throw of domestic exchanges, and eventually a general, if not universal bankruptcy. We are sleeping over a volcano, until a national bank be established, and at work among us." It is not our intention, however, to enlarge on this point, exhibiting, as it still would do, an absolutely ocular demonstration of the truth of our position. Our object lies rather with what is to follow such conclusion, and to guide our readers into seeing how to compass this great remedy, rather than what it is; that we deem already done. Whoso is not already convinced, even by recent facts, we hold him. to be "bullet proof."

Upon our earlier financial experience, however, we would say a few words, as reminding our readers of facts less familiar. Our earliest trial of the efficacy of a national bank, as already alluded to, was amidst the desolation and overthrow of the revolutionary war. On the last day of the financially fatal year 1781, Congress passed an ordinance to incorporate the subscribers to the "Bank of North America," an institution to be now thankfully remembered by every American, for its powerful and happy influence, more especially as a fiscal agent, in giving vigor to an enfeebled and penniless government. Its actual capital, amidst universal poverty, was but four hundred thousand dollars-subscribed and paid for in shares of four hundred dollars each-but with a power of increase (never exercised) to ten millions of dollars; while additional energy as well as safety was given to it by the provision that its notes payable on demand should be receivable in payment of all taxes, duties and debts, due or that may become due or payable to the United States. Inadequately small as were the means, and unpropitious the circumstances, of this feeble prototype of a United States Bank, they still left it the influence and operation of a radically sound principle-a national regulator of the currency. Its services were therefore found to be at the time invaluable; and they who now urge the names of patriotism and liberty as against a United States Bank, as being in itself an agent of tyranny, had better first look back and calculate the revolutionary debt which patriotism and liberty owe to it. "This bank," says the historian of our revolution, "had an extraordinary effect in restoring public and private credit in

Resolutions, 26th May, 1781. Referred to and recognized in the Charter. Congressional Minutes, 1781.

the country, and was of immense utility in aiding the future operations of the financier."* A still more unquestioned and competent witness has stamped upon it the dictum of his high authority. "The aid," says Hamilton, "afforded to the United States by this institution during the remaining period of the war was of essential consequence." What eventually set it aside was a state policy course, singularly similar to that of the late Bank of the United States. Upon some dissatisfaction with Congress, it proceeded to apply for and obtained a new charter from the legislature of the state of Pennsylvania- thus coming under new responsibilities, and with many important modifications. Under these circumstances Hamilton urged then, as (if such proposition for its adoption were possible) we should urge now, "that the Pennsylvania Bank had become inadequate to its national duties, unsuited to the character of a fiscal agent under the federal constitution," and therefore to be set aside in toto on the question of the creation of a new national bank.

On the second day of March, 1791, after long and doubtful deliberation, was this first truly national bank-as being the first under the union that constituted us a nation-established, with a nominal capital of ten millions, of which amount it began with one fourth-the subscription being in shares of four hundred dollars each, three fourths of which was receivable in stock a charter of twenty years votes on the stock confined to citizens and the public deposites entrusted to its keeping, under the provision of its performance of the usual fiscal duties without charge. Of this bank let who will give the history, it must be one of eulogy; its course was alike honorable and profitable to itself, to the government, and to the country. To its stockholders its dividends averaged eight and three eighths (exactly thirteen thirty-fourths) per cent., and that while never loaning up even to twice its capital, one and eight tenths being its reported maximum. Nor was this effected either through selfish monopoly, and by repressing the growth of other banking institutions. On the contrary, it favored their existence wherever they were actually needed, and possessed of the requisite capital. Facts prove this. The United

Sparks's Life of Governeur Morris, Vol. I. p. 235.

+ Hamilton's Report on a National Bank, Dec. 13, 1790.

Its limit of capital was reduced from ten millions to two, though its actual capital was at the same time increased to eight hundred and thirty thousand dollars. This state charter has been renewed from time to time until the present. NO. XVI.-VOL. VIII.

53

States Bank began its course with three existing banking incorporations, namely, that of North America at Philadelphia, that of New York in the city of New York, and one in Boston. Its charter closed in 1811-amid eighty-nine sound state institutions, with authorized capital to the amount of fifty-two millions five hundred and ten thousand six hundred and one dollars. The national bank having itself spread, under the supplementary act of 1804, into eight efficient branches, viz.-the mother bank at Philadelphia, and branches at Boston, New York, Baltimore, Charleston, Savannah, City of Washington, and New Orleans;-the two last, however, having been established at the request of the secretary of the treasury, and for his convenience. Towards the government, as its fiscal agent, this bank realized, as its successor subsequently did, all that even theory could propose to itself; and that was, to collect, keep, transfer and disburse all the dues and payments of government, wheresoever made or demanded, without charge, without delay, and without one dollar's loss. Towards the country again, as the regulator of its currency and the equalizer of exchanges, we know nothing of it but good. But let us hear certainly a more competent, as well as perhaps a more unprejudiced judge, on the subject-representing, as he did, the political party that opposed it. Albert Gallatin, then secretary of the treasury, to whom was referred the petition of the bank for a recharter, after acknowledging that its affairs had been wisely and skilfully managed, thus sums up his estimate of its necessity as a fiscal agent: "The numerous banks now established might, it is true, afford considerable assistance to government in its fiscal operations. There is none, however, which could effect the transmission of public moneys with the same facility and to the same extent, as the Bank of the United States is enabled to do through its several branches. superior capital of that institution offers also a greater security against any possible losses, and greater resources in relation to loans. Nor is it eligible that the general government should, in respect to its own operations, be entirely dependent on institutions over which it has no control whatever. A national bank, deriving its charter from the national

