REPORT OF COMMITTEE, 1830.
This committee consisted of Mr. McDuffie, Mr. Verplanck, Mr. Dwight, Mr. Smyth, Mr. Ingersoll, Mr. Gil more, and Mr. Overtoil.
On the 13th of April, succeeding, the following report was made:
Mr. MrDuffie, from the Committee of Ways and Means, to which (he subject liad been referred, made the following report:
The Committee of Ways and Means, to whom was referred so much of tlie Message of the President as relates to the Bank of the United States, beg leave to report:
That they have bestowed upon the subject all the attention demanded by its intrinsic importance, and now respectfully submit tlie result of their deliberations to the consideration of the House. There are few subjects, having reference to the policy of an established Government, so vitally c »nnected with the health of the body politic, or in which the pecuniary interests of society are so extensively and deeply involved. No one of the attributes of sovereignty carries with it a more solemn responsibility, or calls in requisition a higher degree of wisdom, than the power of regulating tlie common currency, and thus fixing the general standard of value for a great commercial community, composed of confederated States.
Such being, in the opinion of the committee, the high and delicate trust exclusively committed to Congress by the federal constitution, they have proceeded to discharge the duty assigned to them, with a corresponding sense of its magnitude and difficulty.
The most simple and obvious analysis of the subject, as it is presented by the message of the President, exhibits the following questions for the decision of the National Legislature:
I. Has'Congress the constitutional power to incorporate a bank, such as that of the United States ?
2. Is it expedient to establish and maintain such an institution ?
3. Is it expedient to establish " a national bank, founded upon the credit of the Government and its revenues ?"
I. If the concurrence of all the departments of the Government, at different periods of our history, under every administration, and during the ascendency of both the great political parties, into wliich the country was divided, soon after the adoption of the present constitution, shall be regarded as having the authority ascribed to such sanctions by the common consent of all well regulated communities, the constitutional power of Congress to incorporate a bank, may be assumed as a postulate no longer open to controversy. In little more than two years after the Government went into operation, and, at a period when most of the distinguished members of the federal convention were either in the executive or legislative councils, the act, incorporating tlie first bank of the United States, passed both branches of Congress by large majorities, and received the deliberate sanction of President Washington, who liad then recently presided over the deliberations of the convention. The constitutional power of Congress to pass the act of incorporation was thoroughly investigated, both in the Executive cabinet and in Congress, under circumstances, in all respects propitious to a dispassionate decision. There was, at that time, no organization of political parties, and the question was, therefore, decided by those who, from their knowledge and experience, were peculiarly qualified to decide correctly, and who were entirely free from the influ-ence of that party excitement and prejudice which would justly impair, in the estimation of posterity, the authority of a legislative interpretation of the constitutional charter. No persons can be more competent to give a just construction to the constitution, than those who had a principal agency in framing it; and no administration can claim a more perfect exemption from all those influences wliich, sometimes, pervert the judgments, even of the most wise and patriotic, than that of the Father of his Country, during the first term of his service.
Such were the circumstances under which all the branches of the National Legislature solemnly determined that the power of creating a national bank was vested in Congress by the constitution. The bank, thus created, continued its operations for twenty years—the period for which its charter was granted—during which time public and private credit were raised from a prostrate to a very elevated condition, and the finances of the nation were placed upon the most solid foundation.
When the charter expired, in 1811, Congress refused to renew it, principally owing, as the committee believe, to the then existing state of political parties. Soon after the bank was chartered, the two great parties that have since divided the country, began to assume an organized existence. Mr. Jefferson and Mr. Madison, the former in the Executive cabinet, and the latter in Congress, had been opposed to the establishment of the bank, on constitutional grounds, and being placed at the head of the party most unfavorable to the extension of the powers of the Government, by implication the. bank question came to be regarded as, in some degree, the test of political principle.
