effect) by the excess of her “paper-system,” the legitimate offspring of kingcraft and priestcraft –the natural product of a connection between the hyena and crocodile– after having seen the palaces and poor-houses that it had erected, with an almost total extinction of the middle classes, lately the glory of that country, to make way for nabobs and paupers –the one giving a guinea for a peach that we would think only fit to be thrown to the hogs, whilst the other went supperless to bed, and many actually perished for a want of the most miserable food that could sustain a miserable life; –after having known the train of vices and crimes that were, and always must be, incident to to such a state of things, which, like experience, with the burning pen, inscribed instruction on the Adamantine pillar of truth —how was it that we yielded so easily as to deny to the Dæmon of Avarice the applause of his infernal majesty for a victory in a well-fought field –for we yielded almost without a struggle ?  But suffering Virtue, though defeated, still remains to rally her votaries –to exhort, encourage and reprove, and strike terror into the recreant heart, crying aloud, “Curse ye, Merox, curse ye most bitterly the inhabitants thereof, because they came not to the help of the Lord against the mighty.

Three or four weeks since we called the attention of our readers to a terrible fact stated in the British parliament:  for fourteen years before the suspension of specie payments in England, there were only four prosecutions by the bank for forgery, but in the fourteen years since such suspension, there had been four hundred and sixty-nine such prosecutions !  One hundred and twenty-seven from January to April, 1818! –the suspension being further extended!!  Of the amount we may easily believe that at least one hundred were executed and as many more transported, for want of decisive evidence;  for forgery, or the suspicion of forgery, is never forgiven there, if it be possible to prove the one, or reasonably support the other.  This horrible fact is as an archangel speaking to us in a voice of thunder from on high;  for God has decreed that like causes must produce like effects.

A man’s blood almost congeals as he looks over a file of British papers and reads the accounts of those legalized murders.  A single paper contains the trials of ten unhappy beings for uttering forged bank notes –four of whom were immediately executed;  after having been told by the judge, with perfect coolness, arising from habit, that to them “as guilty dealers in the horrid system, no mercy could be extended.”  The others were transported for fourteen years –they had not offered to pass forged notes;  such notes had only been found in their possession.  Of the four that were hung in company, one was a woman aged 60, another a young man of 22, about twelve months married, whose wife was near her accouchement, and, with her child, perished with her husband !  At another assize, we are an account of the conviction of three others, promptly sentenced to death and speedily hurried to eternity!  The following case of Harriet Skelton is copied from a London paper of April 20, in the present year:

The case of Harriet Shelton, ordered for execution, is most interesting and affecting –she is thirty-three years of age;  she was left an orphan when only three years old.  She was brought up in a respectable family till her 15th year, when she entered service in which station she continued till her marriage with John Skelton in 1810, a few years older than herself;  her husband soon proved himself a most abandoned and vicious character.  For eight years she had to hear every thing malice or barbarity could inflict, when, finding himself unable to maintain his wife, and indulge his own propensities for drinking, he left her, totally destitute, in lodgings in London, with the fixed determination of never seeing her again.  At this juncture she accidentally met her brother, Mr. Goodluck, with whom Mr. and Mrs. Skelton had been long at Variance.  0n hearing her story, Mr. Goodluck offered her a comfortable asylum with him, upon condition she would entirely abandon her husband.  This she refused, alleging that her duty as a wife required her to do nothing that would exasperate him, whilst there remained any hope of reconciliation, being unable to endure the thought of a total separation from Mr. Skelton, whom she all along tenderly loved.  Determined to make one more effort, she followed him to Battlebridge, where he was at work:  she only asked him to allow her 5s per week, though she well knew he was gaining at that time, 35s weekly;  even this he peremptorily refused.  Mrs. Skelton had now no resource left but her brother, to him she went in December, 1816.  He by degrees unfolded a mystery, of which she had no previous suspicion, and she discovered Mr. Goodluck to be a regular passer of forged bank of England notes.  He earnestly entreated her to unite in this fatal traffic;  for ten months she resisted his warmest solicitations, but in November 1817, her brother having contracted a debt of 60l which he was unable to pay, he told her plainly that unless she assisted in passing notes, he must go to prison, and she would be left destitute as before.  This shook her virtue;  and Mrs. Skelton not only began uttering forged notes, but also opened her house for the reception of loose characters, in the hopes of raising the necessary sum.”

A subsequent date gives an account of her execution on the 25th of the same month –only five days being allowed for her to make her peace with her God, and reconcile herself to her destiny !  The miserable female was nearly dead with apprehension before she reached the gallows, and had to be supported on her feet by three or four persons, whilst the terrible preparations were making to launch her into the unknown world !

Like causes have already produced like effects in the United States –and we must begin the hanging of counterfeiters by wholesale, if we cannot check the operations of lawful-money-makers.  I have laid by for a week past the several notices that I happened to see in the newspapers of honest and other counterfeits and counterfeiters.

The following, from the Niagara Journal of June 9.  “The Commercial bank of lake Erie, at Cleveland, Ohio, has refused to pay in specie a draft made by the U.S. branch bank at Pittsburg.  The directors of the former bank have published a manifesto, in which they declare their ability to redeem their bills, and their willingness to pay any drafts that might be made by individuals or other banks, in the course of business, but drafts made by the United States banks they would not pay, alleging that they are made for unjust objects.  The directors in their report say, that ‘there is little reason to doubt that some of the heads of department of the national government favor, or at least connive at, this unjust and oppressive speculation of the U.S. bank.’ “

What a story is this ?  If the notes of the Commercial bank of lake Erie are out, I should be glad to hear of any reasonable excuse why they should not come in !  The only good I now hope for from the bank of the United States is, that the great speculators will keep the little speculators in order;  and, by and bye, the people will regulate the whole.

What a catalogue !  And are the people to be thus demoralized –is society thus to be imposed upon, to gratify the infernal avarice of less than one thousand men in the United States ?  Are all these evils to be suffered that such a fragment of our population may ride over the necks of their fellow citizens ?  Who can look upon this list without horror and dismay ?  The British captain Burden pronounced us to be “a nation of liars” –he was a liar, for saying so;  but we seem about to become liable to be called a nation of counterfeiters !  Counterfeit notes and false bank notes are so common, that forgery seems to have lost its criminality in the minds of many;  and the little rascal thinks that he may as well make money as a big one.  Prostrate in honor, deeds are committed by men in the character of bank directors, that, if known to be done by them in their individual capacities, would put them under the bann of all that is honest and decent in the community.

A London paper observes, “It is quite idle to talk of the honor of a great public body [meaning particularly the bank of England] –public bodies never feel shame.”  Indeed this is true.  It will remain to be true until we begin to to call things by their right names, and make public bodies responsible in the same way that they do individuals.  A man who will not pay his debts, far as he has funds, is called a scoundrel –so a body of bank directors, who will not pay theirs, should be considered as scoundrels;  the man who buys up his own notes is universally allowed to be a swindler –so is a bank, or any of its agents or managers, that does the same thing.  I defy the whole host of shavers and speculators to controvert these propositions.

