SPEECH EPHRAIM BANKS, ESQ. OF MIFFLIN, DELIVERED IN THE CONTENTION, TO AMEND THE CONSTITUTION OF PENNSYLVANIA, DEC EMBER 22, 1837. support of an Amendment to prohibit Banks from issuing Notes of a less denomination than Ten Dollars, as oflered by Mr. Read of Susquehanna. PHILADELPHIA, PRINTED BY JOHN WILBANK, No. % Shoemaker Street* 1837. FOR SALE AT THIS OFFICE PRICE SIX-CENTS. SPEECH Of EPHRAIM BANKS, Esq., of Mifflin, delivered in the Convention, to amend the Constitution of Pennsylvania, December 22, 1837, in support of an Amendment to prohibit Banks from issuing Notes of a less denomination than Ten Dollars. Mr. Banks said he did not rise to ex- press the sentiments of a delegate from the "woods of Susquehanna," or 'the " hills- of Indiana," but of a delegate fronvthe mountains of the Juniata and: he would do* so-plainly and respectfully. His constituents- would think him negli- gent of their interest and' derelict in .duty if he should remain longer silent. The subject, he said, was excitingand imposing, and nothing but a solemn sense of duty could induce him to at- tempt to discuss it, and 1 if he followed the example set by most of those who had gone before him in discussing the pending question he^might discuss ev- ery thing else that he had' heard or thought of. Without any reflection upon the President, he would take- leave to say, that after the fashion of the wisest of men, he in his anxiety " spake of things fromthe stately cedar of Lebanon, to the hyssop that springeth out of the wall." He -was always ready to hear that gentleman on account of his intelli- gence and ability to discuss whatever he undertook, ably if not satisfactorily, but he thought he had rambled in speaking upon this question, more than usual. The same remark might be made re- lative to others without offence, as he trusted, when he assured 1 them there was none intended. They who had given attention to the propensities of the human mind, know full well that it is prone to covetousness that from. the fall of Jerich tothe-pre- sent time; it has caused the destruction of individuals,. families and nations. At the-overthrow of the city of Jericho,. a curse was- denounced against such as would touch or take any of the proper- ty of the-inhabitants, and notwithstand- ing this* covetousness prevailed in the toast of one- man ot the- army of Jo- shua^ and the whole family of that man was cut off and what he had was burnt with fire in the the valley of Achor, for his transgressions. Gold, siver, and a Babylonish garment prevented' the suc- cess^ the Israelitish army for a time caused^ the mourning of the whole na- tion, and the dreadful 1 extermination of Achan. and his family. When Paul preached against the worshipping of false Gods at Ephesus, he was clamored against by those whose business it . af- fected. Demetrius, who, it seems, was most injured in his business by the preaching: of Paul j and the disuse of cer- tain silver shrines, complained excited those who were of the same craft or business, to insurrection, by crying out (as some do now about another institu- tion) " great is Diana of the Ephesians/' By this croft we have our wealth not living, but wealth. He knew it was unpleasant to be told of our misdeeds, and' the instruction of history, sacred: and profane,, is that the reformer of abuses performs for the time, a thankless and unprofitable office. The man who would engage in the work of convincing him that hia moral deportment was not what it should be, improper and vicious as it might be, would probably, according to the expe- rience of the times, be treated with in-' dignty. Whatever interferes with the interest or vicious habits- of men, is likely to induce their indignation, their anger, &c. But be that as it might, he had a duty to perform which had been committed to him, and charged upon, him by his constituents, that he could- not, and that he must not abandon, more especially in this commercial metropolis of this great State. This city, the pride of all of us, as our commercial empo- rium, hut filled with all manner of stock. jobbing and speculation. Surrounded as he was by persons interested one way ond another in Banking institutions, Presidents, cashiers.directors, and stock- holders, and from many of whom he had received respectful and kind atten- tion, he would as mucli as possible avoid all exciting expressions, while he would, at the same time speak plainly against the destructive principles and practices of the present Banking system in Penn- sylvania, and the country. A system which was regarded by many of the best citizens in the Commonwealth as tend- ing to sap the foundations of our free system of government; a system des- tructive of equal rights, and tending to pass the power of the government from the many to the few; a system no better in character than the rotten, borough system of England. Gentlemen, he said, tell us that we who advocate the restrictive system who are favorable to enjoining it upon the legislature to prevent Banks from issuing notes of a less denominatiou than ten dollars, are opposed to com- merce to credit and wish to destroy the Banking institutions of the country. We, he said, deny it. Every speaker on the side of restriction has denied it, and still, gentlemen, insist upon it. Be it so it is preposterous, and he would not trouble the committee with further denial. No, Sir, he said, the friends of this amendment only desire