"Justice, full and ample justice, to every portion of the United States, should be the ruling principle of every freeman, and should guide the deliberations of every public body, whether it be state or national." - Andrew Jackson.
During the existence of the human race, from the earliest dawn of civilization to the close of the present century, the power exercised over the industry, property and conscience of man by cunning and ambition has assumed many forms.
The form of power which first appeared to oppress and plunder the race, was exemplified in those celebrated conquerors of antiquity, who traversed the earth in their bloody careers, transforming blooming fields and rich and populous cities into deserts, overthrowing whole nations, sacrificing on the battle, fields countless myriad's of their fellow men - merely satisfy a species of madness dignified by the name of ambition.
Another and a more dangerous form of misapplied power resulted from the intellectual tyranny exercised by that shrewd class, the priest-hood, over the conscience and religious beliefs of the great mass of mankind.
From the days of the Pharaohs down to this period, man, from his instinctive veneration for a Supreme Being, has been so peculiarly susceptible to the arts, wiles, and cunning of priest-craft to such a degree as to excite universal surprise.
Those gross superstitions, engrafted on the inherent religious nature of man, by that wary intellectual superiority, which weighed down the noblest traits of the human mind; which bred bitter religious animosities; unheard of extortion's by the corrupt and infamous priestly aristocracies of various so-called religions, were the well-matured and craftily-devised schemes for plunder by designing men.
It is almost inconceivable that the ancient Egyptians, that admirable race, whose noble genius and wonderful energy reared those stately temples, the magnificent cities, and the stupendous pyramids along the valley of the Nile, should worship the man-eating crocodile, the savage vulture, the grinning ape and the crawling lizard.
This race is an example of that soul-darkening superstition which hung like n pall over the intellect of man.
The countless wars which afflicted Europe, Asia, and Africa for nearly eighteen centuries; which drowned the finest aspirations of humanity in blood; which desolated the fairest parts of the earth; which stemmed the tide toward a higher and a grander civilization, sprang from the base superstitions originated by the grasping priesthood, who lived in sloth and luxury upon the labor of the deluded mass of mankind.
The celebrated Vattel, in the twelfth chapter of that noble work, The Law of Nations, awards us a faint idea of the enormities practiced upon the people of Europe by the clergy.
Taine, in his History of France, shows that the ecclesiastics had seized upon the most valuable and fertile portion of the territory of that country, and that the oppression practiced by them upon the French people was one of the leading causes of the great revolution.
The third and most insidious and most dangerous form of power that has yet appeared to threaten the material well-being of the race; which new holds every civilized and semi-civilized people in its merciless grasp; which is appropriating to itself the productive energies of the world; which is subordinating the press, the pulpit, and the statesmen of the day to its ambitious ends; which openly boasts of its nefarious methods in the courts, legislatures, and other parliamentary bodies of nations, is the modern money power.
That there is a gigantic combination of the money dealers, a powerful international trust of usurers, asserting a superiority above all jurisdictions, and having for its servants the so-called statesmen and potentates of various nations, who willingly register the decrees of this money power upon the statute-books of the respective states, is a fact that can bc sustained by irrefutable evidence.
This great international monetary trust now menaces the very life of this nation, and the people must dethrone it and subordinate it to their will, or American liberty will vanish.
The Declaration of Independence, which announced the true principles of government, was a memorable protest against the rapacious money power composed of the landed aristocracy, the trading, commercial, and manufacturing interests of England, which, by a long series of vicious and unconstitutional acts of Parliament, sought to eat out the substance of the colonists.
The war of the Revolution, which followed, set its seal of approval upon the patriotic efforts of the colonists against oppression, and freedom was achieved.
Upon the conclusion of that most righteous conflict, n more perfect union was formed to establish justice, insure domestic tranquillity, provide for the common defense, promote the general welfare, and secure the blessings of liberty for themselves and posterity by the adoption of the Federal constitution.
General Washington was chosen the first President by a unanimous vote.
For his constitutional advisers he appointed Thomas Jefferson for Secretary of State; Alexander Hamilton for Secretary of the Treasury; James Knox for Secretary of War; and Edmund Randolph for Attorney General.
Jefferson, who was the most accomplished scholar in America, the profoundest thinker upon the principles of Government of any age, the friend of humanity and a staunch believer in the capacity of the common people for self-government, was a representative of that industrial element which sustains society by its labors.
Hamilton, who was an aristocrat by birth and breeding, and who was connected by marriage with the wealthiest family of the landed aristocracy of New York, was a strong representative of the trading, banking and commercial element of New York City and New England, which constituted the Tory clement of the Revolution.
The presence of two statesmen of such wholly antagonistic views and temperaments in the cabinet of Washington, naturally originated divisions of political sentiment, from which sprang two great political parties.
One of the first measures which received the aid and sanction of Hamilton was the act of Congress adopted February 25, 1791, chartering the Bank of the United States.
Jefferson, whose penetrating mind perceived the vast power for mischief lodged in an Institution of that nature, in a powerful communication to the President, advised him to veto the bill. Washington, however, accepted the views of Hamilton, his Secretary of the Treasury, and signed the bill, and it became a law.
By the terms of the act incorporating the bank, its capital was fixed at ten millions of dollars. The power to issue its circulating notes as money having full legal tender quality for the payment of taxes and demands due the Government was conferred upon it. It was made the depositary of the revenues of the Government, and therefore it became the fiscal agent of the Treasury department. It was chartered for the period of twenty years. For the extensive powers and exclusive privileges bestowed upon it by Congress, the bank paid the United States a small bonus.
This bank, therefore, was a monopoly sustained by the credit and the revenues of the United States. It had the solo power of issuing legal tender paper money, and its actual capital was trebled in its earning capacity by loaning its circulating notes at interest, and by having the control of the government revenues.