When Mr. Jefferson came into power, upon the strong tide of a great political revolution, the odium of the alien and sedition laws was, in part, communicated to the Bank of the United States; and, although he gave his official sanction to an act, creating a new branch of that institution, at New Orleans, and to another to punish the counterfeiting of its bills, yet, when the question of renewing the charter came before Congress, it was discussed as a party question. And, though some of the most distinguished republicans, including Mr. Gallatin, then Secretary of the Treasury, and Mr. Crawford, then a member of the Senate, were decidedly in favor of the renewal, sustaining the measure by able arguments, the votes in both branches of Congress were distinctly marked as party votes. At no time, since the commencement of the Government, has there existed a more violent party excitement, than that which marked the period under review. It was the period of the embargo, non-intercourse, and other commercial restrictions; when the undiscriminat-ing opposition of the leaders of the federal party to the measures adopted by the administration, to vindicate our rights against British aggression, had caused the great majority of the American People to view these Leaders as the apologists ot a nation, already regarded in the light of a public enemy. When, to these circumstances, we add, that the stock of the bank was principally held by British subjects, and Americans of the unpopular party, the House will readily perceive how great were the national and party prejudices which inust have been arrayed against the proposition to renew its charter. It was stated by Mr. Clay, in a speech delivered in the Senate, that seven-tenths of the stock belonged to British subjects, and that certain English noblemen, and a late lord chancellor, were among the very largest of the stockholders. With all these difficulties to encounter, the proposition for renewing the charter was lost only by the casting vote of the President of the Senate, and by a majority of a single vote in the House of Representatives.
' f In less than three years after the expiration of the charter—the war with Great Britain having taken place in the mean time—the circulating medium became so disordered, the public finances so deianged, and the public credit so impaired, that the enlightened patriot, Mr. Dallas, who then presided over the Treasury Department, with the sanction of Mr. Madison, and, as it is believed, every member of the cabinet, recommended to Congress the establishment of a national bank, as the only measure by which the public credit could be revived, and the fiscal resources of the Government redeemed from a ruinous, and otherwise incurable embarrassment and, such had been the impressive lesson taught by a very brief, but fatal experience, that the very institution, which had been so recently denounced, and rejected by the republican party, being now recommended by a republican administration, was carried, through both branches of Congress, as a republican measure, by an overwhelming majority of the republican party. It is true that Mr. Madison did not approve and sign tlie bill which passed the two Houses, because it was
not such ii, bill s had been recommended by the Secretary of (lie Treasury, and because the bank it proposed to create was nut calculated, in the opinion of the President, to relieve the necessities of the country. But he premised his objections to the measure, by " waiving the question of the constitutional authority of the Legislature to establish an incorporated bark, as being precluded, in his opinion, by repeated recognitions, under varied circumstances, of the validity of such an institution, in acts of tlie Legislative, Executive, and Judicial brandies of the Government, accompanied by indications, in different modes, of a concurrence of the general will of the nation.'' Another bill was immediately introduced, and would, in all probability, have become a law, had not the news of peace, by doing away the pressure of the emergency, induced Congress to suspend further proceedings on the subject until (the ensuing session. At the commencement of that session, Mr. Madison invited the attention of Congress to the subject, and Mr. Dallas again urged the necessity of establishing a bank, to restore the currency, and facilitate the collection and disbursement of the public revenue; and so deep and solemn was the conviction, upon the minds of tlie public functionaries, that such an institution was the only practicable means of restoring the circulating medium to a state of soundness, that, notwithstanding the decided opposition of all the State banks and their debtors, and, indeed, the. whole debtor class of the community, the act incorporating tlie present Bank of the United States was passed by considerable majorities in both brandies of Congress, and approved by Mr. Madison.