the legisla- ture to be compelled to place ligatures round the banking institutions of the State, so as to prevent expansions and contractions, which may suit the views and interests of speculators, but which are injurious to the morals and interests of the whole people. Gentlemen, said Mr. B. call those who desire reform in the banking system of the State and country, agrarians, loco focos, and all manner of hard names. Sir, he exclaimed, reformers are neither frightened nor injnred by hard names. They have always been spoken of, and treated with indignity, by the nobility and aristocracy of every country. Their fathers of the Revolution, " who fought and bled in freedom's cause, V were called rebels mocked and sneered at by the minions of power ; but they persisted in their resistance of tyranny, and suc- ceeded ; and so will their sons at all times, and in every exigency if they ask for nothing that is not right, and submit to nothing that is wrong. His long tried and fearless friend, from Indiana, (Mr. Clarke,) had been reflected upon severely, for preferring the aristo- cracy of the sword to the aristocracy of money. Gentlemen will recollect, that John Randolph said, when oppos- ing the re-charter of the old United States Bank If I must have aristocracy, let it be that of the epaulette some- thing that I can respect, while I fear ; not the aristocracy which commands and rules with a quill behind the ear ! The idea is the same, and the conclu- sion the same. How could it be, that preventing banks from issuing notes of a less deno- mination than ten dollars, would des- troy them? Gentlemen do not believe it themselves. He asked, did the act of Parliament of 1826, prohibiting the Bank of England from issuing noUs of a less denomination than Jive pounds destroy that institution 1 Did the act of our legislature of 1828-9, prohibit- ing the issuing of notes by the banks of a less denomination than five dollars, destroy, or in the least degree injure the banks or their standing with the people! No, Sir The banks were not injured, and the people, by these acts, obtained and handled gold and siver instead of rags. It is a curious fact connected with this discussion, he said, that while the opponents of reform admit; aye, and are forced to admit, that the present system is defective and ought to be reformed, not one of them has offered a single amendment, but the gentleman from ^Lancaster, (Doct. Cochran) and it is not much more than an apology for an amendment. However small as it was he would take it for so much and hope for more. The conduct of gentlemen reminded him of the conduct of persons, who when talked to about improprieties in relation to their moral conduct, would admit all you alleged against them, and talk of reform; but 'the time the con- venient season, never came. Let them come up to the work like men, and offer their propositions of amendment, and they will then learn who will "toe the mark." This is all his friend from Lu- zerne (Mr. Woodward) intended, when he used the offensive word, coward, in speaking on this subject. He said, he would not follow gentle- men in their rambles after currency all over the world what was it to the committee, to this community, he meant the State, and country if gentlemen preferred an extended view, that shells, and leather, and iron, had been used as currency in one country and another in the world, thiscommmittee has nothing to do with them, or any one of them, as currency. This government, State and general, has to do with but gold, silver, and paper as currency. He would, now, he said, state the ori- gin, rise, and progress of banking, as made known by history, and as known, in the United States, as briefly as he could, from the Bank of Venice to th% Bank of the United States, as it is now in existence not of all the institutions of that kind which had existed, but of some of the leading ones and here he would take leave to say, that he doubt- ed whether this enquiry and discussion would have been introduced, had it not been for the refusal of the re-charter of the U. S. Bank, and the charter as grant- ed subsequently, by the Legislature of Pennsylvania, to the present stockhold- ers of the present Bank of the United States. Gentlemen could judge for themselves, and their constituents judg- ed for themselves, as to the why and the wherefore of the refusal to re-char- ter, and the agreement subsequently to charter the existing institution. They could and would judge of how far poli-* tical considerations and controversy had been carried to prevent the one and cause the other. They could and would judge of, whether or not the late Bank of the United States had attempted to interfere with the Administration of the Government. All have some belief on this subject, and act according to their belief. When 'complaint is made against this institution, the opponents of demo- cracy talk of New York influence. He could say to them, that he was a Penn- sylvanian in every particular, hoped she would always be right, and always suc- cessful The Bank of Venice was establish- lished in 1 171, during the Crusades, and for the purpose of rendering assistance to those expeditions. It was a Bank of deposite only, and strictly a public bank, as the government became responsible for the deposites. The whole capital was in effect, a public loan the funds of the bank being made use of by the government ; and in the early period of the