This was the first appearance of an ORGANIZED MONEY POWER in the United States.
Thomas Jefferson, by voice and pen, in language of rare power and felicity, pointed out the dangerous possibilities of the bank to influence the politics and business of the nation.
In a letter to Madison in 1793, Jefferson stated that the bank party consisted of the fashionable circles of Philadelphia, New York, Boston and Charleston (natural aristocrats). 2. Merchants trading in British capital. 3. Paper men. Against the bank were 1. Merchants trading on their own capital. 2. Irish merchants. 3. Tradesmen, mechanics, farmers and every other possible description of our citizens.
In 18ll, Congress refused to re-charter the bank, and as it had during its brief career obtained the mastery over the entire business of the country by its loans of circulating notes and the public revenues, and had built up a system of credit in the commercial centers, to intimidate Congress and the people, it made a concerted contraction of the currency and brought on the great panic of 18ll.
United States Senator Benton, in a speech in the senate during the administration of Jackson, thus graphically states the manner in which the bank con-trivet to manufacture public sentiment in its favor He says: -
"All the machinery of alarm and distress was in as full activity at that time as at present, and with the same identical effects- town meetings, memorials, resolutions, deputations to congress, alarming speeches in congress. The price of all property was shown to be depressed. Hemp sunk in Philadelphia from $350 to $250 per ton; flour sunk from $ll.00 per barrel to $7.75; all real estate fell thirty per cent.; five hundred houses were suspended in their erection; the rent of money rose to one and a half per month on the best paper; confidence destroyed; manufactories stopped; workmen dismissed and the ruin of the country confidently predicted."
The Senator goes on to show that great public meetings werc held, inflammatory speeches made, cannon fired, great feasts given - all engineered by the bank. That those members of Congress who favored the bank, traveled with public honors like conquering generals returning from victorious battlefields, saluted with acclamations by the masses, escorted by processions, and that those members favoring the bank were exhibited throughout the United States as though they werc some superior beings from the celestial regions.
In 1812 occurred the second war with England, and the bank threw its whole influence against the United States during that great struggle.
Evidence is not wanting to sustain the charges made that the bank element of New England planned the separation of that section from the Union.
During the continuance of this war, the United States issued its treasury notes with full legal tender power, and they were gladly received by the people.
Albert Gallatin, for twelve years Secretary of the Treasury, and one of the ablest statesmen of the day, thus bears valuable testimony to the efficiency of government paper money in carrying the United States through that war. He says: -
"The paper money carried the United States through the most arduous and perilous stages of the war, and though operating as a most unequal tax, it cannot be denied that it saved the country."
In a letter to John Tyler, May 28, 1816, Jefferson says:-
"The system of banking we have both equally and ever reprobated. I contemplate it as a blot left in all our constitutions which, if not covered, will end in their destruction, which is already hit by the gamblers in corruption, and is sweeping away in its progress the fortunes and morals of our citizens. Funding I consider as limited rightfully to a redemption of the debt within the lives of a majority of the generation contracting it; every generation coming equally by the laws of the Creator of the world to the free possession of the earth He made for their subsistence unincumbered by their predecessors. And I sincerely believe with you that banking institutions are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale."
In a letter of March 2, 1815, written by Jefferson to the celebrated French author, Say, he said: -
"The government is now issuing treasury notes for circulation, bottomed on solid funds and bearing interest. The banking confederacy and the merchants bound to them by their dcbts will endeavor to crush the credit of these notes; but the country is eager for them as something they can trust to, and so soon as n convenient quantity of them can get into circulation the bank notes die."
It has been stated that the bank, during the war of 1812, exerted its whole influence against the United States. It was a matter of little concern to it that Great Britain had impressed into her service thousands of native born citizens of this country, and compelled them, against their will, to man British guns. What cared the bank that hundreds of American merchant vessels were confiscated, in a time of profound peace, by orders of the English government, and that repeated insults had been heaped on this republic by the insolence of British statesmen?
Although the bank was a creature of the legislative powers of congress, and had received vast financial benefits from the country, it sought to embarrass the government in its struggle against Great Britain by arraying the moneyed class against the struggling republic.
Money could not be obtained by means of loans to organize, arm, and equip the American armies and to construct vessels of war to protect American commerce. In this emergency the counsel of Jefferson was requested, and he advised the issue of treasury notes by the government in lieu of borrowing.
In a letter dated September ll, 1813, he thus stated his position: "The question will be asked, and ought to bc looked at, What is to be the course if loans cannot be obtained?" There is but one - "Carthago delenda est." Bank paper must be suppressed, and the circulating medium must be restored to the nation to whom it belongs. It is the only fund on which they can rely for loans; it is the only resource which can never fail them, and it is an abundant one for every necessary purpose. Treasury bills, bottomed on taxes, bearing or not bearing interest, as may be found necessary, thrown into circulation will take the place of so much gold and silver, which last, when crowded, will find an efflux into other countries and thus keep the quantum of medium at its salutary level. Let the banks continue, if they please, but let them discount for cash alone or for treasury notes."
The sound advice couched in this letter was heeded by the government, and the country was carried safely through the second war for independence.
Immediately after the close of the war, the bank put forth renewed efforts to secure a new charter.
At this juncture, William Cobbett, the celebrated English writer and economist, transmitted a letter to
Mr. Dallas, Secretary of the Treasury under President Madison, in which he strenuously urged him to oppose the project.
