Banks produce the very effect the Constitution intended to prevent by the prohibition. The injustice to individuals, the embarrassments of Government, the depreciation of the currency, its want of uniformity, the moral necessity imposed on the community, either to receive the unsound currency, or to suspend business transactions, all the evils consequent on the suspension of specie payments have been as great, if not greater, than those which might have flowed from a paper currency, issued directly by State authority.

The provisions of the Constitution for the uniformity of taxation are violated when currencies, of different values in the several States, prevail. Upon this ground, alone, Congress would be obliged to provide means for giving effect to these constitutional provisions. The uniformity of taxes of every nature, is an essential and fundamental principle of the Constitution, and our political association. That uniformity depends on the uniformity of the currency. Therefore, laws to effect this, are "necessary and proper," in the strictest sense of the words.

But there are two means, only, to attain the object, a metallic, or a uniform paper, currency. The one may be possible, but it is difficult of attainment, and if attainable, inexpedient; because it involves the destruction of all the State Banks and the established commercial system. The other is prepared to our hands; and we know, from long and various experience, will insure a sound and uniform currency; checking and regulating the greater part which it does not itself supply.

The earliest and principal objection against the constitutionality of a Bank was, that Congress had not power to create corporations. That Congress has a distinct and substantive power to create corporations, without reference to the objects entrusted to its jurisdiction, is a proposition which has never been maintained; but that any one of the powers expressly conferred upon Congress, is subject to the limitation that it shall not be carried into effect, by the agency of a corporation, is a proposition which cannot be supported.

Such are the reasons which have induced the conclusion, that the power to incorporate a Bank is incidental to the powers, of collecting and disbursing the public revenue; of borrowing money on the credit of the United States; of paying the public debt, and above all, of fixing and regulating the standard of value, and thereby ensuring, at least, so far as the medium of payment is concerned, the uniformity and equality of taxation.

384. Upon the question of expediency, a review of the history of the Bank of the United States will shed much light, whilst it exhibits the most respectable authority in favour of its constitutionality.

In little more than two years, after the Government went into operation, when most of the distinguished members of the Federal Convention were either in the Executive or Legislative councils, the act incorporating the first Bank, passed both branches of Congress, and received the deliberate sanction of President Washington. The constitutional power was thoroughly investigated by the Legislative and Executive Departments under circumstances highly favourable to a dispassionate decision. There was then no organization of political parties, and the question was discussed, wholly, upon rational and patriotic considerations, uninfluenced by party prejudice, which, at the present day, has overpowered the true sense of the country. No persons could be more competent to give a just construction to the Constitution, than those who framed it; and no administration could be more exempt from those influences which sometimes pervert the judgment of the wise and patriotic, than that, of the Father of his country, during the first term of his service.

The Bank, thus created, continued for twenty years, the term of its charter; during which, public and private credit was raised, from a prostrate, to a very elevated, condition; and the finances of the nation placed upon the most solid foundations.

When the charter expired in 1811, its renewal was, unhappily, for the country, as subsequent events, too fully, proved, discussed as a party question. At no time, since the commencement of the Government, has there been more violent party excitement than at this period,-the era of the embargo, non-intercourse and other commercial restrictions, and when the stock of the Bank was chiefly holden by British subjects, then standing in unfriendly relations with us, and by their apologists in this country. These circumstances caused it to be looked upon, falsely indeed, almost as a foreign institution; yet, with these obstacles, the proposition for renewal of the charter was lost, only by the casting vote of the President of the Senate, and the majority of a single vote in the House of Representatives.

In less than three years after the expiration of the charter, (the war with Great Britain having been declared) the circulating medium became so disordered, the public finances so

deranged, and the public credit so impaired, that the Secre tary of the Treasury, Mr. Dallas, with the sanction of Mr. Madison, and, as is believed, of every member of the Cabinet recommended the establishment of a national Bank as the only mean, by which the national credit could be revived and the fiscal resources be redeemed from ruinous embarrassment. So obvious, now, was the propriety of this measure, recommended by a democratic administration, that though recently reprobated by the republican party, it was carried through Congress, as a republican measure, by an overwhelming majority of that party. The bill was rejected by Mr. Madison, because it was not such a bill as had been recommended by the Secretary of the Treasury, and because its provisions were not adapted, in the opinion of the Presi dent, to relieve the wants of the country. But he premised his objections to the measure, by "waiving the question of the constitutional authority of the legislature to establish an incorporated Bank, as being precluded, in his opinion, by repeated recognitions, under varied circumstances, of the validity of such an institution, in acts of the legislative, executive and judicial branches of the Government, accompanied by indications, in different modes of the concurrence of the general will of the nation."

