H. OF R.]

National Bank.

[MARCH, 1816.

WEDNESDAY, March 13.

National Bank.

noticed, if noticed at all, on the discussions in | ital of the United States. In the event of any Congress, in 1811, would seem to urge that convulsion, in which the distribution of banking body to exert all its powers to restore to a institutions might be important, it may be sound state the money of the country. That urged that the mischief would not be alleviated instrument confers upon Congress the power to by the creation of a National Bank, since its coin money, and to regulate the value of foreign location must be within one of the States. But, coin; and the States are prohibited to coin in this respect, the location of the bank is exmoney, to emit bills of credit, or to make any tremely favorable, being in one of the middle thing but gold and silver coin a tender in pay- States, not likely, from its position, as well as ment of debts. The plain inference is, that the its loyalty, to concur in any scheme for subvertsubject of the general currency was intended to ing the Government; and a sufficient security be submitted exclusively to the General Gov-against such contingency, is to be found in the ernment. In point of fact, however, the regu- distribution of branches in different States, actlation of the general currency is in the hands of ing and reacting upon the parent institution, the State governments, or, which is the same and upon each other. thing, of the banks created by them. Their paper has every quality of money, except that of being made a tender, and even this is imparted to it by some States, in the law by which a creditor must receive it, or submit to a ruinous suspension of the payment of his debt. It was incumbent upon Congress to recover the control which it had lost over the general currency; the remedy called for was one of caution and moderation, but of firmness. Whether a remedy directly acting upon the banks, and their paper thrown into circulation, was in the power of the General Government or not, neither Congress nor the community were prepared for the application of such a remedy; an indirect remedy, of a milder character, seemed to be furnished by a National Bank. Going into operation with the powerful aid of the Treasury of the United States, he believed it would be highly instrumental in the renewal of specie payments. Coupled with the other measure adopted by Congress for that object, he believed the remedy effectual. The local banks must follow the example which the National Bank would set them, of redeeming their notes by the payment of specie, or their notes will be discredited and put down.

The House took up the National Bank bill. Mr. ATHERTON's motion to make the rate of subscribing the three per cent, stock "fifty" instead of "sixty-five" per cent. being still under consideration, this motion was negatived; and Mr. A. subsequently moved to receive the three per cent. at "sixty" instead of "sixty-five” per cent., which was also negatived-88 to 55. amend the bill, among which was the motion After rejecting various other propositions to of Mr. WEBSTER to increase the value of the shares to four hundred dollars, and diminish the number to 87,500, the question was taken on ordering the bill to be engrossed, and read a third time, and decided in the affirmative-yeas 82, nays 61, as follows:

YEAS.-Messrs. Adgate, Alexander, Atherton, Baer, Bateman, Betts, Boss, Bradbury, Brown, Calhoun, Cannon, Champion, Chappell, Cilley, Clarke of North Carolina, Clark of Kentucky, Clendennin, Comstock, Condict, Conner, Creighton, Crocheron, Cuthbert, Edwards, Forney, Forsyth, Gholson, Grosvenor, Hawes, Henderson, Huger, Hulbert, Hungerford, If the constitution, then, warranted the estab- of Virginia, King of North Carolina, Langdon, Love, Ingham, Irving of New York, Jackson, Jewett, Kerr lishment of a bank, other considerations besides Lowndes, Lumpkin, Maclay, Mason, McCoy, McKee, those already mentioned, strongly urged it. The Middleton, Moore, Mosely, Murfree, Nelson of want of a general medium is everywhere felt; Massachusetts, Noyes, Pickens, Pinkney, Piper, Rob exchange varies continually, not only between ertson, Sharpe, Smith of Maryland, Smith of Vir different parts of the Union, but between differ-ginia, Southard, Sturges, Taul, Taylor of New York, ent parts of the same city. If the paper of a National Bank were not redeemed in specie, it would be much better than the current paper; since, although its value, in comparison with specie, might fluctuate, it would afford a uniform standard.

If political power be incidental to banking operations, there ought, perhaps, to be in the General Government some counterpoise to that which is exerted by the States. Such a counterpoise might not, indeed, be so necessary, if the States exercised the power to incorporate banks equally, or in proportion to their respective populations. But that is not the case. A single State has a banking capital equivalent, or nearly so, to one-fifth of the whole banking capital of the United States. Four States combined, have the major part of the banking cap

Taylor of South Carolina, Telfair, Thomas, Troup,
Townsend, Tucker, Ward of New Jersey, Wendover,
Wheaton, Wilde, Wilkins, Williams, Willoughby,
William Wilson, Woodward, Wright, Yancey, and

Yates.

