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ity. Commercial credit is the creation of modern times, and belongs, in its highest perfection, only to the most enlightened and best-governed nations, In the primitive ages of commerce article is exchanged for article, without the use of money or credit. This is simple barter, But, in its progress, a symbol of property, a common measure of value, is introduced, to facili. tate the exchanges of property; and this may be iron, or any other article fixed by law or by consent, but has generally been gold and silver. This, certainly, is a great adyance beyond simple barter, but no greater than has been gained, in modern times, by proceeding from the mere use of money to the use of credit, Credit is the vital air of the system of modern commerce. It has done more, a thousand times, to enrich nations, than all the mines of all the world. It has excited labour, stimulated manufactures, pushed commerce over every sea, and brought every nation, every kingdom, and every small tribe, among the races of men, to be known to all the rest. It has raised armies, equipped navies, and, triumphing over the gross power of mere numbers, it has established national superiority on the foundation of intelligence, wealth, and well-directed industry. Credit is to money what money is to articles of merchandise. As hard money represents property, so credit représents hard money; and it is capable of supplying the place of money so completely, that there are writers of distinction, especially of the Scotch school, who insist that no hard money is necessary for the interests of commerce, I am not of that opinion,

I hold the immediate convertibility of bank-notes into specie to be an indispensable security for their retaining their value; but, consistently with this security, and indeed founded upon it, credit becomes the great agent of exchange. It is allowed that it increases consumption by anticipating products; and that it supplies present wants out of future means. And as it circulates commodities without the actual use of gold and silver, it not only saves much by doing away with the constant transportation of the precious metals from place to place, but accomplishes exchanges with a degree of despatch and punctuality not otherwise to be attained. All bills of exchange, all notes running upon time, as well as the paper circulation of the banks, belong to the system of commercial credit. They are parts of one great whole. And, Sir, unless we are to reject the lights of experience, and to repudiate the benefits which other nations enjoy, and which we ourselves have hitherto enjoyed, we should protect this system with unceasing watchfulness, taking care, on the one hand, to give it full and fair play, and, on the other, to guard it against dangerous excess. We shall show ourselves unskilful and unfaithful statesmen, if we do not keep clear of extremes on both sides.

It is very true that commercial credit, and the system of banking, as a part of it, does furnish a substitute for capital. It is very true that this system enables men to do business, to some extent, on borrowed capital; and those who wish to ruin all who make use of borrowed capital act wisely to that end by decrying it.

This commercial credit, Sir, depends on wise laws, steadily administered. Indeed, the best-governed countries are always the richest. With good political systems, natural disadvantages and the competition of all the world may be defied. Without such systems, climate, soil, position, and every thing else, may favour the progress of wealth, and yet nations be poor. What but bad laws and bad government has retarded the progress of commerce, credit, and wealth in the peninsula of Spain and Portugal, a part of Europe distinguished for its natural advantages, and especially suited by its position for an extensive commerce, with the sea on three sides of it, and as many good harbours as all the rest of Europe ? The whole history of commerce shows that it flourishes or fades just in proportion as property, credit, and the fruits of labour are protected by free and just political systems. Credit cannot exist under arbitrary and rapacious governments, and commerce cannot exist without credit. Tripoli and Tunis and Algiers are countries, above all others, in which hard money is indispensable; because, under such governments, nothing is valuable which cannot be secreted and hoarded. And as government rises in the scale of intelligence and liberty, from these barbarous despotisms to the highest rank of free States, its progress is marked, at every step, by a higher degree of security and of credit. This undeniable truth should make wellinformed men ashamed to cry out against banks and banking, as being aristocratical, oppressive to the poor, or partaking of the character of dangerous monopoly. Banks are a part of the great system of commercial credit, and have done much, under the influence of good government, to aid and elevate that credit. What is their history? Where do we first find them? Do they make their first appearance in despotic governments, and show themselves as inventions of power to oppress the people? The first bank was that of Venice; the second, that of Genoa. From the example of these republics, they were next established in Holland and the free city of Hamburg. England followed these examples, but not until she had been delivered from the tyranny of the Stuarts, by the revolution of 1688. It was William the Deliverer, and not William the Conqueror, that established the Bank of England. Who supposes that a Bank of England could have existed in the times of Empson and Dudley ?? Who supposes that it could have lived under those ministers of Charles the Second who shut up the exchequer, or that its vaults could have been secure against the arbitrary power of the brother and successor of that monarch?

2 “They who trade on borrowed capital ought to break," was a saying as. cribed to President Jackson, and was much commented on at the time as a strange thing to be uttered by a prince of the Democracy.

The history of banks belongs to the history of commerce and the general history of liberty. It belongs to the history of those causes which, in a long course of years, raised the middle and lower orders of society to a state of intelligence aud property, in spite of the iron sway of the feudal system. In what instance have they endangered liberty or overcome the laws? Their very existence, on the contrary, depends on the security and the rule both of liberty and law. Why, Sir, have we not been taught, in our earliest reading, that to the birth of a commercial spirit, to associations for trade, to the guilds and companies formed in the towns, we are to look for the first emergence of liberty from the darkness of the Middle Ages; for the first faint blush of that morning which has grown brighter and brighter till the perfect day has come? And it is just as reasonable to say that bills of exchange are dangerous to liberty, that promissory notes are dangerous to liberty, that the power of regulating the coin is dangerous to liberty, as that credit, and banking, as a part of credit, are dangerous to liberty.