operations of this bank, they were not withdrawn when once deposited; but the depositor had a credit at the bank to the amount deposited; and he used the money so deposited, by trans- ferring this credit to another person in- stead of paying money. Subsequently however, the deposites were allowed to be withdrawn ; for, though the bank cre- dits answered all the purposes of money at Venice, a specie currency was [wanted by persons going abroad, or having payments to make in distant places. This bank continued in opera- tion until the dissolution of the republic in 1798. The Bank of Amsterdam was estab- lished in 1609, and owed its origin to the clipped and worn currency, which being of uncertain and fluctuating value, subjected the exchanges to a corres- ponding fluctuation and uncertainty. The object of the institution was to give a certain and unquestioned value to a bill on Amsterdam ; and for this pur- pose the various coins were received in deposit at the bank at a certain value, according to their weight and fineness, a small deduction being made, equiva- lent to the supposed expense of coin- age into money, of the proper weight and fineness, and the depositor was al- so required to pay a small amount for the privileges of having an account at the bank. In one respect, this bank differed from that of Venice, as the depo- sits were not taken out and used by the government, but remained in the vaults. This was a bank merely of deposite and transfer: neither made loans nor circu- lated bills. The direction of this bank was placed in the hands of four burgomas- ters or aldermen, chosen annually, and no peculation or breach oftrust had ever happened in it. The Bank of Hamburg was estab- lished about ten years after that of Am- sterdam, and like this latter, was a mere bank of deposit and transfer. The de- posfeites being made in coin or bullion, at a certain fixed rate, and liable to be withdrawn by the depositors: anyone having credit at the bank, might draw out the amount of his credit. The bank had not properly any capital of its own; the whole funds being liable to be with- drawn at any moment. The directors of this bank, five in number, were chosen annually, by the whole body of the citizens of Hamburg, having a right to vote for municipal offi- cers. The Bank of England was one of de- posit, discount and circulation. It was chartered in tne reign of William and M-ary, 1693, seventy or eighty years af- ter those of Amsterdam and Hambnrg, and, by an act, among other things, se- cured certain recompenses and advan- tages to such persons as should advance the sum of 1,500,000, towards carry- ing on the war against France. This bank was first chartered for eleven years, and the corporation deno- minated the Governor and Company of the Bank of England. Like that of Ve- nice, and unlike the banks of Amsterdam and Hamburg, this bank was originally an engine of the government, and not a mere commercial establishment. On a capital of eleven millions of pounds, the bank receives interest on between thirty and forty millions, including the interest on the government loans,besides the bonus annually paid by the bank for its agency in the financial concerns. This accounts for the high rate of divi- dends made on the capital stock as above stated, being between two and three times the current rate of interest in Great Britain. Since February, 1829, this bank has not issued notes of a less denomination than 5. The Bank of France was establish- in 1803, by the union of three private banking institutions of Paris. It is strictly a government institu- tion. The capital was in 1807, increas- ed from 45,000,000 to 90,000,000 of francs, and the charter extended to for- ty years. It makes a clear profit to the stockholders of about twenty per cent : issues no small notes, and the great part of the currency of the kingdom is spe- cie. The old bank of the United States was incorporated by an act of Congress passed in February, 1791. By the li- mitation of its charter, it was to expire on the 4th oi March, 1811. This, like the Banks of England, France and Swe- den, was a bank of deposit, discount, and circulation, with a capital of 10,000,- 000. The late bank of the United States was chartered under an act of Congress of April 10, 1816, for twenty years, with a capital of $35,000,000. The stockholders paid to the government a bonus of $1,500,000; and the govern- ment held at the same time one-fifth of the stock. The charter expired on the 4th of march, 1836 Congress refused to re-charter the institution, and the le- gislature of Pennsylvania, by act of As- sembly of February, 1836, allowed it a charter for thirty years, on the condi- tions mentioned and set forth in the act. He deemed it unnecessary to recite the terms and conditions upon which that bank was chartered. He believed they were sufficiently known to the commit- tee and the country, and would not then turn the attention of the committee to them. Nor would he then detain the committee with any remarks of his re- lative to the impropriety of granting the charter of the present barik of the United States, or the repealing power, and the right to exercise it, but would leave these topics for future times, par- ticularly, the last. ' The first he would notice to some extent before he would sit down. He would then turn the attention of the committee to the history of paper money in the colony and State of Penn* sylvania, and the