This brief history of the former and present bank forcibly suggests a few practical reflections. It is to be remarked, in the first place, that. since, the. adoptiop of the constitution, a bank has existed, under the authority of the federal government- for thirty" three out of forty years; during which time, public.and private credit have been maintained at an elevation tu I [y equafw* what has existed in any nation in the world: whereas,. In the two short inter-viLls, during which no national bankexisted, "public and private credit were greatly impaired, and, in the latter instance, the_fiscal operations of the Go-vernment were almost entirely arrested. in the second place, it is worthy of special notice, that, in both the insta'nces in which Congress has created a bank, it has been done under circumstances calculated to give the highest autliority to tlie decision. Tlie first instance, as has been already remarked, was in the primitive days of tlie republic, when the patriots of the Revolution, and the sages of the Federal Convention, were the leading members both of the Executive and Legislative councils; and when General Washington, who, at the head of her armies, had conducted his country to independence, and, as the head of the convention, had presided over those deliberations which resulted in the establishment of the present constitution, was the acknowledged President of a People, undistracted by party divisions. The second instance was under circumstances of a very different but equally decisive character. We find the very party, which had so recently defeated the proposition to renew the charter of the old bank, severely schooled both by adversity and experience, magnanimously sacrificing the pride of consistency, and the prejudices of party, at the shrine of patriotism. It may be said, without disparagement, that an assembly of higher talent and purer patriotism has never existed, since.the days of the Revolution, than the Congress by which the present bank was incorporated. If ever a political party existed, of which it might be truly said, that " all the ends they aimed at were their country's," it was the republican party of that day. They had Just conducted tlie country through the perils of a war, waged in defence of her rights and honor, and, elevating their views far above the narrow and miserable ends of party strife, sought only to advance the permanent happiness of the People. It was to this great end, that they established the present bank.
In this review, it will be no less instructive than curious, to notice some of the changes made in the opinions of prominent men, yielding to the authority of experience. Mr. Madison, who was the leading opponent of the bank created in 1791, recommended and sanctioned tlie bank created in 1816; and
Mr. Clay. who strenuously opposed the renewal of the charier in 1811, as strenuously supported the proposition to grant the charter in 1816.
That may be said of the bank charter, which can be said of lew contested questions of constitutional power. Both the great political parties that have so long divided the country, Have solemnty plollUuirecUit to be constitutional. and there are but very few of the prominent men ot either party, who cto not stand committed in its favor. When, to this imposing array of authorities, the committee add the solemn and unanimous decision of the Supreme Court, in a case which fully and distinctly submitted the constitutional question to their cognizance, may they not ask, in the language of Mr. Dallas, " can it be deemed a violation of the right of private opinion to consider the constitutionality of a national bank as a question forever settled and at rest?""
And here the committee beg to be distinctly understood, as utterly disclaiming the idea of ascribing to the decision of any or of all the departments of the Government, upon a great constitutional question, the binding authority which belongs to judicial precedents, in cases of mere private right, depending upon the construction of the ordinary acts of the Legislature. No length of prescription, or concurrence of authority, can consecrate the usurpation of powers subversive of public liberty, and destructive of public happiness. But, where the power exercised is clearly conducive to tlie public welfare, and its constitutionality is merely doubtful, it would seem to be one of the most obvious dictates ot practical wisdom, to regard the decision of those who had the best means of ascertaining the intention of the constitution, and who were actuated by the most undoubted purity and disinterestedness of motive, as of sufficient authority, at least, to overrule theoretical objections and silence individual scruples.
The committee will now submit a few remarks, with the design of showing, that, viewing the constitutionality of the bank as an original question, tlie arguments in its favor are, at least, as strong as those against it.
pThe earliest, and (he principal objection urged against the constitutionality of a national bank, was, that Congress had not the power to create corporations^ That Congress has a distinct and substantive power to create corporations, without reference to the objects entrusted to its jurisdiction, is a proposition which never has been maintained, within the knowledge of the committee; but, that any one of the powers, expressly conferred upon Congress, is subject to the limitation that it shall not be carried into effect by the agency of a corporation, is a proposition which cannot be maintained, in tlie opinion of the committee.
If Congress, under the authority to pass all laws necessary and proper for carrying into effect the powers vested in all or any of the departments of the Government, may rightfully pass a law inflicting the punishment of death, without any other authority, it is difficult to conceive why it may not pass a law, under tlie same authority, for the more humble purpose of creating a corporation. The power of creating a corporation is one ot the lowest attributes^ or, more properly speaking, incidents, of sovereign power. The chartering of a bank, for example, does not authorize the corporation to do any thing:
which the individuals composing it might not do without the charter. It is the right of every individual of the Union to give credit to whom he chooses, and to obtain credit where he can get it. It is not the policy of any commer cial country to restrict the free circulation of credit, whether in the form of promissory notes, bills of exchange, or bank notes. The charter of the Bank of the United States, therefore, merely enables the corporation to do. ill an artificial capacity, and with more convenience, what it would be lawful for the individual corporators to do without incorporation. Mr. Girard established a bank in Philadelphia, without a charter, which was in very high credit within the sphere of its circulation; and it cannot be doubted that ne might have formed a banking co-partnership with the principal capitalists in the other commercial cities of the. Union, of which the bills would have had a general credit in every part of the country, particularly if the Federal Government had provided that these bills should be received in discharge of its dues.