As a warning against chartering a bank of issue, Cobbett pointed out the immense power of the Bank of England to ruin the tradesmen of that country, and to dictate the political sentiments of that people. He said: -
"Sir: I have read with great care and uncommon interest your proposition to congress, under date of 6th December, 1815, for the establishment of a national bank; and as a part of the reasons which you urge in support of that proposition appear to bc founded on the experience of a similar institution in England, I cannot refrain from endeavoring to show you what some of these effects really have been, and what is at present the situation of this country, owing, in a great measure, to the existence of a great banking establishment closely connected with the government.
"It is the evil of a national bank, as experienced by us, to which I particularly wish to draw your attention. You profess, and I dare say very sincerely, so to frame this establishment in America that it shall bc independent of the Government. It is next to impossible, indeed, that you, or any of the persons in whose hands the Government is, should have a desire to make a bank what our bank has long been; but while there is a possibility of its becoming, in any hands or at any time, anything resembling this bank, it must be a matter of serious dread to every friend of America that such an establishment is likely to take place. Sir, it is as a bank of discount that this establishment exercises the most pernicious influence. The directors, who are a chosen divan, regulate these discounts, and in so doing decide in some sort upon the rise or fall, the making or the ruin, of all men in trade, and indeed 17 of most other men, except such as have no capital at all.
"The amount of these discounts at any given time is supposed to bc about L6,000,000, as they are never for more than two months. Here is a sum of thirty-six millions lent every year to individuals. The bills for discounts are sent in; the directors consent or not, without any reasons assigned. Now, sir, consider the magnitude of the sum discounted. It is little short of half a million dollars a day, Sundays excepted. It is perfectly well known to you that in state of such things almost every man in trade is under the necessity of having a regular supply from discounting. If he be excluded from his fair share here, he cannot trade with the same advantage as other men trade. If he be in the practice of discounting, and if his discounts be cut off, he cannot go on; he stops payment and is frequently ruined forever, even while he possesses property which, with the fair chances of time, would not only enable him to pay his debts but to proceed in prosperity.
"I beseech you, then, sir, to look seriously at the extent of the dangerous power of these bank directors. You must see that they hold in their hands the pecuniary fate of a very large part of the community, and that they have it in their power, every day of their lives, to destroy the credit of many men, and to plunge their families into shame and misery. If I am asked for their motives to act like these, to pursue such partiality, to make themselves the instruments in committing such detestable injustice and cruelty, need I point out to you that they have been and must be constantly actuated by the strongest political prejudices? The fact is, however, that the Bank of England, by means of its power of granting or withholding discounts, has been, and is one of the most potent instruments of political corruption, on the one hand, and of political vengeance on the other hand."
In speaking of the great profits reaped by that bank, this writer said: -
"I have given this rough statement that you may be struck with the magnitude of the object I present to you. Diminish the amount as much as you fairly can and even then you will dwell upon the subject with a deliberation you cannot prevent. One fact will at least corroborate what I have suggested; viz., that the Bank of England had L20,000,000, or nearly $100,-000,000, surplus in nineteen years, after paying bonuses and dividing 7 per cent, per annum, which was two fifths more than legal interest. I will not here allude to the United States Bank, to which I may hereafter devote an essay. "
The array of facts set out by this writer, in which he exhibited the appalling power of this bank, did not deter the American statesmen of that day from their attempt to fasten a like institution on this country.
In 1816, congress chartered the United States Bank with a capital stock of thirty-five million dollars; to it was delegated the sole power of issuing notes receivable by the United States for taxes and demands due it; and designed to serve as the Treasury Department of the government by receiving and disbursing the public revenues of the nation.
Section 21 of the Bank Act was as follows: -
"That no other bank shall be established by any future law of the United States, during the continuance of the corporation hereby created, for which the faith of the United States is hereby pledged. Provided, Congress may renew existing charters for banks within the District of Columbia, not increasing the capital thereof, and may also establish any other bank or banks in said District, with capitals not exceeding, in the whole, six millions of dollars, if they shall deem it expedient."
By this section Congress surrendered its constitutional powers to legislate upon a subject within its exclusive jurisdiction for the period of twenty years, Not satisfied with a monopoly of the currency and banking of the country, the unlimited greed of the wealthy stockholders of this bank demanded and secured frown Congress, a pledge of the public faith that the essential powers of the Government should lie dormant for twenty years!
In the early days of the republic, the accursed spirit of special privileges had shorn the nation of its means of self-preservation.
For the exclusive powers conferred upon it, the government received in return for this valuable franchise a small annual bonus.
It will be ascertained from the enormous powers enjoyed by the bank, that it obtained a monopoly of the circulating medium of the country; that, in addition to its capital stock of thirty-five million dollars which constituted its primary loanable fund, it would earn interest upon the circulating notes issued by it, as wcll as usury upon the government revenues when used in discounts.
Therefore, by force of law, the interest earning capacity of its capital was morc than doubled.
It was a colossal moneyed monopoly.
The bank rapidly obtained a practical control over the business of the nation, and it would tolerate no opposition. By its methods of conferring substantial favors upon the influential journals of the leading commercial cities, and by its loans to powerful members of both branches of Congress, it was enabled to rally to its support a coerced and manufactured public sentiment - far-reaching and wide-spread as the limits of the Union.
The financial power of the bank, under its able and unscrupulous management, had become so dominant in its influence that it deemed itself master of the government and the people.
This monopoly believed in the Hamiltonian maxim that a "Public debt is a public blessing," and, during its career as the fiscal agent of the Government, threw every obstacle in the way of the payment of the national debt.
It may be inquired by some why the bank should oppose the payment of the debt? The reason is obvious. The larger the debt, the more revenues necessary to pay the interest charge thereon, and, therefore, the more profit to the bank from the use of the increased revenues in making loans and discounts.
From 1816 to 1828, it was the sole arbiter of the financial affairs of the nation, both public and private. Its power in politics was immense, and it swayed elections at will.