NAYS.-Messrs. Baker, Barbour, Bassett, Blount, Clopton, Cooper, Crawford, Culpeper, Darlington, Breckenridge, Burnside, Cady, Caldwell, Clayton, Davenport, Desha, Gaston, Gold, Goldsborough, Goodwyn, Hahn, Hale, Hall, Hanson Hardin, Herbert, Hopkinson, Johnson of Virginia, Kent, Law, Lewis, Lovett, Lyle, Lyon, Marsh, Maryant, McLean of Kentucky, McLean of Ohio, Milnor, Newton, Ormsby, Pickering, Pitkin, Randolph, Reed, Root, Ross, Ruggles, Sergeant, Savage, Smith of Pennsylvania, Stanford, Stearns, Strong, Tallmadge, Vose, Wallace, Ward of Massachusetts, Webster, Whiteside, and

Wilcox.

The Speaker laid before the House two Mes

National Bank.

sages from the President of the United States, | five of the directors. Of the first, he said, that one enclosing the documents respecting the pub-it was unprecedented; such a capital had never lic accounts of Colonel James Thomas, called for by the House; and the other a report respecting the Cumberland road; which being severally referred, the House adjourned.

Mr. HUGER from the joint committee, appointed on the 16th ultimo, respecting the remains of the late General GEORGE WASHINGTON, made a report containing joint resolutions providing for the erection of a monument to commemo-cessary connection with the great object of the rate the virtues of GEORGE WASHINGTON; which were read, and referred to a Committee of the whole House on Saturday next. The report is as follows:

said, that more of active capital than seven
millions could not be brought into use, the rest
would be inoperative and harmless. For his
own part, Mr. G. should not be afraid of a capital
of a hundred millions; for he should deprecate
as much as Mr. WEBSTER a real Government
bank, because it would not answer the object
for which this was intended-for which purpose
it must be entirely independent; and he endeav-
ored to prove, by the state of the New York
banks, that the Government having a share
in the direction was perfectly innocuous.

Mr. HULBERT spoke in favor of the bill.
Mr. CADY spoke as follows:

[MARCH, 1816.

Yet such is the provision in effect; because this bank can only be sued in the State of Pennsylvania, where the plaintiff must pay all, or nearly all, his own costs. Had the bank been placed in New York, where defendants are obliged to pay the costs of compelling them to do justice, the amount of such costs, and the twelve per cent. interest, would have some influence in inducing the bank to pay its debts. But being placed in Philadelphia, the bank will feel protected against its creditors; it will know that no one of its creditors, for any ordinary sum, can prosecute without submitting to a loss. Sir, the bills of this bank are to be circulated in every part of the United States, and no person who resides out of the State of Pennsylvania would think of prosecuting the bank, while he could dispose of its bills for any reasonable discount. We have then no security that the National Bank, if incorporated, will pay its notes, but the probability is, that it will at once adopt the practice of the State banks, and thus render the evils of which we complain almost incurable.

lieved, had diffused itself extensively among members of this House-that is, that acts of Congress, and the execution of them, determined and settled the constitutional question as to the right of future legislation upon the objects of those acts, so that when the subjectmatter of any former act, which had been regularly executed, should be proposed to this Legislature as the object of a new act, the ques tion whether it be constitutional or not, was precluded from any further examination, and the Legislature bound to consider the act as authorized by the constitution. This doctrine he abhorred, and took this occasion to enter his most solemn protest against it.