The

Tucker, in his History of Banks, says twelve, with authorized capital to the amount of eighteen millions nine hundred and twenty-five thousand dollars. As he has not given particulars, we adhere to the contemporaneous report of the Secretary of the Treasury.

legislature, will at all times, and under every emergency, feel stronger inducements, both from interest and from a sense of duty, to afford to the Union every assistance within its power."*

But we stop short in our historical detail. We see that it would carry us too far and wide, and only fill up with facts familiar to all, the space we have destined to what we deem more needful, an analytical examination of the practical question now before the nation, bearing not upon the necessity, but the form of that which the country feels that it must have a NATIONAL BANK.

Before opening directly this question, however, we must be permitted to brush away a few preliminary prejudices still lingering, cobweb-like, over the popular judgment.

The unconstitutionality of a national bank, may indeed be now considered an exploded bugbear, abandoned, as the position has officially been, by those who gave it birth; among whom we need but name, to satisfy party men, Presidents Madison and Jackson. To such, however, as would put their assent to it on principle, we recommend a careful perusal of the constitutional question as conclusively argued in Hamilton's original report and subsequent defence.† For ourselves, we rest on this simple and incontrovertible principle, so ably argued out by the secretary, namely, that every power vested in a government is in its nature SOVEREIGN, and includes by force of the term a right to employ all the means requisite, and fairly applicable to the attainment of the ends of such power; and (to add Hamilton's guarding clause)" which are not precluded by restrictions and exceptions specified in the constitution, or not immoral, or not contrary to the essential ends of political society."—Opinion, p. 1.

The second misty prejudice before men's minds, relates to the vague notion of state banks being able to regulate themselves; in other words, that the army of issuers, amounting now, perhaps, to some fifteen hundred, (including those under the free banking law of several states,) want no HEAD to lead them. We answer to this, upon the demon

* Report of the secretary of the treasury on the subject of a national bank made to the senate, March 2d, 1809.

+ Report from treasury department, December 13th, 1790. Opinion of the secretary of the treasury on the constitutionality of a national bank, December 23d, 1791.

strative principles of science. A bank empowered by law to issue its promissory notes, payable to bearer, is, in truth, a mint that coins money out of that which costs it nothing, limited but by its credit. Its interest, therefore, is to coin; and it is against its interest to stop coining. Therefore is such power a simply expansive power, and left to itself, would, consequently, like all other such, (steam for instance,) indefinitely diffuse itself; that is, it would continue to coin paper into money, until the money depreciated to the cost of the paper and the manufacture of the notes. Such, then, is the money-making power, per se, by nature. The control comes not from the operation itself-not from within, but without comes the check. Let us see now wherein lies that needful and adequate guard. Shall we say, in the "integrity" and "moral principles" of the banker? Is this sufficient safely to regulate his issues? Assuredly not; for so long as he exchanges his notes for good commercial paper, he does it in good conscience; and yet may, in this very course, be ruining both himself and others, through the creation of a surplus beyond the wants of commerce; which, after a time, rolling back upon him, "avalanche-like," crushes both him and those who have trusted in him. Integrity, then, is not even the banker's individual safeguard, much less the country's. But "knowledge" and "prudence," perhaps? This, indeed, looks better; but let us see-supposing the local banker be not only honorable, but also wise and prudent, will this suffice for the country's safety? Let facts, we say again, answer it. Surely many such there are, and have been, among the presidents and cashiers of our numerous state institutions, during the present, as well as the former interval of the non-existence of a United States Bank; and yet have such saved the currency from being overthrown, or even themselves from ruin, and their banks from the necessity of suspension? And is not the cause why they have not done and could not do it, as obvious as it is conclusive? Power was wanting in addition to wisdom. Many among them saw the danger, still more apprehended its source, and all would willingly have avoided it, and like conscientious men did their best to do so; and yet it came even upon those who saw it clearest and labored most against it, simply because no one had the requisite power to control the rest. Therein lies the gist of the matter-there must be somewhere in the country adequate control; and that, if possible, apart from the interest