The only material particular in which the charter of the Bank ut the United States confers a privilege upon tlie corporation, apparently inconsistent with the State laws, is, tlie exemption of the individual property of the corporators from responsibility for the debts of the corporation. But, if the community deal with be bank, knowing that the capital subscribed is alone liable for its debts, no one can complain either of imposition or injury, and, in point of fact, no one ever has complained on that score, or ever will. The real complaint against the bank, is not that it has not a sufficient basis for its credit, but tilt its credit is too extensive. The objection lies, therefore, not against the artificial character communicated to the stockholders by the charter, but against the pecuniary operations of the bank itself. Now, these operations consist in the. use ot its own capital—a faculty not surely derived from the Government, but, in the exercise of which, the Government imposes many useful restrictions for the benefit of itself and of the community.
The committee have presented this brief analysis of a bank corporation, with tlie view of showing that there is nothing, in the nature of the thing, which renders it unfit to be an instrument in the hands of a Government, admitted to be sovereign in its appropriate sphere, for carrying into effect powers expressly delegated.
It now remains for tlie committee to show that the Bank of tlie United •States is a " necessary and proper," or, in other words, a natural and appropriate means of executing the powers vested in the Federal Government. In the discussion of 1791, and also in that before the Supreme Court, the powers of raising, collecting, and disbursing the public revenue, of burrowing money on the credit of the United States, and paying the public debt, were those which were supposed most clearly to carry with them the incidental right of Incorporating a bank, to facilitate these operations. There can be no doubt that these fiscal operations are greatly facilitated by a bank, and, it is confidently believed, tilt no person has presided twelve months over the treasury, from its first organization to the present time, without coming to the conclusion that such an institution is exceedingly useful to the public finances in time of peace, but indispensable in time of war. But, as this view of the question has been fully unfolded in former discussions, familiar to the House, the committee will proceed to examine the relation which the Bank of the United States bears to another of the powers of the Federal Government, but slightly adverted to in former discussions of the subject.
The power to "' coin money and fix the value thereof," is expressly and exclusively vested in Congress. This grant, was evidently intended to invest. Congress with the power of regulating the circulating medium. tt Coin" was regarded, at the period of framing the constitution, as synonymous with '" currency;" as it was then generally believed tilt bank notes could only be maintained in circulation by being the true representative of the precious metals. The word "coin," therefore, must be regarded as a particular term, standing as the representative of a general idea. No principle of sound construction will justify a rigid adherence to the letter, in opposition to the plain intention of the clause. If, for example, the gold bars of Ricardo should be substituted for our present coins, by the general consent of the commercial world, could it be maintained that Congress would not have the power to make such money, and fix its value, because it is nottt coined?'' This would be sacrificing sense to sound, and substance to mere form. This clause of the constitution is analogous? to that which gives Congress the power ^to establish post roads." Giving to the word ''establish" its restricted interpretation, as being equivalent to t' fix," or " prescribe," can it be doubted that Congress has the power to establish a canal or a river, as a post route, as well as a road? Roads were the ordinary channels of conveyance, and the term was, therefore, used as synonymous wilt "routes," whatever might be the channel of transportation; and, in like, manner, *' coin," being the ordinary and most known form of a circulating medium, that term was used as synonymous with currency.
An argument in favor of the view just taken, may be fairly deduced from the (act, that the States are expressly prohibited from lt coining money, or emitting bills of credit," and from " making any thing but gold and silver a lawful tender in payment of debts." This strongly confirms the idea, that (he subject of regulating the circulating medium, whether consisting of coin or paper, was, at the same time that it was taken from the control of the States, vested in the only depository in which it could be placed, consistently with the obvious design of having a common measure of value throughout the Union.
