SECTION FOURTH.

CURRENCY AND CREDIT.

All will concede that a sound and well regulated system of finance, that shall promptly supply the nation with money to pay its debts when due, and not oppress or burden the industry of the country, is a great desideratum in this and in every other country. The President of the United States, in a late annual Message to Congress, has expressed the universal sentiment of the republic on this subject in these words: "The credit of the government may be regarded as the very soul of the government itself, a principle of vitality without which all its movements are languid, and all its operations embarrassed." In this spirit General Hamilton, the first Secretary of the Treasury, proposed at the organization of the present government of the Union, a system of funding the debts of the states incurred in the revolution and the establishment of a bank of the United States. The people of the United States, when the Constitution was adopted, were poor and prostrate from the effects of an eight years war with Great Britain, and their government was without credit. The financial plans of Hamilton were adopted by President Washington and Congress, and they speedily established the credit of the United States, and gave a great impulse and success to the busi

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ness of the country. The principle of preserving a firm national credit has been steadily maintained by all succeeding administrations. At different times there have been differences of opinion as to the constitutionality and expediency of a corporate Bank of the United States, but none as to the necessity of preserving unimpaired the national credit and financial honor.

A Bank of the United States has repeatedly received the legal sanction of Congress, of several Presidents, and of the Supreme Court of the United States. (See 4 Wheaton's R. 316, 432; 9 H. 860.) If the question was not settled by long practice, by judicial and legislative authority, we should doubt whether the United States possessed power to grant a charter for a bank to private stockholders, though it were declared the Fiscal Agent of the Treasury of the Union. The legal construction of the Constitution must be considered as settled by executive, congressional and supreme judicial decision running through half a century, but the question of expediency is open to Congress. In the course of that period the population and wealth of the country have rapidly advanced and the national debts arising from two defensive wars with Great Britain have been paid off by a wise system of economy, by a high regard to the credit of the Union. Our country was sparsely popula

ted and partially cultivated when the first bank was granted. The people had been exhausted by the war of the revolution and were poor. Our lands have now become well cultivated, filled with growing cities and villages, and instead of about four millions, the United States now contain about nineteen millions of comfortable and happy people. The present value of the entire property of the United States is estimated at four thousand millions of dollars, and the annual income of labor and capital at one thousand or twelve hundred millions, of which eight hundred millions are believed to be the product of labor.

In this changed condition of the country, the question of the best mode of maintaining the credit of the nation, and of managing its finances with a view to the convenience of the people, in our judgment, is one of expediency. Experience has shown us that the artificial expansions and contractions of the United States Bank and of the State Banks, without any inquiry as to their origin, have been the immediate cause of the pressure of 1834, the fancied prosperity of 1835 and 6, and the terrible convulsions, bankruptcy and ruin which followed. It is stated by President Tyler in his late annual Message, that during the 7 years prior to January 1st, 1837, the bank paper expansion of the United States rose, so that on that

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day 88 millions of dollars had been added to our circulating medium since 1830. As over expansions are of necessity followed by over contractions, convulsions and bankruptcy, public opinion demands a financial system of more steadiness and stability. Hence Congress, since 1837, has refused to allow its money to be loaned through the State Banks. To avoid the evil of excessive bank expansion several remedies have been proposed. The sub-treasury plan, brought forward by President Van Buren, placed the money of the Treasuin the hands of receivers who were to hold it sacredly in deposit, and disburse it on orders of the Secretary of the Treasury. President Van Buren, a sagacious and able man, was no doubt honestly desirous of finding a remedy for the great bank expansions of the United States, and it seems to us that he fell into the opposite error of adopting a plan of too great contraction. We have a system of State Banks that must have some regulating power somewhere to check them and prevent undue expansions and contractions. The convenience of our people, spreading from the shores of the Atlantic to the Pacific, demand a common currency as much as a common standard of weights and measures, and the government is as much bound to provide the one as the other. As to the question of exchange, that is a matter

that will take care of itself, if the government establishes a national currency and a regulating power to prevent too great expansions by the State Banks. If exchange from state to state can be facilitated without creating the relation of debtor and creditor between the United States and individuals, it would be very desirable. The Sub-treasury plan repudiated all connection with a national currency and exchange, and did not propose to regulate the State Banks. In this it was entirely novel. Without passing any opinion upon a Bank of the United States, the Sub-treasury, or any other financial plan, we propose the following project with a view to a safe substitute for a Bank of the United States:

It is on all hands conceded, that it is the duty of the national government to sustain its credit and a sound uniform currency upon a specie basis. All statesmen agree in this principle, but differ in the mode of effecting this object. A chartered Bank of the United States is useful as a financial agent of the Treasury, as furnishing a general currency and promoting the credit of the nation. It facilitates exchanges also. But experience has shown that the discounting power, by alternate expansion and contraction of the currency by artificial means is dangerous to the security of property. At least it so seems to us.

The Sub-treasury