Sir, I hardly know a writer on these subjects who has not selected the United States as an eminent and striking instance, to show the advantages of well-established credit, and the benefit of its expansion, to a degree not incompatible with safety, by a paper circulation. Or, if they do not mention the United States, they describe just such a country; that is to say, a new and fast-growing country. Hitherto, it must be confessed, our success has been great. With some breaks and intervals, our progress has been rapid, because our system has been good. We have preserved and fostered credit, till all have become

3 King Henry the Seventh, near the close of his life, grew frightfully avari. cious and rapacious, and Empson and Dudley, as Barons of the Exchequer, were the agents of his avarice and rapacity. Both were lawyers, of inventive heads and unfeeling hearts, who, says Lingard, “despoiled the subject to all the King's coffers, and despoiled the King to enrich themselves.” The measures used by them were extortionate and oppressive in the last degree; and the men became so odious to the people, that, early in the next reign, it was found neces Bary to put them to death.


interested in its further continuance and preservation. It has run deep and wide into our whole system of social life. Every man feels the vibration, when a blow is struck upon it. And this is the reason why nobody has escaped the influence of . the Secretary's recent measure. While credit is delicate, sensitive, easily wounded, and more easily alarmed, it is also infinitely ramified, diversified, extending everywhere, and touching every thing.

There never was a moment in which so many individuals felt their own private interest to be directly affected by what has been done, and what is to be done. There never was a moment, therefore, in which so many straining eyes were turned towards Congress. It is felt, by every one, that this is a case in which the acts of the government come directly home to him, and produce either good or evil, every hour, upon his personal and private condition. And how is the public expectation met? How is this intense, this agonized expectation answered ? I am grieved to say, I am ashamed to say, it is answered by declamation against the bank as a monster, by loud cries against a moneyed aristocracy, by pretended zeal for a hardmoney system, and by professions of favour and regard to the poor.

The poor! We are waging war for the benefit of the poor ! We slay that monster, the bank, that we may defeat the unjust purposes of the rich, and elevate and protect the poor! And what is the effect of all this? What happens to the poor, and all the middling classes, in consequence of this warfare ? Where are they? Are they well fed, well clothed, well employed, independent, happy, and grateful? They are all' at the feet of the capitalists; they are in the jaws of usury. If there be hearts of stone in human bosoms, they are at the mercy of those who have such hearts. Look to the rates of interest, mounting to twenty, thirty, fifty per cent. Sir, this measure of government has transferred millions upon millions of hardearned property, in the form of extra interest, from the industrious classes to the capitalists, from the poor to the rich. And this is called putting down a moneyed aristocracy! Sir, there are thousands of families who have diminished, not their luxuries, not their amusements, but their meat and their bread, that they might be able to save their credit by paying enormous interest. And there are other thousands, who, having lost their employment, bave lost every thing, and who yet hear, amidst the bitterness of their anguish, that the great motive of govern. ment is kindness to the poor - Speech for continuing the Bank Charter, March, 1834.



THE extent of the patronage springing from the power of appointment and removal is so great, that it brings a dangerous mass of private and personal interest into operation in all great public elections and public questions. This is a mischief which has reached, already, an alarming height. The principle of republican governments, we are taught, is public virtue ; and whatever tends either to corrupt this principle, to debase it, or to weaken its force, tends, in the same degree, to the final overthrow of such governments. Our representative systems suppose that, in exercising the high right of suffrage, the greatest of all political rights, and in forming opinions on great public measures, men will act conscientiously, under the influence of public principle and patriotic duty; and that, in supporting or opposing men or measures, there will be a general prevalence of honest, intelligent judgment and manly independence. These presumptions lie at the foundation of all hope of maintaining governments entirely popular. Whenever personal, individual, or selfish motives influence the conduct of individuals on public questions, they affect the safety of the whole system. When these motives run deep and wide, and come in serious conflict with higher, purer, and more patriotic purposes, they greatly endanger that system; and all will admit that, if they become general and overwhelming, so that all public princi. ple is lost sight of, and every election becomes a mere scramble for office, the system inevitably must fall. Every wise man, in and out of government, will endeavour, therefore, to promote the ascendency of public virtue and public principle, and to restrain, as far as practicable, in the actual operation of our institutions, the influence of selfish and private interests.

I concur with those who think that, looking to the present, and looking also to the future, and regarding all the probabil. ities that await us in reference to the character and qualities of those who may fill the executive chair, it is important to the stability of government and the welfare of the people, that there should be a check to the progress of official influence and patronage. The unlimited power to grant office, and to take it away, gives a command over the hopes and fears of a vast multitude of men. It is generally true, that he who controls another man's means of living controls his will. Where there are favours to be granted, there are usually enough to solicit for them; and when favours once granted may be withdrawn at

4 See the piece headed "The Spoils to the Victors,” page 402.

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