But. even if it should be conceded, that the grant of power to " coin money and fix the value thereof," does not, in its terms, give Congress the power of regulating any other than the " coined" currency of the Union, may not the power of regulating any substituted currency, and especially one which is the professed representative of coin, be fairly claimed as an incidental power— as an essential means of carrying into effect the plain intention of the constitution, in clothing Congress with the principal power? This power was granted in the same clause with that to regulate weights and measures, and for similar reasons. The one was designed to ensure, a uniform measure of value, as the other was designed to ensure a uniform measure of quantity. The former is decidedly the more important, and belongs essentially to the General Government, according to every just conception of our system. A currency of uniform value is essential to what every one will admit to be ol cardinal importance—the equal action of our revenue system upon the different parts of the Union. The state of things which existed when the bank was incorporated, turnished a most pregnant commentary on this clause ol the constitution. The currency of the country consisted of the paper of local banks, variously depreciated. At one of the principal sea ports the local currency was twenty per cent. below par. Now it was in vain for Congress to regulate the value of coin, when the actual currency, professing to be its equivalent, bore no fixed relation to it. This great and essential power of fixing the standard of value, was, in point of fact, taken from Congress, and exercised by some hundreds of irresponsible banking corporations, with the strongest human motives to abuse it, because their enormous profits resulted from the abuse. The power of laying and collecting imposts and excises is expressly subject to the condition, that they " shall be uniform throughout (he United Stales;" and it is also provided, that " no preference shall be given, by any regulation of commerce or revenue, to the ports of one State over those of another." Now, when it is known that the circulating medium of Baltimore was twenty per cent. below the value of the circulating medium of Boston, is it not apparent that an impost duty,though nominally uniform,would, in effect, make a discrimination in favor of Baltimore, proportioned to the depreciation of the local currency? Congress, therefore, not only had the power, but, as it seems to the committee, were under the most solemn constitutional obligations to restore the disordered currency; and the Bank of the United States was not only an appropriate means for the accomplishment of that end, but, in tlie opinion of the committee, tlie only safe and effectual means that could have been used.
Such are the authorities, and such the arguments, which have brought the committee to the conclusion, that the power to incorporate a bank is incidental to the powers of collecting and disbursing the public revenue; of borrowing money on the credit of the United States; of paying the public debt; and,
above all, of fixing and regulating the standard of value, and thereby ensuring, at least so far as the medium of payment is concerned, the uniformity and equality of taxation.
II. The next question proposed for consideration, is the expediency of establishing an incorporated bank, with a view to promote the great ends already indicated- In discussing the constitutionality of such a measure, some of the considerations which render it expedient have. been sliglitly unfolded. But these require a more full and complete development, while others remain to be presented.
It must be assumed as the basis of all sound reasoning on this subject, mat the existence of a paper currency, issued by banks deriving their charters from the State Governments, cannot be prohibited by Congress. Indeed, bank credit and bank paper are so extensively interwoven with the commercial operations of society, that, even if Congress bad the constitutional power, it would be utterly impossible to produce so entire a change in the monetary system of the country, as to abolish the agency of banks of discount, without, involving the community in all the distressing embarrassments usually attendant, on great political revolutions, subverting the titles to private property. The sudden withdrawal of some hundred millions of bank credit, would be equivalent, in its effects, to the arbitrary and despotic transfer of the property of one portion of the community to another, to the extent, probably, ot half that amount. Whatever, therefore, may be the advantages of a purely metallic currency, and whatever the objections to a circulating medium, partly composed of hank paper, tlie committee consider that they are precluded, by the existing state, of things, from instituting a comparison between them, with a view to any practical result.
If they were not thus precluded, and it were submitted to them as an original question, whether the acknowledged and manifold facilities of bank credit and bank paper are not more than counterbalanced by the distressing vicissitudes in trade incident to their use, they are. by no means prepared to say, that they would not give a decided preference to the more costly and cumbersome medium.