Continental money of the Revolution. The first paper money issued in the colony of Pennsylvania, was issued in 1723. The Province of Pennsylvania made its first experiment of a paper currency in that year. It issued in March fifteen thousand pounds, on such terms as ap- peared likely to be effectual to keep up the credit of the bills. It made no loans but on land security, or plate deposited in the loan office ; obliged the borrowers to pay five per cent ; and made its bills a tender in payment of all debts. The first continental motley was emit- tep by Congress, in 1775; but the notes were not in circulation till the August following. Till the issues extended to nine millions, the bills, according to the testimony of Mr. Jefferson, passed at their nominal value. The depreciation afterwards was very great. In 1781, the continental bills ceased to circulate as money; but they were afterwards bought up on speculation, at various prices, from four hundred to one thou- sand for one. The next, and first by a banking company, was by the Bank of North America. Then followed the Bank of Pennyl vania, in 1791, and with the avow- ed object of, as all the friends of the paper system has always been, aiding and faci- litating commercial transactions. And where is the man, he asked, that would allow his money to lie in bank at six per cent, whilst engaged in trade and commerce] He must either have more than six per cent, per annum for it, or he would, knowing that he could make more by it, risk it in trade or commerce. And here, he .would take leave to re- mark that much as the people of this coun- try, loved their institutions, civil and reli- gious, if, they are ever impaired, ever sap- ped, and undermined the train will be laid in commerce. The desire to buy and sell, in view of gain, sets at nought all municipal regulations; and certainly in many correct moral feeling and ac- tion. An old friend of his, and who was a member of Congress during the orreat battle about the tariff, in perhaps, 1 824, had said to him, being a friend of the tariff system, and now battling it stoutly on the whig side, mpolitics, that if ever the liberties of this country should be destroyed, it would be by lux- ury introduced through the instrumen- tality of commerce. He, Mr. B., then instanced the fact of the continued trade in British manufactured toys, or images, made of silver, brass, and other metals, with the Hindoos in India ; while Bible societies, and Missionary societies, were exerting themselves to convert them to the truths of the Christian religion. Let the love of gain be the master passion with any man, or set of men, and it swal- lows up every thing else that is valuable. He then proceeded to show, that the destruction of the cities of Greece the government Itself and the government of every county which had risen and fallen, had so risen and fallen from lux- urious and voluptuous living introdu- ced by commerce. The Persians, he said, could never have succeeded in the overthrow of the Greecian government, if it had not been for their gold, their cur- rency, if gentlemen preferred the word currency, and consequent effiminency among the Greeks. History, he said, informs us, that Persian gold accom- plished, in the destruction of Greece, what Persian steel could not and so it had been, and in his opinion would be, to the end of time. It was attempted to distinguish be- tween the gold and the paper system of this country; but none can tell what may be effected in the destructoin of our liberties by ihe paper system, as it exists at present in this country, with foreign gold for its basis. The government of Sparta, as found- ed by Lycurgus, and one of the most enduring, was founded upon the purest principles, of liberty, industry, temperance, patience, virtue, justice,' and valor. It taught the most sovreign contempt of riches, idleness, luxury, ef- feminency, cowardice, and sloth ; alike disclaimed the principles of ambition, and conquest ; was sanctioned by the oracle of Delphos rendered permanent by an oath of his country, to maintain the constitution in his absence, until he should return ; sealed by his voluntary banishment and death; continued in successful operation about five hundred years j enabled Sparta to triumph over Athens in the Peleponesian war, and' became the arbiter of Greece. All Sparta was one great school ; and the maxims of his government were the fundamental principles of education. Rational knowledge formed the wisdom of Sparta. The difference of character between the Athenians and Spartans, was such as is common to states which are agri- cultural and commercial. Sparta was agricultural Athens commercial; the seat of the muses and the arts. Solon, as the chief magistrate, or Archon of Athens, attempted to reform her govern- ment, and reduce it to a practical sys- tem but failed. He lived to see it overthrown and destroyed. Leaving Athens under the dominion of the ty rant, Pisistratus. He would then read some extracts from a work on Banking, as written and published by a gentleman of the name of GOUGE, whom he knew nothing of 'personally ; but judging from the work he held in his hand, on the snb- ject mentioned, he must be a man of intelligence, and treated it as though he was acquainted with it. On the ways and means of obtaining acts of incor- poration for bank charters, he says; * When a bill was under considera- tion in the year 1828, to renew the charter