The most eloquent Senators and Representatives were continually sounding its praises in the halls of Congress as the most perfect financial institution ever devised by the wit of man. Deluded with the idea that it was invincible in its influence, and that it was a necessary part of the machinery of Government, it was confident that its charter would be renewed before its expiration by limitation of law.
The audacity of the bank was destined to receive a check in its career of uninterrupted power and success, and its astonishing abuses of its franchise where to be mercilessly exposed, and it was doomed to fall never to rise again.
In the presidential election of 1828, Andrew Jackson, the hero of New Orleans, was elected chief magistrate by a great majority, and the bank, its defenders, and retainers, were fated to run counter to a patriot and statesman of invincible will and unflinching integrity.
At the time of this election, and prior thereto, the public debt was being reduced rapidly, and it would not be long before the United States would not owe a single dollar.
As has been stated, the United States bank strongly opposed the payment of the debt for the aggrandizement of its own selfish purpose.
On the 8th day of December, 1829, President Jackson, in his first annual message to Congress, announced to that body that he was opposed to the bank, and that he would not favor a renewal of its charter. In the year 1830, a large surplus of public revenues accrued to the United States, and according to law, the money was deposited in the bank. This accumulation of revenues served to augment the power of the bank as it increased its resources, and, therefore, its facility to make additional loans and discounts in the various commercial centers of the country.
President Jackson discerned the policy of the bank, and in 1830 he advocated the passage of a law distributing these surplus revenues among the states. He again opposed the renewal of its charter.
United States Senator Benton, of Missouri, a man of great energy, extensive learning, and commanding ability, thoroughly understood the means by which the bank had obtained its mastery over the commerce and industry of the nation, and, therefore, at that session of congress, he presented a resolution in the United States senate to the effect, that the charter of the bank ought not to bc renewed. The resolution was lost by a vote of twenty-three to twenty. The introduction of that resolution and the narrow majority by which it failed of passage, sounded a note of warning to the bank, and it gathered all its energies for the struggle that sooner or later was bound to come.
To arouse public sentiment in its behalf, it initiated a policy of expanding its loans until they reached the vast total of seventy-one million dollars, which were so judiciously placed among leading merchants and manufacturers, that, in the event of their being called in by the bank, a powerful pressure would bc exerted upon the President and Congress by those who were borrowers of the bank.
On the 4th of July, 1832, a bill to re-charter the bank, after its passage by Congress, was sent to President Jackson for approval.
Many of the influential political friends of the President, aware of his intense hostility toward the bank and its methods, importuned him to sign the bill; large delegations of leading citizens from every trade center in the country implored him to allow the measure to become a law. Merchants and importers, who were heavy borrowers from the bank, trooped to Washington to add their appeals to the petitions already presented.
Its paid hirelings, in the halls of congress and elsewhere, predicted dreadful results to business interests, should the President not recede from his opposition to the bill continuing the existence of the bank for the period of twenty years longer.
To add to the general clamor, the bank, through its officials, avowed its purpose to precipitate a panic, and to pull down in ruins the business of the country, should its demands not be concealed. It compelled its thousands of borrowers to sign distress petitions, which it caused to be sent to the President as the apparently free expression of public sentiment.
The magazine had long been prepared by the bank, the train was laid, and Nicholas Biddle, the president of this great financial institution, sat in his luxurious office, and declared himself ready and willing to apply the match that would start the most ruinous financial explosion that had yet shook the foundations of the republic. Mr. Biddle had most able lieutenants in both branches of congress devoted to his interest.
Daniel Webster, the eloquent orator and great lawyer; Henry Clay, whose persuasive powers were unrivaled; and Calhoun, the great leader of the South, led the banking interest in congress.
In a work entitled, "Andrew Jackson and the Bank of the United States," William L. Royall thus speaks of the conduct of these three leaders: -
"In addition to all its other sources of power the cause of the bank received invaluable assistance from the coalition of these great men (Webster, Clay, and Calhoun). Each was an aspirant for the presidency, and upon the bank's cause and paper money, each found a common ground upon which all three could meet and oppose Jack on, the great enemy of both these things. All the movements of the bank were but a repetition, with a change of names and dates, of what had taken place on 18ll."
On the other hand, the stalwart Benton was a stern opponent of the bank, and he was supported by an able array of statesmen of the first rank.
Webster, and Clay advocated a liberal construction of the Constitution, and were eternally sounding the praises of that instrument as the noblest work of statesmanship, yet, while ascribing to it the most ample powers and authority, they strangely supported the theory that the United States Bank was absolutely necessary to the financial administration of the Federal Government.
Benton was a strict constructionist, and asserted that the general Government was inherently qualified to transact its financial operations without the aid or assistance of any bank or system of banks. He ably maintained the Jeffersonian principles of Government that bank paper should be suppressed.
In a speech delivered in the United States Senate, Benton thus truly describes the immense power of the bank over the Government and the people: -
"The Government itself ceases to be independent, it ceases to be safe when the national currency is at the will of a company. The Government can undertake no great enterprise, neither war nor pence, without the consent and co-operation of that company; it cannot count its revenues six months ahead without referring to the action of that company - its friendship or its enmity, its concurrence or opposition - to sec how far that company will permit money to be scarce or to bc plentiful; how .far it will let the money system go on regularly or throw it into disorder; how far it will suit the interest or policy of that company to create a tempest or suffer a calm in the money ocean. The people are not safe when such a company has such a power. The temptation is too great, the opportunity too easy, to put up and put down prices, to make and break fortunes; to bring the whole community upon its knees to the Neptunes who preside over the flux and reflux of paper. All property is at their mercy, the price of real estate, of every growing crop, of every staple article in the market, is at their command. Stocks are their playthings - their gambling theater, on which they gamble daily with as little secrecy and as little morality and far morc mischief to fortunes than common gamblers carry on their operations."