At the succeeding session the Bank was incorporated by a large majority of Congress, with the sanction of the President. Unhappily, it fell, at first, into hands incompetent to conduct it. But as an agent of the Government it was always efficient. For thirty-eight out of forty-four, years, the Government has had the advantage of this fiscal agent, whose faithfulness has received, as it merits, the praise of all whom party prejudice has not swayed. In its present condition, it is the soundest, safest money institution in the world, and it would seem, that to whatever proper use the Government might wish to apply it, a more effective agent could not be devised.

385. Still it is charged, that the existence of the Bank is inexpedient. It is averred by President Jackson, its great enemy and persecutor, that, it has "failed, in the great end of establishing a uniform and sound currency."

If it be true, that the Bank have not established a uniform and sound currency, it has failed to effect the chief object of its creation; and its preservation is a question, comparatively of light consideration. But to judge of this, we must compare the state of the currency at the period, when the Bank

was, chartered, with its condition when the charge was made. We must look at this, as it regards the general depreciation and also as it regards the relative depreciation, or the value at one place compared with another.

386. As to the general depreciation, it appears that during the existence of the first Bank of the United States, we had a sound currency, uniform taxation and stable exchanges. In January, 1811, there were in the United States, including the national Bank, eighty-five Banks; whose capital amounted to fifty-two millions five hundred and ten thousand dollars; notes in circulation to twenty-eight millions; specie fifteen millions. In 1811, we destroyed the Bank and deprived the country of seven millions of capital, which belonged to foreigners: In 1816, in five years, we had two hundred and forty-two State Banks, with a capital of ninety-one millions; notes in circulation, sixty-six and a half millions; and specie nineteen millions. From the report of Mr. Crawford, Secretary of the Treasury, in 1820, it appears, that, during the general suspension of specie payments, by the local Banks, in the years 1815 and 1816, the circulating medium had reached the sum of one hundred and ten millions of dollars; and that, in the year 1819, it had been reduced, to forty-five millions, being a reduction of fifty-nine per cent. in the short period of four years. The effect of the great increase of circulation was to double the price of property, real and personal, when compared with the previous and present value. In other words, two dollars would purchase no more of any commodity in 1816, than one dollar would purchase at any time since 1819: a specie dollar in 1816, would purchase no more than half as much as a paper dollar will at present.

The operation of this general depreciation upon individuals was this. He, who borrowed money in 1816, and repaid it in 1820, paid double the value he had received. The farmer who purchased in the former year 100 acres of land, at 100 dollars the acre, and paid one-half the purchase money, could get for his land, but 50 dollars the acre; and when required to pay, in 1820, could not borrow thereon a dollar, the balance of the purchase money being the full value of the land, which when sold, by the sheriff, was re-bought by the purchaser, for that balance; who, thereby, obtained the land, and a clear profit of 5,000 dollars, with the interest, perhaps, on the whole purchase money, whilst the farmer was irretrievably ruined. This was the history of thousands of the most industrious and economical members of the community.

The injury to the public was much in the same ratio. The Government borrowed, during the war, eighty-eight millions of dollars, at an average discount of 15 per cent.—giving stock for eighty-eight millions, and receiving sixty-eight millions, in such Bank paper as could be obtained. In this statement Treasury notes are considered as stock, at 20 per cent. discount. There was, here, obviously, a loss of twelve millions. But, the sum of sixty-eight millions was paid in depreciated currency, not more than half as valuable as that in which the stock has been redeemed. Hence, another loss of thirty-four millions, resulting, incontestibly, and exclusively, from the depreciation of the currency, and making, with the sum lost by discount, forty-six millions. The only persons who profited by this state of things, were the brokers, money changers or bankers, who obtained a gain equal to the loss of the Government. To this sum, we must add the loss sustained by the United States from broken Banks, alone; amounting, between 1816 and 1819, to a million and a half of dollars.

A great loss, however, resulted from the relative depreciation of paper, at different places; which, with loss of general credit, was sustained by the community in commercial exchanges. During the years 1915 and 1816, the exchange between our different cities varied from 5 to 25 per cent.; the ordinary premium for specie being from 10 to 20 per cent. The amount of our domestic exchanges might even then be estimated at not less than two hundred millions of dollars per annum. If we estimate the difference of exchange paid on these, at only 5 per cent., on an average, the industrious classes were taxed, annually, ten millions, for the benefit of the Banks and brokers.

These effects, and especially their great cause, the suspension of specie payments, would not have happened, at the time, had the Bank of the United States been preserved. The exaggerated increase of the State Banks would not have occurred. That Bank would, as before, have restrained them within proper bounds, and checked their issues; and would have had the earliest notice of the approaching danger. It would have put the Treasury Department upon its guard; acting in concert, they would have retarded the event; and as the treaty of peace was ratified, within less than six months after the suspension took place, the catastrophe would have been altogether avoided.

387. And now to the contrast.

And first, of the soundness and permanency of the currency.