of the New York State Bank, General Root, then Speaker of the Senate of that commonwealth, made the following statement :" " This Bank was," he said, " charter- ed in 1803, whoever the original appli- cants, and whatever the representations made to the country members, it is not necessary to state ; at all events, it was to be a State Bank, and a democratic one. I was urged to be a subscriber to the Bank; it was said the shares were to be scattered over the State, and the members of the Legislature were to have shares. It was one of the most open, bare-faced acts of bribery that can be imagined. I was induced to sub- scribe; but I lost all the shares, t>ut a few; they said they had lost the sub- scription paper, or some such thing. I afterwards had the offer of script for eight shares. I would not take it ; so' they took them to themselves as I sup- pose." " In 1816, Mr. Hopkinson, of Phila- delphia, had the boldness to declare, in Congress, that he considered the litter of banks lately created in Pennsylvania, as the offspring of private speculation and legislative fraud." Here, Mr. B. remarked, that the hon- orable gentleman, now one of delegates from the city, is the same who made the statement quoted and now advocating for the banks. " To get a majority to vote- for a new- bank, is, in some instances, no difficult undertaking. In Pennsylvania, there is a mode of running bills through both Houses, kncwn technically as " log-roll- ing." In this way it may chance that fifty or a hundred bills are passed in the course of a session ; each of which, if suffered to rest on its own merit, would have been rejected. " Many members, of the legislature, are averse to this practice ; but many c f them are reluctantly brought into it, by the refusal of the " log-rolling" mem- bers to vote for good public bills, unless their own private bills are passed at the same time !" Mr. Banks, then remarked, that the experience of every gentleman in the committee, who had been a member of the legislature, would enable him to judge whether this statement was or was not correct he would 1 leave gentlemen to their own reflections and conclusions. Mr. B. then said; he would turn to the remarks of this writer upon the subject of the advantages which this banking system gives to some men over others. He would be as brief as possible to be understood. " To test the banking principles fairly. Suppose a county to contain a thousand families, of ten persons each, and each family to be worth five thousand dollars; the tenth of this wealth, or five hundred dollars, for each family, we will suppose to be in jsilver money -the rest is in land, houses, and various commodities. The state of credit in this county is as sound as the state of the currency. The- distribution of wealth is left to natural laws. The production and acquisition of riches are never separated, Every man enjoys what he produces, and what he saves ; and no man enjoys what is produced, or what is saved by another. We will suppose the income of this com- munity to be one million of dollars, or one thousand dollars a year for each fa- mily, and that seven hundred thousand dollars of this aggregate income, is de- rived from industry, and the rest from capital profits, being at the rate of six per cent. In this county are ten men of a speculative turn of mind, who grow tired of working and saving, and wish to grow rich in some more easy way. They apply to the legislature for a char- ter for a bank, with a nominal capital of one hundred thousand dodllars, di- vided into one thousand shares, of one hundred dollars each; and their prayer is granted. It is provided in the char- ter that, as soon as five dollars shall be paid on each share, the bank shall com- mence operations. The payment of the other instalments is, according to the custom in Pennsylvania, left to the dis- cretion of the directors." " The business of banking is now in this county, and as none clearly under- stands its operation but the ten specu- lators, they subscribe for the whole of the stock, or for one hundred shares, each." "The Bank then commences business, and issues notes to the amount of twen- ty-five thousand dollars. By the contri- trivance of " convertibility," and by another contrivance, by which they are made receivable in payment of the dues to the government, the notes become current. The notes are borrowed by the speculators. Each speculator has then, two thousand five hundred dollars at command, instead of five hundred. It is true, he pays interest to the bank as a borrower; but he receives the same Interest back as a stockholder. Thus it is evident, that the equality of wealth is destroyed." "The possession of a moneyed capital, so much greater than that of his neigh- bors, will give him advantages in trade, equal to double the amount of interest. But estimating his advantages, as equal only to six per cent : his annu*al income is increased from one thousand dollars to one thousand one hundred and twen- ty. His five huudred dollars, which for- merly yielded him but thirty dollars in a year, are now, by their conversion in- to bank stock, made to yield him one hundred and fifty; for each metallic dol- lar is, by this contrivance, made to pro- duce as much as five did formerly." " this is only the first operations of the bank. Some of the families of the county, deposite their silver in the vaults of the bank for safe keeping. Other fa- milies, finding