This unanswerable argument, built on impregnable facts, could not be met by all the eloquence and logic that could be mustered against it by the great Triumvirate - Clay, Webstcr and Calhoun.
In a message to Congress, President Jackson, in speaking of the banking power, said: -
"In this point of the case the question is distinctly presented, whether the people of the United States are to govern through representatives chosen by their unbiased suffrages, or whether the power and money of a great corporation are to be secretly exerted to influence their judgment and control their decisions."
These pointed shafts from the executive struck home, and rankled in the breasts of those Senators and Representatives who supported the bank and its policy.
When the bank ascertained beyond any doubt that President Jackson was firmly opposed to its further continuance, it began calling in its loans rapidly, the volume of currency was contracted greatly by the bank and its branches, merchants were mercilessly driven to the wall, mills and factories closed down everywhere, and tens of thousands of skilled workmen were thrown out of employment, and their families felt the pangs of hunger, notwithstanding there was abundance in the country.
Every day it tightened its coils around its helpless victims, while President Biddle sat in his office at the bank, and laughed at the needless ruin he wrought among his fellowmen. His course is only paralleled by that of Nero, who is said to have fiddled while Rome was burning.
The great journals of the leading cities, subsidized by loans - presumably - teemed with editorials denouncing President Jackson anti defending the course of the bank.
Distress meetings at the same time and at the same points were held, fiery speeches were made, and strongly worried resolutions were adopted, requesting the President to append his signature to the bill renewing the charter of the bank.
There was a singular identity in the editorials written, in the speeches delivered, and in the resolutions adopted, that gave evidence of a concerted action. This similarity of sentiments and language in the journals, speeches, and resolutions, evinced a most remarkable talent, for combining the various means of influencing President Jackson.
But the hero of New Orleans was as immovable as the Rock of Gibralter.
Andrew Jackson was in many respects the most remarkable man in American history. A sincere patriot of the purest integrity, with a clearness of mental vision that was unsurpassed, with a profound insight into the principles upon which our Government rested, he plainly saw that the interests of the bank were wholly at variance with that of American liberty.
He well knew that to transfer to a private corporation for its gain, the issuance and control of the currency of the country, and to accumulate in its vaults the national revenues, would eventuate in building up a moneyed monopoly, ultimately controlling the press, the business interests, and the legislation of the nation.
That point was now reached.
He was utterly opposed to the Government abdicating its highest sovereign function,- the issuance and control of the currency,- and delegating it to individuals or to corporations for their gain.
He was conversant with the traitorous conduct of the bank during the war of 1812, and he concurred in the declaration of Jefferson that, "Banks of issue were more dangerous to the liberties of the people than standing armies. "
In speaking of the firmness displayed by President Jackson against the arrogance of the bank, the distinguished historian Bancroft says: -
"When the period for addressing Congress drew near, it was still urged that to attack the bank would forfeit his popularity and secure his future defeat. The President replied, 'It is not for myself that I care.' It was urged that haste was unnecessary, as the bank had still six unexpired years of chartered existence. 'I may die,' he replied, 'before another Congress comes together, and I could not rest quietly in my grave, if I failed to do what I hold so essential to the liberty of my country.' "
Bancroft further says, that, upon one occasion when the bank conflict had reached its greatest height, the President and some of his friends were standing over the rocks of the Rip Raps, looking out upon the ocean, when the subject of chartering the bank was brought forward, whereupon the President remarked, "Providence may change my determination; but man no more can do it than he can remove these Rip Raps, which have resisted the rolling ocean from the beginning of time."
History fails to record a nobler sublimity of purpose than that displayed by President Jackson during the war of the bank upon the people.
Notwithstanding the immense prcssure brought to bear upon him, President Jackson, on the 10th day of July, 1832, returned the bill to the Senate, whence it originated, accompanied with his veto message, which was a masterly exposition of his views upon the true principles of free Government, and it ranks in importance with the Declaration of Independence.
The first reason assigned by the President in his objections against the 'renewal of the charter of the bank was, that it created a monopoly under the authority of the general Government, and, therefore, it increased the value of its stock far above its par value, which operated as a gift of many millions to its stock holders.
The President laid down the fundamental principle, that a monopoly should only bc granted when it returned a fair equivalent to the people.
He showed that while its capital stock was fixed at $28,000,000, to confer this privilege upon the bank would add the enormous sum of $17,000,000 to the value of the stock, and for this immensely valuable franchise the Government would receive the pitiful sum of $200,000 per annum.
The President advocated the sale of the stock to the highest bidder, and that the premium received there from by the Government be paid into the national Treasury to lighten the burdens of taxation in lieu of its bestowal upon a few wealthy citizens.
He stated that $8,000,000 of the stock of the present bank was held by foreigners, chiefly in England; that this was the most dangerous feature of the plan; that a majority of the shares of its stock might fall into those alien hands, and that in the event the United 29
States would be involved in war with that nation, thus holding a large amount of the stock of this great bank monopoly, its influence would be thrown against the United States.
The President says: -
"All its operations within would be in aid of the hostile fleets and armies without. Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence, it would be more formidable and dangerous than the naval and military power of the enemy."
He produced figures demonstrating the sectional character of the bank, that out of $35,000,000 of stock, $8,405,500 were held chiefly by Great Britain; only $140,200 were held by the nine great western states; $3,455,598 in the four southern states, and $13,522,000 in the eastern and middle states.
That in 1831, the profits of the bank were $3,455,598 of this amount the western states contributed $1,640,048; the four southern states $352,507, and the middle and eastern states $1,463,041.