Mr. Speaker: It has been said, that the greatest evil with which our country is now afflicted, arises from the conduct of the State banks in refusing to pay their debts; and that the hope of gain will deter them from ever esuming a correct course of conduct, unless the Government shall compel them to redeem their bills in specie. And, sir, the friends of the bill upon your table insist that it will furnish a remedy for the evil which threatens ruin to our country; that it is absolutely necessary that that bill Mr. CLOPTON said that he did not intend to should become a law, in order to enable the detain the House; it was utterly out of his Government to coerce the State banks to alter power to do so, if he were ever so willing; the their conduct. But, sir, what security have we situation of his health would not admit of it: that this great National Bank, with a capital of but that he rose merely to enter his protest, in thirty-five millions of dollars, will, if incorpo- as solemn a manner as he was able, against the rated, be an engine in the hands of the Govern-doctrine advanced by the gentleman from Maryment, by which the State banks can be chastis-land (Mr. WRIGHT)-a doctrine which, he be ed for their past transgressions, and hereafter be constrained to pursue a different course? What security have we that the National Bank will not pursue the same conduct of which we complain in the State banks? It has been truly said, that they are governed by motives of interest, and will never voluntarily redeem their bills. Will not the National Bank be governed by the same motives; will it not pursue that course which promises the greatest profit? Can you hope, sir, that the magnitude of its capital will make it honest? It would be as reasonable to calculate that the ferocity of a lion would be decreased as his size was increased. What, sir, are the provisions incorporated in that bill, by which the instinct of the National Bank is to be controlled, and the bank compelled to pay its notes? There is but one single provision calculated to have that effect, but what may be found in the charter of every bank in the Union; and that provision, considering the city in which the bank is to be placed, furnishes no security that the National Bank will be more punctual in paying its debts than the State banks. The provision to which I allude is this, that the bank is made liable to pay an interest of twelve per cent. per annum on such of its bills as shall be presented for payment, and payment be refused. What, sir, would be thought of this provision, had it also provided that any person who should prosecute the bank should pay his own costs, which will amount to more than the interest of twelve per cent.? Sir, the provision would be considered useless, it would be deemed a mockery.

Sir, said Mr. C., I have been long a member of the House of Representatives. I was a mem ber of it at the gloomiest period of Federal times, and have been during the whole course of the Republican Administration since; and I must say, that of all the pernicious doctrines I have ever heard advanced, this, in my view, is one of the most pernicious.

Are gentlemen, said he, whose fancies are tickled with this new idea, apprised of what may be the consequence of deciding and settling constitutional questions by this standard? Do they not see that a few acts of Congress, affecting the great essential principles of personal liberty and personal property, might destroy every thing valuable in the constitution? We have, said he, already witnessed evil times, and evil times may again occur (I wish they may not be fast approaching), when such acts may

MARCH, 1816.]

National Bank.

[H. OF R.

be passed. According to this doctrine, the | York, Jackson, Jewett, Kerr of Va., King of N C., freedom of the press is already gone, for, by Love, Lowndes, Lumpkin, Maclay, Mason, McCoy, this doctrine, you declare that you have a right McKee, Middleton, Moore, Mosely, Murfree, Nelson to revive the Sedition act whenever you please. of Massachusetts, Parris, Pickens, Pinkney, Piper, That act had all the public recognitions spoken Robertson, Sharpe, Smith of Maryland, Smith of of as sanctioning and confirming the validity of Virginia, Southard, Taul, Taylor of New York, Taythe bank act. It was enacted in due form of lor of South Carolina, Telfair, Thomas, Throop, legislation, carried fully into execution, as a Townsend, Tucker, Ward of New Jersey, Wendover, valid law of the land, by judges and by juries, Thomas Wilson, William Wilson, Woodward, Wright, Wheaton, Wilde, Wilkin, Williams, Willoughby, on many grievous and oppressive prosecutions; Yancey, and Yates. some of its victims heavily fined, and subjected to long and severe imprisonment; while the whole community submitted to the progress of its operation; and, though a large proportion of the people in some sections of the Union denounced it with expressions of abhorrence, at the same time as large a proportion, perhaps, in some other sections, made no objection to it. Thus it continued in force and operation until the expiration of the term for which it was enacted.

I have said, sir, observed Mr. C., and I feel myself justified in making the declaration, that, according to this doctrine, the freedom of the press is already gone; for, if this doctrine be correct, the constitutional authority of Congress to revive the Sedition act, or pass a similar one, is established, and the free use of the press is every moment at the mercy of the Legislature. The right no longer exists, if the use can be taken away or restrained, ad libitum, by an act of the Legislature, and if that act is authorized by the constitution. But, sir, continued he, the doctrine is not correct-it is grossly incorrect it is a horrible political heresy. It is equally incorrect, equally heretical, applied to this bill. The consequence of the establishment of such a doctrine as this, said Mr. C., would be that the constitution itself, the supreme rule, by which all Legislatures acting under it should be governed, and which they are sworn to support, in making their laws, would, in a process of time, be superseded and rendered altogether a dead letter by a series of the acts of those Legislatures; nor would it require that the series be a very long one. What a monstrous doctrine! he exclaimed. He felt himself totally unable to denounce it in terms any way adequate to its enormity. He lamented this inability, this want of physical power to expose it in such a manner as, he believed, it ought to be exposed.