that bank notes serve all the purposes of domestic trade. This creates a new demand for bank notes as a circulating medium. In time, the bank finds that its permanent deposites of sil- ver, afe not liable to be reduced beyond a certain amount, and to increase its pro- fits, it lends siver to those who export it." ** The time has now come, in which the speculators may sell a part of the whole stock; They may, with safety, dispose of seven hundred and fifty shares, to- widows and orphans, and lit- erary and charitable institutions, for these mill never interfere ivith bank ma- nagement" This, Mr. B. exclaimed, is the way and manner hi which the stock passes to the widows and orphans which the committee had heard of, by the Presi- dent and other gentlemen. Did any one ever hear of their having to do with institutions of the kind in the first instance 1 Did you, Mr. Chairman, ever find them struggling at sales for bank stock. No, sir, said Mr. B. nor never would. It had been his fortune to witness the sales of the stock of the Western Bank of Philadelphia' and of the Girard Bank, and he had no hesitation in saying that, more outrageous scenes of straggling and strife for money power, could not have been committed. Clothes were torn, heads were broken, and every outrage upon quiet and orderly conduct prac- tised, that the love of money -could in- duce; and that too, in the midst of this city ot brotherly love. Gentlemen, after 10 what he had seen in the instances men- ed abroad for commodities useful in the tioned, might save themselves the trou- arts, or for household consumption." ble of telliug him, that such mob-like But it is not true, that silver money conduct was for the public good alone, produces nothing. It is as productive or mere six per cent intererest. But as any other labor-saving machine. Its the gentleman from Crawford, (Mr. Far. uses in commerce are as great as the relly) says it is right and fair -enough steam engine in manufactures, for a man to engage in banking in view Neither is it true that the aggregate of making the most of his money. Fair capital of the country is increased, enough, when he, as an individual can- when silver coin is displaced by bank not make more than six percent, be- notes. A mere exchange is made of one cause the law against usury, prevents capital for another. The precious me- him on loaning it to take more, to en- tals are exported, and laces, wines, silks, gage in banking, hat he may make six* sattins, and ostrich feathers are received teen or eighteen per cent ! in return. A nation that carries its The arguments of other gentlemen consumption of foreign luxuries so far, lead to the same conclusion, although as to leave itself without a suitable me- they have spoken more cautiously. dium for domestic exchanges, may be He would now, he said, request the compared to a mechanic who barters attention of the committee to what this the tools of his trade for the enjoyments writer has answered to this question, of the alehouse. Money is the to'ol of all Is paper money cheaper than specie ? trades. " The events of the last thirty years " Every man desires money, because have created a suspicion in most men's he can there with- procure whatever else minds, that there is something not ex- he desires. If paper can procure for actly right in our banking system. In- him the object of his desire as readily as deed, the very head of the system, the gold and silver, paper is as desirable to President of the United States Bank, him as gold and silver. The Bank, seems to be a sceptic as to its utility, therefore, finds borrowers for all the He acknowledges that it is attended coin it l?as to lend, and all the paper it with great danger ; but then he says, deems it safe to issue. This addition of * the substitution of credit for coin eria- notes to the amount of metallic money bles the nation to make its exchanges previously in circulation, raises first the with less coin, and of course saves the prices of some articles and then of expense of that coin." ' others. The borrower from the Bank Mr. Gallatin, who is now President of having more money, -either paper or the National Bank, at New York, goes coin, at command, can offer an addi- stiil farther : tional price for the object of his desire, "The paper currency for the precions or perhaps procure some desirable ob- metals, does not," he says, " appear to ject that was before unattainable. He be attended with any substantial advan- from whom the borrower has bought, tages in cheapness." having made a speedier sale, or perhaps Bank notes, it must be confessed, received a higher price than would oth- come very cheap to those who issue erwise have been possible he also has them. But to those who receive them, it in his power to obtain some object bank notes come as dear as gold and of desire that was not before within his silver. reach. A third, a fourth, a fifth, a sixth, The farmer must give as much of the each in his turn, derives a like ad van- product of his labor for a paper dollar tage from this increase of circulating as for a silver dollar. medium. The rise of prices is confined " It is alleged by some, that bank for a time to store goods, but it at length notes increase the aggregate capital of reaches real estate, and finally the wa- the cmmunity, since they cause silver, ges of labor. Industry is stimulated, which produces nothing, to be exchang- and enterprise encouraged. Specula- tion