It will be ascertained that under the operations of this banking monopoly, the agricultural states of the West were paying heavy tribute to the East.
It was further pointed out by the President, that the principle of taxation involved in the bill was radically Wrong in this: that only the stock could be taxed where held, Therefore, while the nine western states paid $1,640,048 in profits to the bank, only $140,200 of its stock was held there subject to taxation; that, in the year 1831, the branch bank at Mobile earned dividends of $95,140, yet the state of Alabama could not tax the property of the bank, because net a single share of its stock was owned in its jurisdiction.
The foreign stock holders could not be taxed a single penny on their holdings, as they were beyond the taxing power of the United States. The foreign stock holder would be drawing large dividends from the America people without bearing any of the burdens of government. This would tend to alien ownership of this bank, non-contribution to the- burdens of Government creating this valuable privilege, and a continued drainage of specie to foreign nations.
The fourth section of the proposed law provided: -
"That the bills and notes of said corporation, although the same be, on the faces thereof, made payable at one place only, shall, nevertheless, be received by the said corporation at the bank or at any of the offices thereof, if tendered in liquidation or payment of any balance or balances due to said corporation, or to such office of discount and profit from any other incorporated bank."
The right thus conferred upon state banks to pay their debts to the United States Bank, with the notes and bills of any branch bank thereof, would tend to unify the whole banking interest of the nation into a powerful combination, while at -the same time, any individual who held currency issued by a branch of the United States Bank, situated at any other place than his residence, was deprived of that right, therefore, be would be compelled to discount the bills of the branch bank, or transmit them to Philadelphia to obtain the cash for them.
These were a few of the reasons assigned by the President in his famous veto message.
It is now conceded by the most eminent historians of America, that General Jackson, in throttling the corrupt and unscrupulous money power of that day, saved the nation.
On the 8th of January, 1815, General Jackson had met the veterans of Wellington at New Orleans, and inflicted upon them the most disastrous defeat ever suffered by England, and shed undying renown upon American arms. He saved America then, and he preserved its independence in 1832.
By act of Congress, June 28, 1834, a change was made in the coinage laws of April 2, 1834 atter act, the legal ratio of silver to gold was fixed at fifteen to one, that is, fifteen pounds of pure silver were the legal equivalent of one pound of pure gold, and this ratio was maintained until the passage of the act of June 28, 1834.
France and the other Latin States maintained a legal ratio of fifteen and one half to one. Consequently the United States over-valued silver when compared with gold. The bullion dealers, over on the alert for a profit, sent the gold abroad and sold it at a premium. To remedy this, the act of June 28, 1834, reduced the quantity of gold in the gold eagle from 2471/2 grains of pure gold to 232 grains, or a reduction in the ten dollar gold piece from 270 grains of standard gold to 258 grains. A corresponding reduction was made in the half-eagle and quarter-eagle. A fraction over six per cent of gold bullion was therefore deducted from the gold coins. This made the legal ratio of silver to gold stand at sixteen to one. By this act, silver was undervalued and gold made its appearance in circulation, and silver disappeared from the channels of trade.
The object of the passage of this law was to supersede the United States Bank bills by the substitution of gold coin as a circulating medium. The people remembered the great efforts of the bank to monopolize the entire volume of money in the country, and gladly received the two and one half, five and ten dollar gold pieces in preference to bank notes.
This substitution of gold coin for bank notes greatly diminished the profits of the bank, and it immediately declared war upon that coin. Its subsidized press, its minions and dependents denounced this species of money in terms of ridicule. The subservient tools of the bank, when offered gold coin in the ordinary transactions of business, would shudder and recoil at its appearance, and demand United States bank notes as the superior money.
In the meantime, however, in 1832, a presidential election was held. Henry Clay was put forward as the candidate of the Whigs and of the bank power. Andrew Jackson was the candidate of the Democratic party, and represented the principles of Jefferson. Jackson received two hundred nineteen electoral votes to forty-nine for Clay. The prophecies of those Democrats that Jackson had ruined the party by his contest with the bank were refuted by a decisive vote of the people.
REMOVAL OF THE GOVERNMENT DEPOSITS
The next step taken by the President to curtail the power of the bank for mischief, was the removal of the government deposits amounting to many millions of dollars.
After the bank so signally failed to obtain a renewal of its exclusive banking privileges, it did not alleviate from its policy of inflicting distress and ruin upon the people.
From the 1st day of August, 1833, to the 30th of June, 1834, it continued its contraction of the currency by calling in its loans, giving as its reasons therefor, that the Government was harassing it on every hand. It had ample time in which to arrange its affairs without seriously crippling the business of the country and its excuse was not valid.
Although many millions of public revenues were under its sole charge, constituting a loanable fund for the benefit of the bank, its hireling press teemed with abuse against the administration of President Jackson.
The President, in view of all the facts within his knowledge, entertained the opinion that the bank was insolvent, and an unsafe depository for the public moneys. He had previously communicated his belief to Congress as to the unsafe condition of the bank, but such was its influence in that body, that the House of Representatives, by a practically unanimous vote, declared its confidence in the institution.
In the lawful exercise of his powers, the President ordered the Secretary of the Treasury, through the five government directors, to investigate its financial condition. The directors made a demand upon the bank for an inspection of its books, but they were denied access to them, In the face of the obstacles thrown in their way to ascertain its true condition, the directors made an investigation with astonishing results.
To obtain a ful1, true, and complete statement of the expenditures of the bank for political purposes, the official directors submitted a resolution to the full board of the bank, requesting the cashier to furnish a statement to the board, as early as possible, showing what amount was paid out for certain purposes, the sums of money paid to each person, the quantity and names of documents furnished by him, and his charges for the distribution of them. Similar statements were requested from the various branch offices of the bank. The resolution was voted down by the board of directors, and a substitute was adopted expressing inexplicit confidence in the course of its president - Nicolas Bible.