Rougery loses no part of its property for being done by a public body;  and every man is a principal who does not retire from and expose the iniquity.  This is a new doctrine, yet;  but happily, it is becoming familiar;  and I am grateful to believe that it is proceeding to effect.  Many honest presidents and directors of several money-shops may be expected to resign very shortly, unless reformation takes place.  Let this be marked.  It is these that save such institutions from condemnation –and when they retire, like good old Lot and his family, justice, as the fire from heaven, shall descend and consume the Sodoms and Gomorrahs which their virtue has so long preserved.

[cognitive dissonance:  honest directors of a dishonest enterprise.  Bank-note circulating is dishonest by its nature, and if these directors were really honest they would not engage in it.  If Mr. Niles really wanted to solve the problem, he would recognize the nature of banking and would advocate against fractional reserve banking and issuing of bank-notes.  As Thomas Jefferson wrote three years earlier banks should discount for cash, alone.]

I attribute at least nine tenths of the honest counterfeiting to the crimes of our chartered money-manufactures.  We see how it is in England, let us briefly call to mind what we know of at home.  Massachusetts first run bank-mad, and then, and not till then, were the notes of her banks extensively counterfeited.  0n the banks of the middle states there were hardly any counterfeits until after the Massachusetts mania had fastened upon us, and we, not having yet past a purgation, are affected worse than Massachusetts was.  The banks south of the Potomac are yet few in number, they are generally bottomed on a solid capital and honestly conducted;  and I never recollect to have received but two counterfeit notes on any of them, though I may handle a thousand notes a year issued by these banks.  Such may be more numerous;  but they are hunted out of circulation immediately.  Here is abundant proof, within the reach of every man’s understanding, of what I have asserted.  Just so, as the Dæmon of Avarice is the author of modern banking, so is that banking the fountain of counterfeiting.

The paper system has been considered by my invaluable correspondent, and myself, as at war with real property and the product of labor.  This is, unfortunately, felt in many parts of our country, especially in the states of New York and Pennsylvania.  A few days ago I accidentally examined a village newspaper published in the former, and, like a man treading near a serpent, was surprized at the long rows of sheriff’s advertisements that it contained –thirty-three pieces of real property, belonging to as many different persons, were advertised for sale by the sheriff of the county, [a western one,] many of which appeared to be valuable farms, and there were also eleven mortgage sales, in the same paper !  Nearly 100 such newspapers are published in the state, and the most of them are stuffed with such events of the war, in the neighborhood of places where banks are established.

I this day received a letter from a most respectable gentleman on the Niagara frontier, in which, speaking of the bank there, he says– “I believe it is a ruinous institution and nothing (save the destruction of their frontier by the inhuman, savage and barbarous enemy, british and indians, in 1813) has ever, or will ever be so oppressive and ruinous to the citizens in its vicinity.”

Now for a contrast– Westchester county, N.Y. had 30,272 inhabitants in 1810, and the people have increased since, and its taxable property was valued at $6,317,326 dollars.  But, at a recent court of common pleas and general sessions of the peace, only one indictment was found, which was against a man supposed to be insane.  There were also only two civil causes on the calendar !  The moment I read this, being alone, I struck my hand on the table, exclaiming then there is no bank in this county !  I examined a list of the banks of New York and found that the opinion was a correct one:  may this happy people keep the tempter from them forever !

Reader– what better evidence do you want of the demoralizing and destructive effects of the paper system than are stated in the preceding ?  Do you require that one should arise from the dead to warn you ?  No– you have the living victims of it before you.  Profit by experience, and reform or destroy the monster that, if not restrained, will destroy you.  You have more to fear from it than from an invading foreign army, as powerful as that which supported by corruption, won the famous victory at Waterloo.

Postscript.  The regular day for the publication of the preceding is the fourth of July.  It is the glorious anniversary of the time when a band of patriots decreed the birth of a nation, and, appealing to heaven, declared that they owed no allegiance to the king of Great Britain !  How happy, it on this day, also, the people, whilst with cheerful hearts and overflowing cups they commemorate that incomparable event, should also resolve to relieve themselves of the legitimate bantling of kingcraft and priescraft, imposed upon us by our apes of nobility !  To resolve to consider the banks, as the declaration of independence teaches us to consider nations –enemies in war, in peace friends;  to mete unto them the same measure that they mete unto others, and compel them to render the justice that they exact !  This being done;  another independence is gained, a new set of chains are broken, and, honest labor may fully enjoy the bread it earns.

To the polls, fellow citizens! it is there that paper shot will tell … Suffer no bank director, no money monger, to represent you in congress or assembly, until the good old times of banking honor are restored, when capital was considered as necessary to the power of lending money !

[Obviously, Mr. Niles held some ideas as to who won at Waterloo;  but he did not learn/conclude anything from the experience.  Napoleon had battle-field talent and a good army, yet he (and we) lost……… what could ignorant, organization-less, undisciplined voters accomplish ?  200 years of voting and electing showed how naive-child-like his wishful thinking was. …… As if banking could be honourable;  as if issuing three notes for each coin (which Mr. Niles considers prudent) could ever be good.
100 years after the fact we obtained proof that 29, out of the 90, members of the first congress of U.S. were bankers and speculators.]

Saturday, July 11, 1818.

The Sea Serpent and Whale.

The following account of the sea serpent, while it fully confirms former statements as to his enormous size, gives a more just idea of his monstrous powers than any which has preceded it.  How vast must be the body of a serpent, that, when lying in the water, could easily, and for a length of time, support near fifty feet of its length in an erect position above the surface! and how wonderful his strength who could attack and beat the whale in more sport !  Is not this the Leviathan indeed ?  Captain West is a man well known to us, and the correctness and veracity of his statement will not be doubted by any one who knows him. —Hallowell Advocate, June 27.

I, Shubael West, of Hallowell, in the county of Kennebeck, master of the packet Delis, plying between Kennebeck river and Boston, testify and say, that I left Boston on the morning of Sunday the 21st instant, and at about 6 o’clock P.M. Cape Ann bearing W.S.W. about 2 leagues, steering a course N.N.E. saw directly ahead, distant three-fifths of a mile, an object which I have no doubt was the sea serpent, so often mentioned by others, engaged with a whale that was endeavoring to elude the attack.  The serpent threw up his tail from 25 to 30 feet in a perpendicular direction, striking the whale with tremendous blows rapidly repeated, which were distinctly heard and very loud, for two or three minutes.  They then both disappeared for several minutes moving in a W.S.W. direction, when they re-appeared, in shole of us, and about under the sun, the reflection of which was so strong as to prevent our seeing so distinctly as before, when the tremendous blows were repeated, and as clearly heard as before.  They again went down for a short time, and again came up to the surface under our larboard quarter, the whale appearing first and the serpent in pursuit.  Here our view was very fair.  The serpent shot up his tail through the water to the height before mentioned, which he held out of water for some time, waving it in the air, and at the same time, while his tail remained in this position, raised his head rather leisurely 15 or 20 feet, as if taken a view of the sea.  After remaining in this situation a short time, he again sunk into the water, disappeared, and was not seen after by any on board.