is excited, private [credit is strain- >ed, and the representatives of private rapidly as they had before risen. The -credit are multipled. Every body is ac- traders find that the goods in their stores tive, an,d all branches of business ap- cannot be disposed of, unless at a loss." .pear .td* be prosperous. "The different members of society had " Nothing could be prettier than this, entered into obligations proportionate to if prices could be kept continually rising, the amount of circulating medium in the But it is unfortunately,,only while the days of Banking prosperity. The quan- amount of Bank issues as actually in- tity of circulating medium is diminished, creasing, or for a short time after they and they have not the means of dis- have attained their maximum, tiiat so- charging their obligations. The mer- ciety derives this apparent benefit from chandise, the farms, the houses, for paper money. In due time the paper which they contracted debts, may be affects all articles in nearly equal proper- still in their possession 4 but the product tions ; arid men then discover that for of the farms wiil not bring, perhaps half .an object of desire for which they had as much as will pay the interest of the formerly to give one dollar, they have original .purchase money ; the houses now. to give one dollar twenty-five cents, will not rent for as much as will pay the or one dollar fifty ; and that it is not interest on the mortgages; and the store more easy to get the one dollar and fif- goods must, if sold at all, be sold below ty cents to make the purchase with, than prime cost. Bills of exchange are dis- it was formerly to get one dollar. The honored, and promissory notes protest- value of land, labor, and commodities, -ed. One man is unable to pay his debts, as compared with one another, is the His creditor depended on him for the same as it was before. It is only the means of paying a third person to whom money price that is enhanced. The ef- he is himself .indebted. The circle ex* feet this has on public prosperity, is tends through society. Multitudes be- much the same as that which would be come bankrupt, and a few successful produced by changing accounts from speculators get possession of the earn- pounds, shillings, and pence, to federal ings and savings of many of their frugal money. The sum total of dollars and industrious neighbors." would exceed that of pounds, but the "By the reduction of the amount of articles of the value of which they Bank medium, the prices of things are would be the exponents, would be un- lowered, the importation of some kinds altered in number and in Duality." of foreign goods is diminished, and spe- "It would be well if the issues of the eie is brought back. Then the confi- Banks had no other effect than that of dence of the Banks is renewed, and apparently increasing the wealth of they recommence their issue of paper, the community, by raising the money Prices are raised again, and speculation valuation of all kinds of property. But is excited anew. But prices soon un- these institutions do not continue their dergo another fall, and the temporary issues long, before they raise the price and artificial prosperity is followed by of some commodities above the price real and severe adversity/' they bear in foreign countries, added to "Such, as has truly been said by Mr. the costs of importation. In foreign Biddle, the President of the United countries the paper of the. Banks will States Bank" such is the circle which not pass current. The holders of it, a mixed currency is always describing." therefore, present it for payment. The He, Mr. B. then touched upon the Banks finding their paper returned, fear general effects of the present system of they will be drained of coin, and call banking, and on that subject, the author npon their debtors to pay what has been of the work, from which he had quoted, advanced to them. In two ways, then, expressed himself in the following Ian- is the quantity of circulating medium guage : diminished : fii st, by the exportation of "The rise of prices that follows an ex- specie : secondly, by the withdrawal of pansion of bank medium, and the fall paper from circulation. Prices fall as that, follows a contraction, do not affect all descriptions of labor and commodi- ties at the same time in an equal de- gree. The usual effect of an increase of issues, appears to be to raise still higher those articles which are rising from some natural cause ; and the effect of a contraction, to sink still lower those which are falling from some natural cause. Malthus has observed, the ten- dency of paper money, is in some in- stances, to sink prices to their lowest, and raise them in others to the highest point. Of rise of prices produced by expansions of Bank issues, we had striking examples in 1825 and 1831, and melancholy proofs of contraction in 1820." Wages appear to be among the last things that are raised by an increase of bank medium. The working man finds all the articles he uses in his family ris- ing in prices, while the money rate of his own wages remains unchanged. In the year 1831, which was a year of great expansion, rents rose enormously in many parts ; store goods advanced in price; and such fresh provisions as are sold in the market, were higher than they had been at any time since the re- sumption of specie payments after the suspension; since the war of 1812; but the money rate of wages was