Subsequent events gave satisfactory explanation why the officials of the bank pursued That course in refusing an inspection of the books. Upon a report of the government directors setting forth these facts, the President assumed the responsibility of removing the public moneys from the bank, and distributed them among the various state banks.
In this course he met decided opposition to this order in his cabinet. The Secretary of the Treasury, William J. Duane, peremptorily refused to obey the command of his chief, and for this act of insubordination he was summarily removed from his office.
Attorney General Taney was appointed to fill the vacancy occasioned by Duane's removal, and the order was executed to the letter.
The bold stand taken by the President in the removal of the deposits, stirred up the wrath of the bank party in Congress, and Henry Clay offered a resolution in the United States Senate as follows: -
"Resolved, That the President in the late executive proceeding in relation to the public revenue, has assumed upon himself authority and power not conferred by the constitution and laws, but in derogation of both."
This resolution censuring President Jackson was adopted by the Senate on the 28th of March, 1834.
The bank pointed to this action of the senate as proof of its great power.
On the 15th day of April, 1834, President Jackson transmitted a message to the Senate, respectfully protesting against this implied impeachment of his official acts. His communication to that body was a magnificent exposition of constitutional law, and he severely arraigned the senate for passing judgment upon him without granting him an opportunity to be heard in his defense.
Three years afterward the resolution of Clay was expunged from the journals of the senate.
The President was fated to emerge triumphant from every contest with the banking power.
The bank still continued its warfare upon the people. It avowed its purpose to precipitate a
wide spread panic. It announced its intention to crush the business of the nation, unless the order of removal was recalled, and the deposits restored. The pressure brought to bear by the bank was directed at the chief commercial and industrial centers. The havoc wrought by-it was as broad, as the range of its operations, and its course was sustained by politicians as one of self defense.
Public men who were deeply indebted to it openly upheld its conduct. One of these purchasable demagogues owed the bank the great sum of $100,000, and his defense of his owner was in direct proportion to his obligation to his master - the bank. One loan of $1,100,000 was made by it to a broker in New York City, at which time it was steadily contracting the currency at every point where it was represented by an office. The broker to whom this immense loan was made, accumulated a fortune by speculating with this money upon the misfortunes of others.
Distress meetings were held everywhere under the auspices of the bank, resolutions were adopted, and memorials were presented to the President, requesting him to rescind his order of removal, but without avail.
The presidents, vice-presidents, and various other officers of the so-called distress meetings were selected from those who had supported Jackson for the presidency, which fact was always announced to the people. The petitions, memorials, and remonstrances presented to the President but served to strengthen his determination to crush the bank, and the last fangs of the oppressors were pulled by the removal of these deposits amounting to $40,000,000.
It must be borne in mind, that during the administration of Jackson, a controversy arose between the United States and France with reference to the depredations committed upon our merchant marine by the latter nation during the Directory. A treaty had been concluded by the administration with the kingdom of France on the 4th of July, 1831, by the provisions of which, the latter power agreed to pay the United States the sum of $5,000,000, as indemnity for such depredations.
The French authorities failed to pay the first installment thereof, and the Secretary of the Treasury, under the direction of the President, drew a bill of exchange upon France for the amount. The bill was transmitted to Paris through the United States Bank as the fiscal agent of the Government. The authorities of France refused to honor the bill, and it was protested, whereupon the bank seized upon the Government funds in its
possession to the amount of $170,040 which it claimed as damages for the protestation of the bill. This high handed procedure was clearly illegal on the part of the bank, and violative of the Constitution which provides that no money shall be drawn from the treasury, except through appropriations made by Congress.
To force a suspension of specie payments by state banks of issue, it drew immense bills of exchange on Paris, where it had no money, for the payment of them, then drew vast sums of specie out of the banks of New York City, and transmitted it to Paris to meet the bills so drawn by it.
In speaking of the course of the bank, in attempting to force a suspension of specie payments by the state banks of issue, Mr. Royall says: -
"It was certainly not too good to do so, and in the year 1841, just before it finally expired, it is proved to have attempted to create a general suspension, by forcing the banks of the city of New York to suspend. The manner of this attempt was afterward related by its cashier. It consisted in selling bills in unlimited quantities on Paris - at this time in great demand - where it had not a cent to meet them, and drawing the coin with the proceeds of these sales out of the New York banks and shipping it abroad to meet these bills as they made their appearance there. The bills, however, got to Paris before the coin, came back protested, and the great bubble was finally pricked."
This act was committed by the bank to embarrass the government, to emphasize the panic than beginning to rage, and to bankrupt the business interests of the nation.
In short, no trick, device, or artifice was too villainous or traitorous for the bank to injure the credit of the Government and the happiness of the people.
The bank again failed to obtain a charter in 1841.
The rottenness of the bank then became known, and a complete investigation into its management from 1830 to 1836, instituted by the stockholders, developed an astonishing degree of villainy, corruption, and rascality that was appalling, and the results of which more than sustained the charges brought against it by President Jackson and his supporters.
It was discovered that hundreds of thousands of dollars were expended by President Biddle in influencing elections, subsidizing the press, and bribing members of Congress.
The stockholders, on the completion of this investigation, instituted a suit against President Biddle in the United States circuit court at Philadelphia, for the sum of $1,018,000 expended by him for which no vouchers could be found.
It was further demonstrated that, from 1830 to 1836, during the struggle of the bank for a new lease of corporate life, loans, aggregating more than $30,000,000, were. made by its president to members of Congress, editors of newspapers, politicians of all grades, jobbers and brokers, mostly without security.