But the question really presented for their determination, is not between a metallic and a paper currency, but between a paper currency of uniform value, and subject to the control of the only power competent to its regula.tion, and a paper currency of varying and fluctuating value, and subject, to no common or adequate control whatever. On this question, it would seem that there could scarcely exist a difference of opinion: and that. this is substantially the question involved in considering the expediency of a national bank, will satisfactorily appear by a comparison of the state of the currency previous to the establishment, of the present bank, and its condition for the last ten years, < Soon after the expiration of the charter of the first Bank of tlie United States, an immense number of local banks sprung up under the pecuniary exigencies produced by the withdrawal of so large an amount of bank credit, neces- sari ly resulted from the winding; up of its concerns—an amount falling very. little short of fifteen millions of dollars., These banks being entirely free from the salutary control which the Bank of Tlie United States had recently exercised over the local institutions, commenced that system of imprudent trading and excessive issues, which speedily involved the country in all the embar-rassmcnts of a disordered currency .j The extraordinary stimulus of a heavy war expenditure, derived principally from loans, and a corresponding multiplication of local banks, chartered by tlie double score in some of the States, hastened the catastrophe which must have occurred, at no distant period, without these extraordinary causes. The last year of the war presented the singular and melancholy spectacle of a nation abounding in resources, a people abounding in self-devoting patriotism, and a Government reduced to the very brink of avowed bankruptcy, solely for the want of a national institution, which, at. the same time that it would have facilitated tlie Government loans and other treasury operations, would have furnished a circulating me
(Hum of general credit in every part of tie Union. In this view of the subject. the committee are fully sustained by the opinion of Mr. Dallas, then Secretary of the Treasury, and by the concurring and almost unanimous opinion of ail parties in Congress: for, whatever diversity of opinion prevailed, as to the proper basis and oiganization of a bank, almost every one agreed that a na • tional bank, of some sort, was indispensably necessary to rescue the country from the greatest of financial calamities.
The committee will now present a brief exposition of the state of currency at the close of the war; of the injury which resulted from it, ;;s well to the Government as to tlie community; and their reasons for believing that it could not have been restored to a sound condition, and cannot now be preserved in that condition, without the agency of snch an institution as tlie Bank of tlie United States.
The price current appended to this report will exhibit a scale of depreciation in tlie local currency, ranging, through various degrees, to twenty, and even to twenty-live per cent. Among tlie principal Eastern cities, Washington and Baltimore were the points at which the depreciation was greatest. The paper of the banks in these places was from twenty to twenty-two per cent. below par. At Philadelphia the depreciation was considerably less, though, even there, it was from seventeen to eighteen per cent. In ISew York and Charleston, it was from seven to ten per cent. But, in tl>e interior of the country, where banks were established, the depreciation was even greater than at Washington and Baltimore. In the western part o(" Pennsylvania. and particularly at Pittsburgh, it was twenty-live per cent. These statements, however, of the relative depreciation ofbank paper at. various places, as compared with specie, give a very inadequate idea of the enormous evil inflicted upon the community by the excessive issues of bank paper. No proposition is belter established tlian that the value of money, whether it consists of specie or paper, is depreciated in exact proportion to tlie increase of its quantity, in any given state of the demand for it. If, for example, the banks, in 1816, doubled the quantity of the circulating medium by their excessive issues, they produced a general degredation of the entire mass of the currency, including gold and silver, proportioned to the redundancy of tlie issues, and wholly independent of the relative depreciation ofbank paper at different places, as compared with specie. The nominal money price of every article was, of course, one hundred per cent. higher than it would have been, but for the duplication of the quantity of the circulating medium. Money is nothing more nor less than the measure by which the relative value of all articles of merchandise is ascertained. If, when the circulating medium is fifty millions, ;in article should c;>st one dollar, it would certainly cost two, if, without any increase of the uses of a circulating medium, its quantity should be increased to one hundred millions. This rise in the price of commodities, or depreciation in the value of money, as compared with them, would not be owing to the want of credit in the bank bills, of which tlie cnn'ency happened to be composed. It would exist, though tliese bills were of undoubted credit, and convertible into specie at the pleasure of tlie holder, and would result simply from the redundancy of their quantity. It is important to a just understanding of tlie subject, tilt the relative depreciation of bank paper at different places, as compared with specie, should not be confounded with this general depreciation of the entire mass of the circulating medium, including specie. Though closely allied, both in their causes and effects, they deserve io be separately considered.