The serpent’s body was larger, in my opinion, than the mast of any ship I ever saw;  his tail appeared very ragged and rough, and was shaped something like an eel’s;  and his head like that of the land serpent.  Being well acquainted with whaling, I think the whale was endeavoring to escape, as he spouted but once at a time on coming to the surface.  The whale’s back was distinctly seen, as well as his spouting, and the last time he appeared he went down before the serpent came up.  The above was seen by all on board, amounting to 15 or 18 persons, as well as myself, with the exception of one woman.

During our view, the combatants had passed a mile or more.  The whale was a humpback, and a pretty large one.

Shubael West.

Hallowell, June 27, 1818.

Then the above Shubael West personally appeared before me, the subscriber, one of the justices of the peace within and for the county of Kennebeck, and made solemn oath that the above statement or facts by him subscribed is just and true.

A. Mann.

The preceding account seems to be abundantly confirmed by the testimony of others

Saturday, August 8, 1818.

Law and Banks.

Gen. Joseph Kerr, formerly a senator of the United States from Ohio, by misfortune has failed and is now confined in Chillicothe prison for debt.  He has published a detailed statement from the records of the court, of judgments, costs, &c. on eleven notes with two endorsers, amounting to 16,702 dollars.  On this statement he makes the following remarks—

“By the above statement it will be seen that the original debts against me amounted to 16,702, when I failed –on these debts, judgments were entered up at the first court thereafter, when the clerks costs, as taxed, amounted to $29.72 cents;  the sheriff’s to $12.76;  and the attornies, as they are taxed, (which I contend are not fairly done) to $55.  No attempt, other than confining my person, was mode to collect these judgments;  but my endorsers were sued, whereby the bank have judgments in full force for the amount of $54,478 debt –$275 attorney’s fees –$312.30) clerk’s fees, and $88.74 sheriff’s fees, not including the cost of collection.

I am not so much out with the banks as to annihilate them that are solvent, but I am of opinion that care ought to be taken in electing members to the legislature that would provide against the oppression and imposition of directors;  and make such change in the laws regulating the collection of debts, as would compel the creditor to prosecute the principal debtor to insolvency, before the sureties should be put to all the costs and trouble, they appear to be liable to, under the construction given to our present laws.

Joseph Kerr.
Chillicothe prison, July 4, 1818.

Saturday, August 22, 1818.

A Roman Coin found in Tennessee.

Nashville, July 7.— It has long been a desideratum with the learned to know by whom the numerous old fortifications, &c. in the western country, were erected.  It is now in our power to add one fact that may serve to direct enquiries a little further.  A short time since a cellar was dug in the town of Fayetville, on Elk river, in this state, not far from the lines of one of those ancient fortifications so common in the western states;  and in the dirt was found, corroded with a kind of rust, a small piece of metal, which being disrobed of its covering, was ascertained to be a Roman silver coin, issued about 150 years after Christ, and in a good state of preservation.  It is in the possession of a merchant of Nashville, and has been seen by hundreds, many of whom are antiquarians, and they are all satisfied it is a genuine coin, and one gentleman, who was lately in Italy, and saw the busts of the persons represented on the coin, declares the heads to be very good likenesses.

On one side, around the edge, these letters are seen,
ANTONIVS AVG PIVS P P TRP COS III
on the other side,
AVRELIVS CAESAR AVG r III COS
which is construed to read thus
Antonius Augustus Pius, princp. pontifex tertio consule.
and
Aurelius Cæsar Augustus pontifex tertio consule.

Since the subject of the Roman coin has occupied public attention, we have learned many facts interesting to the antiquarian.  Some few miles above Columbia, on Duck river, are a number of fortifications and mounds, into one of which some young men dug a small distance, and found several well burnt bricks, about nine inches square and three inches thick, also several fragments of earthen ware, also a sword about two foot long, differently shaped from any in use since the whites visited the continent, apparently once highly polished, but now much eat with rust.  We learn from a respectable source that a gentleman passing over one of the fields of ancient slaughter, on the bank of the Caney fork, his eye caught some rude letters on a flat stone, he examined it and made out– we are all cut of.—[in what language was it written?] Who were the sufferers we have yet to learn, and hope that some fortunate discovery will one day satisfy the cravings of the curious.

James McCulloch versus The State of Maryland, John James:—

The first question made in the cause is, Has Congress power to incorporate a bank ?

After the most deliberate consideration it is the unanimons and decided opinion of this court that the act to incorporate the bank of the United States, is a law made in pursuance of the constitution, and is a part of the supreme law of the land.

It being the opinion of the court that the act of incorporating the bank is constitutional;  and that the power of establishing a branch in the state of Maryland might be properly exercised by the bank itself, we proceed to enquire—

2.  Whether the state of Maryland may, without violating the constitution, tax that branch ?

We are unanimously of opinion, that the law passed by the legislature of Maryland, imposing a tax on the bank of the United States, is unconstitutional and void.

This opinion does not deprive the states of any resources which they originally possessed.  It does not extend to a tax paid by the real property of the bank, in common with the other real property within the state, nor to a tax imposed on the interest which the citizens of Maryland may hold in this institution, in common with other property of the same description throughout the state.  But this is a tax on the operations of the bank, and is consequently a tax on the operation of an instrument employed by the government of the union, to carry its powers into execution.  Such a tax must be unconstitutional.

Decided March 6, 1819.

September 18, 1819.

France is in a singular state.  A solitary cry of “vive la Napoleon,” would make king Louis tremble at the head of his army !  Yet every thing seems quiet, and the people appear to enjoy many blessings which the revolution and the public works of the late emperor, have conferred upon them.  France has suffered much –but the general state of society is vastly improved.  The people are no longer that listless herd of slaves that they were.  The march of mind has been as rapid as were those of the wonderful man who so long directed the energies of the nation:  who, with all his faults, is yet so beloved by Frenchmen, that if he were to stamp his foot on French ground, the fables of antiquity would appear to be realized;  for armed men would seem to spring from the earth to support his pretensions to the throne.  But France, if not agitated by the convulsions of her neighbors, will probably remain quiet during the life of the present king, and then some change of government is generally expected.

October 2, 1819.
Important Proceeding.  Copy of a letter to the editor of the Weekly Register, dated Chillicothe, September 17, 1819.

“Dear Sir— The law of this state against the U. States’ bank, in this town, was carried into strict execution today.  A person deputised by the auditor entered the branch and demanded the tax of fifty thousand dollars –which sum being refused, he proceeded to the vault, and swept all that could be found, and had it taken off and deposited in the bank of Chillicothe.  The circuit court, which had been sitting, and adjourned last evening, had granted an injunction.  The branch bank, it is probable, will be shut for a short time.”