Messrs. STANFORD, HANSON, and PICKERING, also spoke against the bill, and Mr. CALHOUN concluded the debate by a few remarks in favor

of it.

NAYS.-Messrs. Baker, Barbour, Bassett, Bennett, Birdsall, Blount, Breckenridge, Burnside, Burwell, Cady, Caldwell, Cilley, Clayton, Clopton, Cooper, Crawford, Culpeper, Darlington, Davenport, Desha, Gaston, Gold, Goldsborough, Goodwyn, Hahn, Hale, Hall, Hanson, Hardin, Herbert, Hopkinson, Johnson of Virginia, Kent, Langdon, Law, Lewis, Lovett, Lyle, Lyon, Marsh, Mayrant, McLean of Kentucky, McLean of Ohio, Milnor, Newton, Noyes, Ormsby, Pickering, Pitkin, Randolph, Reed, Root, Ross, Ruggles, Sergeant, Savage, Sheffey, Smith of Pennsylvania, Stanford, Stearns, Strong, Sturges, Taggart, Tallmadge, Vose, Wallace, Ward of Massachusetts, Ward of New York, Webster, Whiteside, and

Wilcox.*

The events of the war-the difficulty about currency,

loans and taxes-gave us the second Bank of the United States, and changed the relative position of the two political parties towards such an institution. The first bank, both in its inception and termination, was essentially a party measure-supported by the Federal members, opposed by the Republicans; and the argument mainly turning on its unconstitutionality, and its tendency to become a political mato carry into effect the granted powers. Tho financial dis

chine. The great argument for it was, as a necessary means

tress of the Government during the war of 1812, seemed to

favor the idea of that necessity, and changed the attitude of the Republican party, as a party, towards it-though with many exceptions. They created the second bank; and, after twenty years' experience, the same party refused to continue it; and left the country without a National Bank. Twenty years have elapsed since that time, and another period of twenty years' experience has come to decide upon the validity of the reasons on which its constitutionality and utility were made to depend; and this experience has invalidated the former. It has proved that a National Bank is not necessary to carry into effect any granted power, either in war or peace: and so the constitutional, as well as the expedient argument falls to the ground. The revival of the gold currency, and the creation of an Independent Treasury, has superseded the cails for banks-for Federal use -either State or National; and leaves nothing but the paper currency to be regulated, so as to suppress small notes, to give all the States a perfect currency. That suppression can be effected by a stamp duty, imposed as a fair measure of revenue. Banks have now become so numerous, and issue such myriads of notes, and make so much

The question was loudly called for during the latter part of the sitting; and, being taken at a late hour, the vote on the passage of the bill money out of the people, that they present themselves as a was-yeas 80, nays 71, as follows:

YEAS.-Messrs. Adgate, Alexander, Atherton, Baer, Betts, Boss, Bradbury, Brown, Calhoun, Cannon, Champion, Chappell, Clarke of N. C., Clark of Ky., Clendennin, Comstock, Condict, Conner, Creighton, Crocheron, Cuthbert, Edwards, Forney, Forsyth, Gholson, Griffin, Grosvenor, Hawes, Henderson, Huger, Hulbert, Hungerford, Ingham, Irving of New

fit subject of permanent taxation. A moderate and uniform stamp tax on each bank note-on each piece of paper issued for currency-would have the effect. The larger notes would not feel it, the smaller could not bear it: and it would be at the option of the issuer to take his choice of the denominations he would use. A fair, uniform stamp duty would not be a penalty, but a tax, yielding, in the present universality of bank notes, a good revenue, and taxing the power which above all ought to pay-the moneyed power,

།

FRIDAY, March 22. The Tariff-Cotton Goods. The House then again resolved itself into a Committee of the Whole, on the bill to regulate the tariff of duties Mr. CLAY's motion to increase the duty on imported cotton cloths to thirty per cent., being still under considera

tion.