Tlie evils resulting from the relative depreciation of bank paper at different places, are more easily traced to their causes, more palpable in their nature, and, consequently, more generally understood by the community. Though much less ruinous than the evils resulting from the general depreciation of the whole currency, they are yet of sufficient magnitude to demand a full exposition.
A very serious evil, already hinted at, which grew out of the relative depreciation ofbank paper, at the different points of importation, was its inevi-
table tendency to draw all the importations of foreign merchandise to the cities where the depreciation was greatest, and divert them from thus'c where the currency was comparatively sound. IF the. Bank of tlie United States had not been established, and the Government had been left without any alternative but to receive tlie depreciated local currency, it is difficult to imagine the extent to which the evasion of the revenue laws would have been carried. Every State would have had an interest to encourage the excessive issues of its banks, and increase the degredation of its currency, with a view to attract foreign commerce. Even in tlie condition which the currency liad readied in 1816, Boston, and New York, and Charleston, would have flund it advantageous to derive the supplies of foreign merchandise through Baiti-more; and commerce would, undoubtedly, have taken that direction, had not the currency been corrected. To avoid this injurious diversion of foreign imports, Massachusetts, and New York, and South Carolina, would have been driven, by all motives of self defence and self interest, to degrade (heir respective currencies at least to a parv.'ith tlie currency of Baltimore? and thus a rivalry in (lie career ol depreciation would have sprung up, to which no limit can be assigned. As tlie tendency of this state of tilings would have been to cause the largest portion of the revenue to be collected at a few places, and in (lie most depreciated of (lie local currency, it would have followed th;it a very small part of that revenue would have been disbursed at tlie points where it was collected. Tlie Government would, consequently, have been compelled to sustain a heavy loss upon the transfer of its funds to the points of expenditure. The annual loss which would have resulted from these causes alone, cannot be estimated at a less sum than two millions of dollars.
But the principal loss which resulted from the relative depreciation of bank paper at different places, and its want of general credit, was tilt sustained by the community in tlie great operations of commercial exchange. Tlie extent of these operations annually, may be safely estimated at nixty millions of dollars. Upon tills sum, the loss sustained by tlie merchants, and planters, and farmers, and manufacturers, was not probably less tlian an average of ren per cent., being the excess of tlie rate of exchange between its natural rate in a sound state of tlie currency, and beyond tlie rate to which it has been actually reduced by the operations of the Bank of the United States. It will be tlius perceived, that an annual tax of six millions of dollars was levied from the industrious and productive classes, by the large moneyed capitalists in our commercial cities, wlio were engaged in tlie business of brokerage. A variously depreciated currency, and a fluctuating state of the exchanges, open a wide and abundant harvest to the money brokers; and it is not, therefore, surprising, tilt they should be opposed to an institution, winch, at tlie same time that it has relieved tlie community froin the enormous tax just stated, has deprived them of tlie enormous profits which they derived from speculating in the business of exchange. In addition to the losses sustained by the conimu • nity, in the great operations of exchange, extensive losses were suffered throughout the interior of tlie country in all the smaller operations of trade, as well as by the failure of the numerous paper banks, puffed into a factitious credit by fraudulent artifices, and having no substantial basis of capital to ensure the redemption of their bills,
But no adequate conception can be formed of the evils of a depreciated currency, without looking beyond the relative depreciation, at different places. to tlie general depreciation of the entire mass. It appears from (he report of Mr. Crawford, tlie Secretary of the Treasury, in 1820, tilt, during (he general suspension of specie payments, by the local banks, in the years 1815 and 181(i, the circulating medium of the United States had reached the aggregate amount of one hundred and ten millions of dollars, and that, in the year 1819, it had been reduced to forty-five millions of dollars, being a reduction of fifty-nine per cent. in the short period of four years. The committee are inclined to the opinion, that tlie severe and distressing operation of restoring a vicious currency to a sound state, by the calling in of bank paper, and the curtailment of bank discounts, had carried the reduction of the currency, in 1819,