Much as we are opposed to the principle and operation of the bank ofthe United States, –decided, as we are, in the opinion, that congress transcended its authority by incorporating it– and convinced also, that the decision of the supreme court, in the case of McCulloch vs. the state of Maryland, was wrong, yet believing that the states have a right to tax this institution and its branches– still we regret this act of Ohio.  It is not for any of the states, much less individuals, to oppose force to the operations of the law, as settled by the authorities of the United States, however zealous we may be to bring about a different construction of it, through persons legally vested with power according to the constitution, to act in our name and in our behalf.

October 9, 1819.

The Washington City Gazette, says— “We are at a loss to know how Mr. Niles, the editor of the Weekly Register, will settle matters with his friends, the state authorities, in Ohio.  Mr. Niles is convinced of the illegality of the institution of the bank of the United States, and is ‘convinced also that the decision of the supreme court, in the case of M’Culloch vs. the state of Maryland, was wrong;’  yet he ‘regrets this act of Ohio!’  Verily, this is flinching in the time of need.  ‘Call ye this backing your friends?’  After writing them up to the sticking point, suddenly to turn short and censure them !”

October 9, 1819.

State of Ohio vs. United States Bank.

The two following articles give a full account of an important proceeding on the part of the state of Ohio, which we briefly noticed in our last.  Private letters to the editor shew that much feeling was excited on this occasion.  When it was understood that an injunction was obtained, there was a great deal of exultation on the part of the friends of the bank –“wine was drank freely and mirth abounded”– but a sad reverse happened when the officer had served the process, and taken off all the cash (only $20,000) that he could find.  All parties appear to agree in giving much credit for the manner in which the process was served on behalf of the state —and, as possession is said to be eleven points in the law, one of our correspondents suggests that the plea will stand thus:

“Bank of the United States vs. The State of Ohio, for a tax collected”

But nothing has occurred, since the decision of the supreme court in the case of McCulloch vs the state of Maryland, by which it was determined that the states could not tax the bank of the United States, that involves within it such important political considerations and consequences in this step on the part of Ohio;  and every plan that we can think of to adjust the matter, seems to be surrounded with difficulties.  The state sovereignties must be maintained as the sheer anchor of our republican systems –yet if a supremacy is not acknowledged in certain cases to belong to the general government, we shall become like a rope of sand.  As great doubts have always existed on the power assumed by congress to grant acts of incorporation, and as it is now almost unanimously admitted that if the power legally exists, it is a most dangerous one, we should like to see some mode adopted by which the constitution might be amended in this respect to declare that the right to incorporate exists or that it does not.  But let this be done peaceably.  We believe that many aberrations have been made from the principles of the revolution, as understood at the time when our constitution was adopted –but happily, we are not situated like the people of England are:  we can effect reformation without revolution;  and we know that “truth is a victor without violence.” [really?!]

Those who condemn the act of Ohio, will however find a great excuse for it in a knowledge of the fact, that the branches of the United States bank established in that state, have been exceedingly oppressive to the people;  and, as most persons believe, unnecessarily rigid and unaccomodating.

From the Chillicothe Supporter, of September 22, 1819.

By virtue of a warrant issued by the auditor of state, agreeably to the provisions of an act passed by the legislature of the state of Ohio, at their last session, entitled “An act to levy and collect a tax from all banks and individuals, and companies, and associations of individuals, that may transact business within this state, without being authorised to do so by the laws thereof.”  Mr. John L. Harper, (to whom the warrant was directed) accompanied by Mr. T. Orr, and Mr. J. M’Collister, entered the branch bank of the United States, at this place, on Friday last, and levied on the specie and bank paper in that institution, to the amount of one hundred thousand dollars, which is the tax assessed on the offices of discount and deposite of the bank of the U. States, located in this state.

As this transaction may receive from rumor a coloring, and from prejudice, misrepresentation, a brief statement of the facts may be useful in allaying any improper feelings which may have been excited.  The auditor of state, feeling himself bound by the law of the state to execute the duty imposed on him, made known his determination to one or two individuals;  subsequent to this he received a citation to appear before the circuit court, on Tuesday the 14th inst. as at that time a motion would be made by the bank of the United States to enjoin his proceedings under the law of the state.  This citation was enclosed by him to a gentleman of the bar, with a request to him to appear for the state if he should deem it correct.  On Tuesday the petition of the bank of the United States was heard by the counsel or solicitors for that institution:  the state refused to appear, denying the jurisdiction.  The court, after a short deliberation, allowed the injunction, on bonds with security to the amount of $100,000 being given by the bank.  This was entered into.

In the mean time, or rather previous to the application in court for an injunction, the auditor had been instructed by his counsel to charge the tax, and issue his warrant, and deliver it to the officer, unless he should be restrained by the injunction.

On Tuesday afternoon, the agent of the bank started to Columbus to stay the proceedings of the auditor;  but, unfortunately for the bank and the whole community, the counsel had forgotten to have a writ of injunction issued to stay the proceedings.  The papers served on the auditor were a copy of a petition, and a subpœna to appear before the circuit court of the United States on the first Monday of January next, at Chillicothe.  Previous to the service of these papers, the auditor had charged the tax and made out his warrant.  On the service of these papers he enclosed them, together with the warrant, to the secretary of state, then here –requesting him to obtain the written opinions of four or five lawyers on the subject, whether these papers amounted to a notice of an injunction, or operated as an injunction;  if they did, to re-enclose to him the warrant and papers, as he would not act in contradiction of that authority;  but if, in the opinion of these lawyers, it did not amount to an injunction, then to deliver the warrant to the proper agent and order him to proceed.

On consultation and mature deliberation, the lawyers unanimously gave their opinion that the papers amounted to nothing like a bill of injunction, and that he could not be in contempt for acting in contradiction of them.  The warrant was then delivered to the officer, with instructions to enter the banking house, demand the payment of the tax, show his warrant, and, on refusal to pay, to enter the vault and levy on specie and notes to the amount of the tax;  to use no violence himself, and if opposed by force, to proceed until expelled from the banking house;  and then to complain before a proper authority of the resistance offered.

The officer entered, made the demand, shewed his warrant, secured the entrance of the vault, and, on refusal to pay, entered the vault himself, and levied the amount of the tax with a small overplus to correct any mistake which might have been made in counting, which overplus he has offered to refund, but he has been refused admittance in the banking house;  he used no force or violence, but conducted himself in an orderly but determined manner.  The money has since been conveyed to Columbus, to deliver to the auditor.

This is a plain statement of the facts which occasioned and accompanied this transaction –we forbear making any remarks for the present.

From the Ohio Monitor, of September 25.

By an act of the legislature of this state, passed last session, it was provided that, unless the branches of the United States’ bank, located at Cincinnati and Chillicothe, cease their operations by the first of September inst. that a tax of one hundred thousand dollars be levied on the bank;  and that on the 15th the auditor of the state proceed to charge the said bank with the tax aforesaid, and immediately thereafter to issue his warrant to some person to collect the same.