Perhaps all the facts connected with its management were never made known, on the ground of public policy, as the reputations of many eminent men, not excepting presidential candidates, would have been utterly ruined.
In speaking of the contest between the bank and President Jackson, Parton, the biographer, says: -
"In these Jacksonian contests, therefore, we find nearly all the talent, near1y all the learning, nearly all the ancient wealth, nearly all the business activity,
nearly all the book-nourished intelligence, nearly all the silver-forked civilization of the country, united in opposition to General Jackson, who represented the country's untutored instincts."
Parton further says that Jackson was called a murderer, a traitor, an ignoramus, a fool, a crook-back, a pretender, and various other vile names.
Nicolas Biddle, who, to a very large extent, was responsible for the gigantic conspiracies, bank-panic with their resultant ruin and misery, was driven in disgrace from his exalted position, and he died a shameful death almost unknown, unhonored, and unsung.
The man before whom bowed in fawning adulation great and wise statesmen, merchant princes, editors of powerful journals, and leaders of public opinion; he, who, in the magnitude of his financial plans and undertakings, rivaled the money kings of Europe; he, who arrayed dollars against the immutable principles of justice and the rights of man, lived to see his name become a by-word, a hissing, and a reproach.
The career of the United States Rank and its president is an awful monument of warning on the highway of time to come, an object lesson to that colossal greed of power, which, to tighten its grip upon the people, scatters distress and ruin in its train, and which, from its ramparts of ill-gotten wealth obtained by monopoly and special privileges, defies the laws of man and the laws of God.
On the other hand, the fame of Jackson shines more and more with the lapse of time.
Thomas Jefferson, the founder of American Democracy, and the friend of the human race, is honored as
the great constructive statesman of America; Andrew Jackson is revered as that great leader who regenerated the politics of his country, and rescued a people from financial slavery. During his administration, the public debt was wholly paid, a large surplus of public revenues accumulated to the credit of the United States, the money power was dethroned, the American nation was honored everywhere, 'and he retired from the presidency amid the plaudits of his countrymen.
In his farewell address to the people, March 3, 1837, he solemnly warned them against the money power, that special privileges must not be granted to any class of citizens, and that justice must be the basis of public and private conduct.
In this noble document, the President admonishes the people to be on their guard against the money power. He says: -
"But when the charter for the bank of the United States was obtained from Congress, it perfected the paper system, and gave to its advocates the position they have struggled to obtain from the commencement of the Federal Government down to the present hour. The immense capital and peculiar privileges bestowed upon it, enabled it to exercise despotic sway over the other banks in every part of the country. From its superior strength it could seriously injure, if not destroy, the business of any one of them that would incur its resentment; and it openly claimed for itself the power of regulating the currency throughout the United States. In other words, it asserted (and undoubtedly possessed) the power to make money plenty or scarce, at its pleasure, at any time, and in any quarter of the Union, by controlling the issues of other banks, and in permitting an expansion, or compelling a general contraction of the circulating medium according to its own will.
"The other banking institutions were sensible of its strength, and they soon became generally its obedient instruments, ready at all times to execute its man-dates; and with the other banks necessarily went also that numerous class of persons in our commercial cities who depend altogether on bank credits for their solvency and means of business, and who are therefore ' obliged, for their safety, to propitiate the favor of the money power by distinguished zeal and devotion in its service, The result of the ill-advised legislation which established this great monopoly, was to concentrate the whole moneyed power of the Union, with its boundless means of corruption, and its numerous dependents, under the direction and command of one acknowledged head; thus organizing this particular interest as one body, and securing to it unity of action throughout the United States, and enabling it to bring forward, upon any occasion, its entire and undivided strength to support or defeat any measure of the government. In the hands of this formidable power, thus perfectly organized, was also placed unlimited dominion over the amount of circulating medium, giving it the power to regulate the value of property, and the fruits of labor in every quarter of the Union; and to bestow prosperity, or bring ruin upon any city or section of the country as might best comport with its own interests or policy.
"We are not left to conjecture how the moneyed power, thus organized, and with such a weapon in its hands, would be likely to use it. The distress and alarm which pervaded and agitated the whole country, when the Rank of the United States waged war upon the people in order to compel them to submit to their demands, cannot yet be forgotten. The ruthless and unsparing temper with which whole cities and communities were oppressed, individuals impoverished and ruined, a scene of cheerful prosperity suddenly changed into one of gloom and despondency, ought to
be indelibly impressed on the memory of the people of the United States. If such was its power in a time of peace, what would it not have been in a season of war, with an enemy at your doors. No nation but the freeman of the United States could have come out victorious from such contest; yet, if you had not conquered, the Government would have passed from the hands of the many to the hands of the few; and this organized money power, from its secret conclave, would have dictated the choice of your highest officers, and compelled you to make peace or war, as best suited their own wishes. The form of your Government might for a time have remained, but its living spirit would have departed from it."
The wise counsel coached in these golden words of President Jackson are now morc applicable than when uttered by him.
In the election of 1836, Martin Van Buren succeeded Jackson in the presidency. The panic engineered by the bank enveloped the people, and the whole system of credit built up by it fell with a crash. In fact the bank had so shrewdly manipulated the volume of money, and so absolute was its control over it, that society had resolved itself into two classes, a creditor class, small in numbers, but powerful in influence; a debtor class, constituting a great majority of the people, but helpless in the grasp of the creditor class.
One was the master, the other the servant.
During the administration of Van Buren, the Independent Treasury Bill became a law.
Thus the work begun by Jackson in-crushing the bank, was consummated by the separation of the public moneys from those of the banks - a most salutary reform.