PRELIMINARY VIEW.

FROM 1815 TO 1820

THE war with Great Britain commenced in holder, soon began to depreciate. In the second 1812, and ended in 1815. It was a short war, year of the war the depreciation had already bebut a necessary and important one, and intro- come enormous, especially towards the Canada duced several changes, and made some new frontier, where the war raged, and where money points of departure in American policy, which was most wanted. An officer setting out from are necessary to be understood in order to un- Washington with a supply of these notes found derstand the subsequent working of the govern- them sunk one-third by the time he arrived at ment, and the VIEW of that working which is the northern frontier-his every three dollars proposed to be given. counting but two. After all, the treasury notes 1. It struggled and labored under the state could not be used as a currency, neither legally, of the finances and the currency, and terminated nor in fact: they could only be used to obtain without any professed settlement of the cause local bank paper-itself greatly depreciated. for which it began. There was no national cur- All government securities were under par, even rency-no money, or its equivalent, which re- for depreciated bank notes. Loans were obtainpresented the same value in all places. The ed with great difficulty-at large discount-alfirst Bank of the United States had ceased to ex-most on the lender's own terms; and still atist in 1811. Gold, from being undervalued, had tainable only in depreciated local bank notes. ceased to be a currency-had become an article of merchandise, and of export-and was carried to foreign countries. Silver had been banished by the general use of bank notes, had been reduced to a small quantity, insufficient for a public demand; and, besides, would have been too the main one, with the insults and the outracumbrous for a national currency. Local banks ges connected with it—and without which there overspread the land; and upon these the federal would have been no declaration of war. The government, having lost the currency of the con- treaty of peace did not mention or allude to the stitution, was thrown for a currency and for subject-the first time, perhaps, in modern hisloans. They, unequal to the task, and having tory, in which a war was terminated by treaty removed their own foundations by banishing without any stipulation derived from its cause. specie with profuse paper issues, sunk under the Mr. Jefferson, in 1807, rejected upon his own double load of national and local wants, and responsibility, without even its communication stopped specie payments-all except those of to the Senate, the treaty of that year negotiated New England, which section of the Union was by Messrs. Monroe and Pinkney, because it did unfavorable to the war. Treasury notes were not contain an express renunciation of the prac then the resort of the federal government. tice of impressment-because it was silent on They were issued in great quantities; and not that point. It was a treaty of great moment, being convertible into coin at the will of the settled many troublesome questions, was very

In less than three years the government, paralyzed by the state of the finances, was forced to seek peace, and to make it, without securing, by any treaty stipulation, the object for which war had been declared. Impressment was the object

No other tongue but these results is necessary to show the value of that financial lesson, taught us by the war of 1812.

desirable for what it contained; but as it was silent on the main point, it was rejected, without even a reference to the Senate. Now we were in a like condition after a war. The war was 2. The establishment of the second national struggling for its own existence under the state bank grew out of this war. The failure of the of the finances, and had to be stopped without local banks was enough to prove the necessity securing by treaty the object for which it was of a national currency, and the re-establishment declared. The object was obtained, however, of a national bank was the accepted remedy. by the war itself. It showed the British govern- No one seemed to think of the currency of the ment that the people of the United States would constitution-especially of that gold currency fight upon that point-that she would have war upon which the business of the world had been again if she impressed again and there has been carried on from the beginning of the world, and no impressment since. Near forty years with- by empires whose expenses for a week were out a case! when we were not as many days, equal to those of the United States for a year, oftentimes, without cases before, and of the and which the framers of the constitution had so most insulting and outrageous nature. The carefully secured and guarded for their country. spirit and patriotism of the people in furnishing A national bank was the only remedy thought the supplies, volunteering for the service, and of. Its constitutionality was believed by some standing to the contest in the general wreck of to have been vindicated by the events of the war. the finances and the currency, without regard to Its expediency was generally admitted. The their own losses-and the heroic courage of the whole argument turned upon the word " necesarmy and navy, and of the militia and volunteers, sary," as used in the grant of implied powers at made the war successful and glorious in spite of the end of the enumeration of powers expressly empty treasuries; and extorted from a proud granted to Congress; and this necessity was af empire that security in point of fact which diplo- firmed and denied on each side at the time of the macy could not obtain as a treaty stipulation. establishment of the first national bank, with a And it was well. Since, and now, and hence- firmness and steadiness which showed that these forth, we hold exemption from impressment as fathers of the constitution knew that the whole we hold our independence-by right, and by field of argument lay there. Washington's quemight-and now want the treaty acknowledg-ries to his cabinet went to that point; the close ment of no nation on either point. But the glo- reasoning of Hamilton and Jefferson turned uprious termination of the war did not cure the on it. And it is worthy of note, in order to show evil of a ruined currency and defective finances, how much war has to do with the working of nor render less impressive the financial lesson government, and the trying of its powers, that which it taught. A return to the currency of the strongest illustration used by General Hamthe constitution—to the hard-money government ilton, and the one, perhaps, which turned the which our fathers gave us―no connection with question in Washington's mind, was the state banks-no bank paper for federal uses-the es- of the Indian war in the Northwest, then just tablishment of an independent treasury for the become a charge upon the new federal governfederal government; this was the financial les-ment, and beginning to assume the serious charson which the war taught. The new generation acter which it afterward attained. To carry on into whose hands the working of the government war at that time, with such Indians as were fell during the THIRTY YEARS, eventually availed then, supported by the British traders, themthemselves of that lesson:—with what effect, the selves countenanced by their government, at state of the country since, unprecedentedly pros- such a distance in the wilderness, and by the perous; the state of the currency, never de- young federal government, was a severe trial ranged; of the federal treasury, never polluted upon the finances of the federal treasury, as well with "unavailable funds," and constantly cram- as upon the courage and discipline of the troops; med to repletion with solid gold; the issue of and General Hamilton, the head of the treasury, the Mexican war, carried on triumphantly with- argued that with the aid of a national bank, the out a national bank, and with the public securi-war would be better and more successfully conties constantly above par-sufficiently proclaim. ducted: and, therefore, that it was "necessary,"