On the morning of the 15th instante mense, Ralph Osborne, Esq. auditor of the state, was served with a subpœna, together with a bill in chancery, issued from the United States’ circuit court, sitting at Chillicothe, directing him to appear at the next January term of said court, and answer to said bill of complaint, praying that the auditor of the state he enjoined from proceeding under the law of the general assembly of Ohio, passed on the 8th of February, 1819, to “tax the bank of the United States,” &c.

On the same day the auditor proceeded to charge the bank with the sum of 100,000 dollars, and made out his warrant, directed to John L. Harper, commanding him to collect the tax of 100,000 dollars of the bank of the United States;  50,000 dollars whereof was charged on the office of Discount and Deposite at Cincinnati, and 50,000 dollars on their said office at Chillicothe.

0n the 17th inst. in the time of banking hours, John L. Harper proceeded to the office of the bank at Chillicothe, and demanded of the cashier (the president being present) payment of said tax, which was refused.  Upon which, John L. Harper, with two assistants, entered the vaults of the office, and took about 20,000 dollars in specie, and a quantity of bank paper, and withdrew.  He then counted of the specie and bank papers a sum of 100,000 dollars, and finding a considerable surplus of bank paper, he returned to said office to restore the overplus;  but, not being allowed admittance, he deposited it in the bank of Chillicothe, a few rods east of the U.S. branch bank.  During the transaction, the president of the bank read to Mr. Harper the subpœna, which we have before mentioned was served upon the auditor of state, as Mr. Harper believes.

On the next day, as Mr. Harper was on his way to Columbus, he was served with a notice which he supposed to be a writ of injunction, granted upon the bill of complaint filed against the auditor to stay his proceedings;  but which Mr. Harper considered not directed to him, and therefore disregarded.  He conveyed the money to the state treasury, where it is now safely lodged.

The same evening, prior to the depositing of the money in the state treasury, the auditor was served with an order from said court, bearing date the 18th September, enjoining him “from charging the said bank on the 15th September, of the present year, and thereafter annually, with the sum of $50,000 upon each office as aforesaid, and, also, from making out any warrant or appointing any person, or persons, to execute all or either of the provisions of the act of the legislature aforesaid;  or from levying and collecting the tax aforesaid;  or from paying over, by order or otherwise, any moneys received from said tax, which shall have been or may be collected under said act, into the treasury of the state of Ohio;  or from making report of the same to the legislature aforesaid, in his general report of the receipt of taxes, until the hearing of said bill of complaint by said court.”  But the auditor, not conceiving that the general law, regulating “offices of the treasurer and auditor,” or the special provisions of the act levying said tax, gave him any further control over the said money, not being specified in said act to whom the tax should be paid, he gave no directions concerning the disposal of the money.  Thus endeth the first act.

The following address of general Joseph Kerr, formerly of the senate of the United States, is copied from a Chillicothe paper:

To the electors of Ross county.

Fellow citizens— I had in view an arrangement, which would have put it out of my power to serve you in the next legislature –I have discovered that there will be some difficulty between the state government and the government of the United States, respecting the tax imposed by the last legislature, on the bank of the United States, which has recently been collected of the bank established at this place –I was one of those who advocated the measure, when the law was passed –I still think the measure constitutional and proper, the opinion of the supreme court to the contrary notwithstanding –I have declined the arrangement intended;  and now offer you my services, if you should think proper to elect me to the house of representatives.

If difficulties arise out of the measures of the legislature, it becomes the duty of those who were instrumental in producing them, to use their best efforts to produce reconciliation.  I do not mean to succumb to the bank of the United States;  nor to oppose, by force, the execution of the laws of the United States;  but I wish to see the line of sovereignty made plain, and if the rights of the state are to be encroached upon, that it be from necessity:  not to establish a monied aristocracy, administered by swindlers, over whom the state authorities, nor indeed, the authorities of the United States, have no control.

My election, and sentiments, will be opposed by some who, from the dust they raise, may be thought to be respectable:  when the opposition is made, look at these men and ask, why is it that they are opposed to my election ?  You will discover the whole of them to be directors of the branch bank;  those that are borrowers of it to an amount beyond their command, and who fear a removal of the office will compel payment;  unprincipled attornies, who are preying on the industry of the ignorant and unsuspicious of their neighbors;  clerks of courts who share in the spoil, and those who have been active in seeking my destruction by every mean artifice in their power;  who call me rascal and can assign no other reason for so saying, which is founded in truth, than that I have been too vigilant for them to succeed to the extent of their rapacious wishes.

I am, fellow citizens, your friend and servant,
JOSEPH KERR.

Near Chillicothe, 20th September, 1819.

November 6, 1819.

During the short period of his power, Napoleon Bonaparte did more for France, than the Bourbons had done for centuries, and in all parts of the country, as is the custom at Trieste, the people may point to some noble improvement and say, “behold the work of Napoleon !”  His roads, canals and bridges, and sound political economy, by which he secured to France the immense creation of property which profitable labor may furnish every country with, has given a kingdom to Louis in which there is more private comfort than any other in the world possesses.  The people have enough to do, and plenty to eat and enjoy.

Some years went by and Hezakiah Niles warmed up to the Bank of the United States. This change of heart of his appears to have coincided with Nicholas Biddle’s presidency and management of the bank. By 1832 he objected to Andrew Jackson’s veto of the re-charter.

On October 27, 1832, Mr. Niles writes:
“I was, years ago, a resolute and zealous enemy of the bank [of the US], believing in its mal-administration; but am now a decided friend of that institution, because thinking that its affairs have long been well managed. And the altered opinion entertained of it grew out of a reformation of conduct, which I earnestly labored to bring about, and, perhaps, had some influence to accomplish.”

And, on November 17, 1832, upon the re-election Andrew Jackson, he writes:—
“The bank [of the US], as such, has no claims for a renewal of its charter, but its well-managed concerns, and full accomplishment of the great purposes for which it was instituted, plead powerfully in its behalf. The people, in general, can have no interest in its interior operations —it is of no importance to them what party, or persons, hold the stock. All that they want is a sound and equalized currency, to be easily and safely transferred to or from the most distant places, and security that the bank will not use its power to the public detriment –which latter, we humbly think, would have been accomplished under the law which the president rejected.”

In 1819 Niles was of the opinion that congress had no constitutional right to charter a bank, regardless of what the supreme court decided; in 1832 he felt the opposite: congress does have a right to grant a charter, and it should. In 1819 he wrote that 100 shady characters owned four-fifth of the shares of the bank, but by 1833 it was “innocent persons who have invested their money [not their notes, their money]” in the bank.

In 1831, few months before his death, the bank-friendlies dragged out ex-president James Monroe to support them in their agitation for a renewal of the charter;  and Monroe obliged (poor Jefferson hoped at one time that “four and twenty years” of republican administration (Jefferson, Madison, Monroe) would be enough to set the united States on republican footings and on republican path;  both of his apprentices gave themselves over to the bank):—

Letter from Silas Burrows to James Monroe
New York, January 17th, 1831.

