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countries, private bankers, having no legal authority over the coin, issue notes for circulation. But this they do always with the consent of government, express or implied; and government restrains and regulates all their operations at its pleasure. It would be a startling proposition, in any other part of the world, that the prerogative of coining money, held by government, was liable to be defeated, counteracted, or impeded, by another prerogative, held in other hands, of authorizing a paper circulation.
It is further to be observed, that the States cannot issue bills of credit; not that they cannot make them a legal tender, but that they cannot issue them at all. Is not this a clear indication of the intent of the Constitution to restrain the States, as well from establishing a paper circulation, as from interfering with the metallic circulation ? Banks have been created by States with no capital whatever; their notes being put into circulation simply on the credit of the State, or the State law. What are the issues of such banks but bills of credit, issued by the State ?
I confess, Mr. President, that the more I reflect on this subject, the more clearly does my mind approach the conclusion, that the creation of State banks, for the purpose and with the power of circulating paper, is not consistent with the grants and prohibitions of the Constitution. But, Sir, this is not now the question. The question is, not whether the States have the power; it is, whether they alone have the power. May they rightfully exclude the United States from all interference with the paper currency? Are we interlopers, when we create a bank of circulation? Do we owe them a seigniorage for the circulation of bills, by a corporation created by Congress ? Up to the present time, the States have been content with a concurrent power. They have, indeed, controlled vastly the larger portion of the circulation; but they have not claimed exclusive authority over the whole. They have demanded no tax or tribute from a bank issuing paper under the authority of Congress. Nor do I know that any State or States now insist upon it. It may be, that individual States have put forth such claims, in their legislative capacity; but at present I recollect no instance. The amendment, however, which is now proposed, asserts the claim, and I cannot consent to yield to it. We seem to be making the last struggle for the authority of Congress to interfere at all with the actual currency of the country. I shall never agree to surrender that authority; I would as soon yield the coinage power itself; nor do I think there would be much greater danger, nor a much clearer departure from constitutional principle, in a consenting to such surrender, than in acquiescing in what is now proposed.
THE PRESIDENTIAL VETO OF THE UNITED
STATES BANK BILL.*
MR. PRESIDENT, no one will deny the high importance of the subject now before us. Congress, after full deliberation and discussion, has passed a bill, by decisive majorities, in both houses, for extending the duration of the Bank of the United States. It has not adopted this measure until its attention had been called to the subject, in three successive annual messages of the President. The bill having been thus passed by both houses, and having been duly presented to the President, instead of signing and approving it, he has returned it with objections. These objections go against the whole substance of the law originally creating the bank. They deny, in effect, that the bank is constitutional; they deny that it is expedient; they deny that it is necessary for the public service.
It is not to be doubted, that the Constitution gives the President the power which he has now exercised; but while the power is admitted, the grounds upon which it has been exerted become fit subjects of examination. The Constitution makes it the duty of Congress, in cases like this, to reconsider the measure which they have passed, to weigh the force of the President's objections to that measure, and to take a new vote upon the question. .
Before the Senate proceeds to this second vote, I propose to make some remarks upon those objections. And, in the first place, it is to be observed, that they are such as to extinguish all hope that the present bank, or any bank at all resembling it, or resembling any known similar institution, can ever receive his
* A Speech delivered in the Senate of the United States, on the 11th of July, 1832, on the President's Veto of the Bank Bill.
approbation. He states no terms, no qualifications, no conditions, no modifications, which can reconcile him to the essential provisions of the existing charter. He is against the bank, and against any bank constituted in a manner known either to this or any other country. One advantage, therefore, is certainly obtained by presenting him the bill. It has caused the President's sentiments to be made known. There is no longer any mystery, no longer a contest between hope and fear, or between those prophets who predicted a veto and those who foretold an approval. The bill is negatived; the President has assumed the responsibility of putting an end to the bank; and the country must prepare itself to meet that change in its concerns which the expiration of the charter will produce. Mr. President, I will not conceal my opinion that the affairs of the country are approaching an important and dangerous crisis. At the very moment of almost unparalleled general prosperity, there appears an unaccountable disposition to destroy the most useful and most approved institutions of the government. Indeed, it seems to be in the midst of all this national happiness that some are found openly to question the advantages of the Constitution itself; and many more ready to embarrass the exercise of its just power, weaken its authority, and undermine its foundations. How far these notions may be carried, it is impossible yet to say. We have before us the practical result of one of them. The bank has fallen, or is to fall.
It is now certain, that, without a change in our public counsels, this bank will not be continued, nor will any other be established, which, according to the general sense and language of mankind, can be entitled to the name. Within three years and nine months from the present moment, the charter of the bank expires; within that period, therefore, it must wind up its con
It must call in its debts, withdraw its bills from circulation, and cease from all its ordinary operations. All this is to be done in three years and nine months; because, although there is a provision in the charter rendering it lawful to use the corporate name for two years after the expiration of the charter, yet this is allowed only for the purpose of suits and for the sale of the estate belonging to the bank, and for no other purpose whatever. The whole active business of the bank, its custody of public deposits, its transfer of public moneys, its dealing in exchange, all its loans and discounts, and all its issues of bills for circulation, must cease and determine on or before the third day of March, 1836; and within the same period its debts must be collected, as no new contract can be made with it, as a corporation, for the renewal of loans, or discount of notes or bills, after that time.
The President is of opinion, that this time is long enough to close the concerns of the institution without inconvenience. His language is, “ The time allowed the bank to close its concerns is ample, and if it has been well managed, its pressure will be light, and heavy only in case its management has been bad. If, therefore, it shall produce distress, the fault will be its own." Sir, this is all no more than general statement, without fact or argument to support it. We know what the management of the bank has been, and we know the present state of its affairs. We can judge, therefore, whether it be probable that its capital can be all called in, and the circulation of its bills withdrawn, in three years and nine months, by any discretion or prudence in management, without producing distress. The bank has discounted liberally, in compliance with the wants of the community. The amount due to it on loans and discounts, in certain large divisions of the country, is great; so great, that I do not perceive how any man can believe that it can be paid, within the time now limited, without distress. Let us look at known facts. Thirty millions of the capital of the bank are now out, on loans and discounts, in the States on the Mississippi and its waters; ten millions of which are loaned on the discount of bills of exchange, foreign and domestic, and twenty millions on promissory notes. Now, Sir, how is it possible that this vast amount can be collected in so short a period without suffering, by any management whatever? We are to remember, that, when the collection of this debt begins, at that same time, the existing medium of payment, that is, the circulation of the bills of the bank, will begin also to be restrained and withdrawn; and thus the means of payment must be limited just when the necessity of making payment becomes pressing. The whole debt is to be paid, and within the same time the whole circulation withdrawn.
The local banks, where there are such, will be able to afford little assistance; because they themselves will feel a full share