[MARCH, 1816.

other way; they consume vast quantities of the products of the country, and create a demand for raw materials which are imported from those who have no practical acquaintance with abroad, to an extent not easily believed by the facts; they supply substantial and valuable fabrics for the convenience and comfort of the people, which they can pay for with their sur Mr. INGHAM said he had risen yesterday for plus products, and contribute to the completion the purpose of replying to some observations of by their own labor. The revenue question that were made by the gentleman from Louisi-must, therefore, be considered as a minor conana, (Mr. ROBERTSON,) and also the Chairman of the Committee of Ways and Means, (Mr. LOWNDES,) he had not intended then to occupy much of the time of the committee, and he should not abuse the indulgence he had received by doing it now.

As respects the revenue question, Mr. I. said, he had not expected to have seen the discussion assume this direction, because the great principle involved in this bill was not a revenue proposition. Congress had already provided by

law for all the revenues demanded by the exigencies of the Government, and the only relation this bill could have to the revenue was, the general limit of the aggregate of the duties to be imposed. Its great primary object was to make such a modification of duties upon the various articles of importation, as would give the necessary and proper protection and support to the agriculture, manufactures, and commerce of the country. The revenue is only an incidental consideration, and it ought not to have any influence in the decision upon the proposition before the committee. With a view then, to these great objects, is it not most obviously the policy of the Government to insure to its agriculture the advantage of a home market that cannot be affected by the caprice and vexatious impositions of foreign nations? The principal raw materials used in our manufactories have become great staples of the country, the value of which would be greatly increased by a demand for them at home, as well as many other articles that cannot now find a market anywhere else. Mr. I. said he did not intend to pursue the argument on this part of the subject; it was only necessary to mention it, the intelligence of the House would supply the omission. But the manufacturing interests are vitally concerned in the fate of this bill and its details. It is believed that not less than $100,000,000 have been invested in manufactures, in the course of the last eight or ten years, and these furnish, in times of prosperity, profitable employment to many thousands of persons who could procure subsistence in no

sideration, even if it had been shown (which it
has not) that the proposed duty would yield

either too much or too little revenue.

defence of the report of the committee, and the
Mr. LOWNDES again entered into a particular
degree of encouragement which the bill proposed
giving to our manufacturing establishments, and
replied, in detail, to the arguments of Messrs.
INGHAM and CLAY.

and in reply to the gentlemen who had spoken
Mr. CLAY followed in support of his motion,
in opposition to it.

Messrs. GOLD and HULBERT also successively
advocated the amendment, and the expediency
of extending an indubitable encouragement and
security to our manufacturing citizens.

The question was then taken on Mr. CLAY'S motion to increase the duty on cottons to thirty per cent. and carried-ayes 68, noes 61.

SATURDAY, March 23.
Allowance of Interest.

The SPEAKER laid before the House a report from the Secretary of War, in obedience to the resolution of the 21st instant, respecting the allowance of interest on charges against the War Department; which was read, and ordered to

lie on the table.

The letter is as follows:

DEPARTMENT OF WAR, March 23, 1816. SIR: In obedience to the resolution of the House of Representatives of the 21st instant, I have the honor to state that the general usage of the War Depart ment has been to pay no interest upon any demand whatever, without regard to its origin.

During the latter part of the year 1814, and through the whole of 1815, the Department, being mands which were made upon it, in some instances unable to discharge the multiplied and extensive deauthorized different officers employed in disbursing the public money, and various contractors, to obtain money upon a loan; and, in some instances where their bills were presented and remained unpaid for the want of funds, assurances were given to the banks that interest would be paid upon them if they were taken up by them. In all such cases, interest has been paid. Interest has also been allowed upon hills drawn by contractors pursuant to their contracts, and which makes money by injuring the community, and which have been protested for the want of funds. especially the laboring classes, by a pestiferous issue of small This is the only case in which it has been allowed, paper. A stamp duty of twenty-five cents on each piece of except upon special agreement to that effect. No currency paper, would probably suppress the paper circu- distinction has been made between bills drawn for lation below the denomination of our largest gold coin-money actually received by a public agent, and for twenty dollars; and give us the full use of all our gold and debts contracted by such agent in the course of his official duty.

silver coins.