My dear sir:  Believing myself in your estimation one of those friends whose motives and conduct, since I had the honor of first being acquainted with you, cannot be mistaken, I take the liberty of trespassing on your goodness to obtain information which cannot be as satisfactorily received from any other source.

I am sensible our country will be happy in hearing those opinions which emanate from the revolutionary patriot who shed his blood on the battle-field, and who presided for eight years over the destinies of our country, during which period every blessing was possessed by our happy land.  Will you be so kind as to give me your sentiments relative to the effect of the U.S. bank on our national currency, and what your opinion is in relation to the renewal of its charter ?  The situation in which the government was placed without its aid, during the last war, its general advantages in regulating exchange, facilitating the remittances of government and individuals from various parts of the union, and generally its importance connected with the best interests of our country ?

I am, &c.
Silas R Burrows

Letter from James Monroe to Silas Burrows

Dear sir— The confidence I have in your rectitude and patriotism, will indure me to give an explicit answer to the general interrogatories contained in your letter of the 7th, though I fear that my continued weak state at health will make it less satisfactory than it otherwise might be, especially as I have none of the official documents with me which are calculated to illustrate the object.

You ask me what is my opinion of the effect which the U. States bank has on the national currency, and as to the policy of renewing its charier ? — what the situation of the government without its aid during the last war was ? — what its general advantages in regulating exchange, in facilitating remittances to individuals, and its
general importance ?

When the old U.S. bank was first instituted, I was one of those who voted against it in the senate.  I doubted the power of the government under the constitution to make such an establishment, and was fearful that the influence which it would give to the government over the moneyed concerns of the union, would have a very improper effect on our free system.  The bank was instituted soon after the government was adopted, and at a period when the question of the relative powers of the two governments excited great feeling, and divided the congress and the union into very jealous and violent parties.  I was of that party which construed the powers of the national government strictly, and sought to impose on it correspondent restraints.

So far as any change has since taken place in my opinion, it has been the result of experience, and prompted by belief that such change would give strength to the system, and not weaken or endanger it.

[ As Hezakiah Niles related to us in his articles between 1818 and 1823, during James Monroe’s presidency the Bank of the United States was nothing but state licensed corruption;  and from this experience Mr. Monroe derived and learned that the government of the United States cannot exist without this bank;  and from his experience during the war Mr. Monroe concluded that the government needs a bank which lends back to the government the government’s own credit, which is, by the way, the basis of this bank’s operations and without which this bank could not exist.  Using the same logic, he could have concluded that farming the navy out to privateers is better than relying on a state-owned fleet.]

Between such a bank, and any arrangement which the government can make, the alternative must be between a bank of the government itself, and under its exclusive control, a reliance on its own resources and surplus funds, deposited in a manner to produce the best effect, and a dependence on the banks of the several states.  I have no hesitation in declaring it as my decided opinion that neither of these could accomplish the great objects contemplated, and that each of them is liable in other respects to the most serious objections.  To a bank of the government, this remark is applicable in both views, and with peculiar force in the latter.  If confined to the metropolis, it could not extend its discounts beyond a very limited circle, nor its agency as a deposit for the revenue received in the several states –nor for remittances to individuals– and for other objects it would be equally limited.  Such an institution requires an active supervision by those for whose benefit it is intended.  The regular official duties of all the departments in the executive render it impossible for that branch to perform that service without an interference with those duties to the injury of the public.

If branches should be established, their position might enable them to remedy some of the defects stated, but they would accumulate others of much greater force.  The interference with the constitutional and regular duties of the executive would, in the same degree, be increased.  But that is comparatively a slight evil.  A bank thus instituted, being under the control of the executive by the appointment of its directors, and in all its operations, might, in the hands of a bad administration, be wielded as an instrument to sap the foundation of the government itself.  Appeals would be made to the government from every part of the union, for its influence in obtaining discounts, and thus a seduction might be practised to a great extent for the worst purposes.  The influence would be reciprocal.  Those connected by such a tie with the government would be looked to for support at elections, who would not fail to render it.  Thus the revenue of the nation, raised by taxes on the proper objects to support their free government, might be made an instrument to its overthrow.

[ the Bank of the United States had done exactly that: it supported bank-friendly senators and representatives and presidential candidates –and you have witnessed it with your own eyes.  As for discounting: no one said the central bank should be a discount house;  discounting –if there is any need for it– should be done by discount houses using silver and gold coins, as Thomas Jefferson suggested –you knew that, too.]

The second alternative suggested, a reliance on the surplus funds for the accomplishment of the objects contemplated, it must be obvious, must fail in every instance.  The revenue of a government is generally limited to certain specified objects, according to an estimate for each, and to which it is appropriated.  The fund raised, sometimes falls short of the object.  It seldom exceeds it in any considerable amount.  For the want of a surplus it must lie idle in the treasury until appropriated, and if appropriated as a provision for an emergency, for war for example, it must still lie idle in the treasury, until that event occurs, or be loaned out.  It could not lie idle.  The whole nation would revolt against it, and if loaned out, it might be impossible to obtain it when called for, and might even be lost.  In this mode, the regulation of the value of the currency, of exchange, and of rendering service, by facilitating remittances, would be abortive.

The third alternative which has been suggested, a reliance on the state banks, would be equally unproductive.  The government would require no aid except in time of war, when immense sums would be necessary, which could be procured only by loans, and when application should be made to them, there is good cause to apprehend that each would endeavor to obtain the best terms it could.  There is no particular bond between them and the national government, and, impelled by their interests and that of the stock-holders, it is natural that they should pursue that course.  Should such an emergency arise as menaced the overthrow of the government, the interest thereby excited might be paramount, and force the banks, under the direction of the stockholders, to unite in a common effort to save the country.  But the great object is to prevent such a crisis by a command of funds, which would enable the government to arrest it.  In every other object the state banks would fail.  There being no standard to which all must adhere, no connection between those of the different states, and many of them with limited funds, and in embarrassed circumstances, they would neither regulate the value of coin, of exchange, nor facilitate remittances.

A national bank occupies different ground.  Connected with the government by its charter, and its capital, which consists of stock, in which the government participates in a certain degree, there is no instance in which, on principle, there can be a difference of interest between them, and many powerful considerations by which the interest of the bank must stimulate it, to support the credit of the government in any situation in which it may be placed.  If the credit of the stock should sink, the capital of the bank would decline in equal degree: the effect of which would be felt in all its operations.  Its paper would depreciate, and a check be given to its circulation, if not an entire suspension.  Standing at the head of the moneyed operations of the government, it is its intermediate agent in making remittances to banks and individuals throughout the union, and likewise between individuals, from which much credit and influence are gained, if not profit.  It has the means, and may be considered as the most powerful agent in raising and sustaining the circulating medium on a par with specie throughout the union, and of elevating the state banks to that standard, by subjecting them to the necessity of reaching and adhering to it, to sustain their credit, and even their existence.  Let the credit of the government sink, and all these advantages are lost.  The bank therefore, from a regard to interest, is bound to sustain it.  The directors, except the few appointed by the government, are elected by the stockholders, and are amenable to them.  It gives its support, therefore, to the government, on principles of national policy, in the support of which it is interested, and would disdain becoming an instrument for any other purpose.

[ On February 19, 1838, in opposition to the Independent Treasury concept, senator Henry Clay, Hezakiah Niles’s object of admiration, explained how non-legal-tender Treasury notes, as national currency, would operate, and why they would be the best the nation ever had, and why bankers would not want such currency and genuine specie payment;  why these bank-friendly politicians do not want to think outside the box of the good offices of a privately owned grand central bank that is using the government’s credit and assets]

Here is one of them, said Mr. Clay.  [He here held up to the gaze of the Senate a Treasury note, having all the appearance of a bank note, colored, engraved, and executed like any other bank note, for $50.]  This is a Government post note, put into circulation, paid out as money, and prepared and sent forth, gradually to accustom people of this country to Government paper.

I have supposed $10,000 to be received in the mode stated by a person entitled to receive it under an appropriation law.  Now let us suppose what he will do with it.  Any where to the South or West it will command a premium of from 2 to 5 per cent.  Nowhere in the United States will it be under par.  Do you suppose that the holder of these drafts would be fool enough to convert them into specie, to be carried and transported at his risk ?  Do you think that he would not prefer that this money should be in the responsible custody of the Government, rather than his own insecure keeping ?  Do you think he will deny to himself the opportunity of realizing the premium of which he may be perfectly sure ?  The greatest want of the country is a medium of general circulation, and of uniform value every where.  That, especially, is our want in the Western and interior States.  Now, here is exactly such a medium; and, supposing the Government bank to be honestly and faithfully administered, it will, during such an administration, be the best convertible paper money in the world, for two reasons:  The first is, that every dollar of paper out will be the representative of a dollar of specie in the hands of the receivers general, or other depositaries;  and, secondly, if the receivers general should embezzle the public money, the responsibility of the Government to pay the drafts issued upon the basis of that money would remain unimpaired.  The paper, therefore, would be as far superior to the paper of any private corporation as the ability and resources of the Government of the United States are superior to those of such corporations.

The banking capacity may be divided into three faculties: deposites, discount of bills of exchange, and promissory notes, or either, and circulation.  This Government bank would combine them all, except that it will not discount private notes, nor receive private deposites.  In payments for the public lands, indeed, individuals are allowed to make deposites, and to receive certificates of their amount.  To guard against their negotiability, a clause has been introduced to render them unassignable.  But how will it be possible to maintain such an inconvenient restriction, in a country where every description of paper imposing an obligation to pay money or deliver property is assignable, at law or in equity, from the commercial nature and trading character of our people ?

Of all the faculties which I have stated of a bank, that which creates a circulation is the most important to the community at large.  It is that in which thousands may be interested, who never obtained a discount, or made a deposite with a bank.  Whatever a Government agrees to receive in payment of the public dues, is a medium of circulation, is money, current money, no matter what its form may be, Treasury notes, drafts drawn at Washington, by the Treasurer, on the receiver general at New York, or, to use the language employed in various parts of this bill, “such notes, bills, or paper, issued under the authority of the United States.”  But if there were no express provision of law, that these drafts should be receivable in payment of public dues, they would, necessarily, be so employed, from their own intrinsic value.

The want of the community of a general circulation of uniform value everywhere in the United States would occasion vast amounts of the species of drafts which I have described to remain in circulation.  The appropriations this year will probably fall not much short of 30 millions.  Thirty millions of Treasury drafts on receivers general, of every denomination, and to any amount, may be issued by the Secretary of the Treasury.  What amount would remain in circulation cannot be determined a priori, I suppose not less that 10 or 15 millions;  at the end of another year, some 10 or 15 millions more;  they would fill all the channels of circulation.  The war between the Government and State banks continuing, and this mammoth Government bank being in the market, constantly demanding specie for its varied and ramified operations, confidence would be lost in the notes of the local banks, their paper would gradually cease to circulate, and the banks themselves would be crippled and broken.  The paper of the Government bank would ultimately fill the vacuum, as it would instantly occupy the place of the notes of the late Bank of the United States.

The view above presented is supported by experience, and particularly by the events of the late war.  When the war commenced, the government had not the funds which were necessary to support it, and was in consequence forced to resort to loans, which were with difficulty obtained from any quarter, even in a limited degree, and on unfavorable terms.  I have not the official documents before me, and cannot state the sources from which any loans were obtained, nor the conditions, with the decline of the public credit as the war advanced.  I well remember, however, that when I was called by the president to the department of war, on the 31st of August, 1814, the certificates of the treasury were selling at $80 in the $100, by which $20 were lost.  It was evident that if a reliance was placed on the sale of certificates only, that a still further decline would ensue, and that the worst consequences might be apprehended.  The country was invaded through the whole inland and maritime frontiers, and powerful squadrons were at the mouth of every bay and river leading to our principal cities, which were threatened with attack and ruin.  The metropolis of our union had been forced, and its public buildings destroyed.  Such was the state of the country, and the funds, when I entered the department of war.  Under such circumstances, an appeal was made to the patriotism and interest of the cities, and banks within them, by the department of war, with the sanction of the president, for loans of money necessary for their own defence, for that of the maritime frontier, and the union.  For the first loan that was obtained, one million of dollars from the city of New York, which took place a few days after I entered the department, no price was fixed.  As the treasury notes were selling for $80 in the $100, that was claimed, but not acceded to.  It was left for subsequent adjustment, to be settled on fair principles.  Several millions of dollars were obtained from the District of Columbia and principal cities throughout the union, and, according to my recollection, at par.  This proves that until the union is threatened with ruin, no loans can be obtained in emergencies, without a national bank, otherwise than at a great sacrifice.  These considerations led to a change in my opinion, and induced me to concur with the president [Madison] in the propriety of instituting such a bank after the conclusion of the war in 1815.

As to the constitutional objection, it formed no serious obstacle.  In voting against it in the first instance, I was governed essentially by policy.  The construction I gave to the constitution I considered a strict one.  In the latter instance, it was more liberal but, according to my judgment, justified by its powers.

The above sketch contains my sentiments on the subject of your several interrogatories, which I communicate to you not for public view, but in a spirit of confidence.  Since my retirement I have sought to avoid all political controversies.  Having concurred with the president in the propriety of instituting the latter bank, my opinion was not withheld, and is, I presume, known, as that it remains unaltered.  Should a justification of my conduct for the change of sentiment in the interval between the institution of the first and second bank become necessary, or any other appeal is made, to make it a public duty to explain the cause of that change, I shall not withhold it.  I shall be attentive to the course of events, and not fail to perform that duty, should either call be made on me.

I am, dear sir, with great respect and sincere regard, yours
James Monroe.

Monroe’s cabinet was filled with banker-ites:
William Crawford, secretary of the treasury, a life-time supporter of the bank, voted for renewal in 1811;
William Wirt, attorney general, attorney to bank of US, joined the anti-mason party which was pro-bank and anti-Jackson, was its presidential candidate in 1832;
QC Adams, secretary of state, life-time federalist, warm friend of Nicholas Biddle and the bank;
Samuel Southard, secretary of navy, a whig, in 1841 voted for the charter that was vetoed;
John Calhoun, secretary of war, at that time pro-bank, in 1816 instrumental in passing the charter in the house

according to this here explanation of Niles, until 1823 the bank of US was a house of corruption and it was badly managed, but from 1823 on, (in the firm hands of Nicholas Biddle), the bank became good and the management of it fine & upstanding………………. right;  in 1827 Biddle introduced the small-denomination branch drafts which were payable in another branch, in another city

Niles’ Register
August 18, 1832.

Well— the bank, though not, (as I thought), rightfully started, went into operation under apparently favorable circumstances –but it had an Herculean task to perform.  The directors were much mistaken in the extent of their means.  A disposition seemed manifest of a coldly-calculated design in certain of them to enrich themselves, by all means and any means.  The country was soon filled with bitter complaints against the bank –no doubt, in part, originating in the calls made upon the managers of the new rag-shops to redeem their rags.  Perhaps, the bank acted imprudently, and attempted too much.  A return to specie payments was not an easy thing to bring about, though the old state banks powerfully assisted — and hence some retrograde proceedings in the bank rendered it still more unpopular;  for the speculations in the stock of the bank, with its hypothecations, &c. had overflowed the minds of thousands with disgust.

It is not my present purpose to shew whether this unpopularity and disgust were deserved, or not.  They existed;  and I was one of those who warmly entertained them.  I believed that the selling price of the stock had been dishonestly forced up, for the benefit of those who commanded the operations of the institution.  Subsequent information has taught me, that, in my heart –(for I personally attacked no one), I wronged certain individuals;  but, as to others, my original opinions remain as they were.  For I cannot apprehend that it was honest to induce persons to purchase the stock at 140 dollars, or more, the share.  And to this want of honesty, the body of the directors, (in my opinion), made themselves a party, by permitting hypothecations of stock at 125 per share, (or per cent.) that the jobbers might carry on their operations.

Thus circumstanced, fresh excitements or new resentments revived my old constitutional objections to the bank —[so your constitutional objection was based not on the constitution, but on feelings;  or, you are now contorting in coming up with an explanation for your changing of coat];  and, after much and serious reflection, I commenced a goose-quill battery on this establishment, and against the paper-system generally, in February 1818 — the bank of the United States, as well as others to which I stood opposed, yet being in the fullness of power, and possessing a mighty influence over numerous and influential classes of the community.  For this, the ruin of my establishment was freely predicted, as I felt pretty confident that it would be, if I failed;  for many were in fear of the banks.  Various circumstances occurred to keep up the excitement –and, persecuted and abused, I fought as wickedly as I could.  After a while the “paper shot” began “to tell” and public opinion ran side-by-side with it.  A committee was raised in congress to investigate the affairs of the bank, and, “to make a long story short,” the stock which had been selling at 150 and 155 per cent, advance, tumbled down to 20 per cent below par, before the battle was over:  for in the early stage of the affray, some heavy stockholders, foreseeing that the bubble would burst, cashed their stock, and retired;  and, like “patience on a monument,” waited events.  Two or three of these made it a rule, for several years after, to pay me their subscription to the Register in gold.

In the early operations against the bank of the United States, and the paper-system as it was, it certainly was my wish, and that of others who acted with me, to break down the whole together –an extravagant idea, and often times extravagantly urged.  But it was not a time to look at things calmly, and I thought that to retreat was to be destroyed.

[ a paper system is always a paper system;  it is no different in 1832 than it was in 1819;  and you know it your opinion/observation of the bank-paper system was merely in hot haste, in the heat of the moment ?!?
In 1818 you quoted Isaac Pierson and claimed it was an honour to know him:

Of all aristocracies none more completely enslave a people than that of money.  They hold the purse string of society, and by monopolizing the whole of the circulating medium of the country, they form a precarious standard, by which all the property in the country are valued, thus rendering the whole community dependent on them.

now you discard him as one who rushed to extravagant judgement in hot haste ]

Yet no sooner did the ’vantage ground appear to be gained, than Reformation, not destruction, was sought –for which I was soundly scolded by many friends in different parts of the country, some of whom I have the pleasure to know now think of the bank as I do.  It was not right to injure innocent holders of the stock, because of the bad conduct of a few –and, on this ground, I gladly retired from a course of proceedings which had oftentimes been repugnant to the general disposition of my mind –content that I had exerted myself to the utmost to shew the necessity of reform;  and with the hope that it would soon he effected –as it was, and as soon as it could be.

[ This change of coat coincided with Nicholas Biddle’s becoming president of the bank.  What did he have that Cheves didn’t;  what charm could he apply that Cheves couldn’t ?  Longdon Cheves was not a federalist, he was leaning towards the constitution and a limited union government !!  Nicholas Biddle, on the other hand, was a dyed-in-the-wool federalist.  That is what decided for Hezakiah Niles whether the bank was good or bad.
On September 5, 1818, you wrote, on account of the activities of the bank:— “though the minds of many dealing men may be brought to bow to the mighty, the sturdy free-born laborers of the United States, the agriculturalists, mechanics and manufacturers, with the productive people at every class, will rally round and save the liberties of their country.  As my soul lives –as l humbly hope for happiness hereafter– I would rather be a subject of the Russian autocrat than a creature to live on the favor of a monied aristocracy.”
and in 1832 here you are singing the praises of the monied aristocracy, while the agriculturists, the mechanics, the manufacturers (loco-focos) vote for Jackson]

And, though for some years after I retained my opinions as to the unconstitutionality of the bank –I have never seen any just causes of complaint urged against its general management; and, supported by and supporting the solvent state banks, it has annually saved the people vast sums, by an equalization of the currency and the facility of exchanges –on which latter account I have paid 700 dollars a year, and now do not pay 100;  but would expect to pay 700 again were the bank of the United States destroyed, or the “monster” projected by gen. Jackson in his first message, established.    —[ In 1823 you observed that the first bank closed without even a tremour, much less the predicted catastrophy, yet now you are predicting the same
and now you reveal your despicable spots: the government providing for itself a fiscal agent “founded upon the credit of the Government and its revenues” is monster, but a Girard-Baring branch bank, usurping the government’s credit and revenues, is a blessing.  why you bullshitted the readers in 1819 we do not know; but your banker-ite federalist colours are showing clearly now —if you are not doing it for money, as Clay, Webster, Sergeant &co., you are doing it for religion, for wickedness]

The idea of a Treasury Bank, after the fate of the treasury notes is not less ridiculous than its establishment would be dangerous.  Is experience to teach us nothing ?    —[ had such treasury bank been established in 1791, and bank charter and bank paper prohibited altogether, all the evil caused by bankers could have been avoided; but you don’t want that, you want bank paper, speculation, boom-bust credit cycle, permanent debt]

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