hardly affected. Suspensions and resumptions of spe- cie payments only make the effects of contraction and expansion more ob- vious. The money of the country is paper money now, as it was in US 15 and 1816. Its countibilrty finds limits on its expansion ; but frequent contrac- tions are necessary to keep it countible; and expansions and contractions are followed by very pernicious consequen- ces. As in the case of all public evils, the system leans with most hardship upon the poor. The rate of wages is, as we have seen, the last thing affected by an expansion; and one necessary conse- quence of a contraction, is to deprive some men of employment. If a rich man cannot sell his merchandise to-day he can sell it to-morrow ; and if he can- not sell it for full price, he can sell it for halprice. But labor is the poor man's only commodity. If he cannot sell ft to-day, it is lost to him forever. These are the influences, said Mr. B.; these expansions and contractions, which the friends of the amendment pro- posed by his friend from Fayette (Mr. Fuller, are anxious to prevent. They do not prefer any system which will, like the bed of Procustus, extend their business transactions, or contract them at pleasure for the advantage of specu- lators. The author quoted from, further says, said Mr. B. " If the speculator is a bank director, or a favorite with bank directors, happy is his lot. Is there a scarcity of money 1 It affects him not. Money is made more scarce with other men, that it may be made plenty in his- pockets. Whatever may be the condi- tion of others, he is in no danger, but is benefited. In the language of the report of a committee of the New York legislature, made in 1818, he, Mr. B. would add, " Of all aristocracies none more com- pletely enslave a people than that of money; and no system was ever better devised so perfectly to enslave a com- munity as that of the present mode of conducting banking establishments. Like the syren of the fable, they entice to destroy. They hold the purse-strings of society; and by monopolising the whole of the circulating- medium of the country, they form a precarious stan- dard, by which all property in the coun- try, houses, lands, debts and credits, personal and real estates, of all descrip- tions, are valued ; thus rendering the whole community dependent on them." And Mr. Jefferson has, on this subject of banking institutions, remarked : " They have taken deep root in the hearts of those from which ourlegislatoi & are taken, and the sop to Cerberus, from fable, has become history. That^aper money has some advantages mist be admitted ; but its abuses are also inevi- table, and makes a lottery of all private property.' 1 General Washington, in 1780, in a letter to a friend, writes as follows, rela- tive to the avarice of speculators, &c. Friends and foes seem now to com- bine to pull down the goodly fabric we have been raising at the expense of so much time, blood, and treasure ; and unless the body politic will exert them- selves to bring things back to first prin- ciples, correct abuses, and punish our uiternalfoes, inevitable ruin must follow. Indeed, we seem to be verging so fast to destruction, that I am filled with sen- sations to which I have been a stranger until these three months. Our enemies behold with exultation and joy how ef- fectually we labor for their benefit, and from being in a state of absolute des- pair, and on the point of evacuating America, are now on tiptoe. Nothing therefore, in my judgment, can save us, but a total reformation in our own con- duct, or some decisive turn of affairs in Europe. The former, alas ! to our shame be it spoken, is less likely to happen than the latter as it is now consistent with the views of speculators, and the va- rious tribes of money makers and stock- jobbers, of all denominations, to conti- nue the means of their own private emoluments, without considering that this avarice and thirst for gain, must plunge all, including themselves, in one common ruin." Having now said something of the origin and progress of banking the danger of the influence of money upon community and government, and the apprehension many good men had, that the liberty of this country would be jeoparded, undermined, and destroyed through the instrumentality of commer- cial intercourse, and the late United States Bank, he, Mr, B. would, as briefly as he could, speak of the chartering of the present United States Bank ; and in doing so, he desired gentlemen to un- derstand, that he would not willingly wound the feelings of any. It was not in his composition to wantonly insult any man or set of men ; but having a duty to perform in this matter for his constituents, he must discharge it and take the consequences. If the Bank Presidents, Cashiers, Di- rectors, Stockholders and others, who might hear him, should set upon him, as certain officers of the army did upon John Randolph of Roanoke, after hav- ing called them in debate, and while Congress sat in this city, Ragamuffins, he must speak what he believed to be the opinions and will of his constituents. The President of the Convention has spoken of " war to the knife." Does he remember, that the wise and good Nathaniel Macon, saved Mr Randolph from personal injury, by presenting him- self as his friend, with no other weapon than a common pen knife. Another, a larger and a better knife was, on this ac- count, afterwards, presented by Mr. Randolph to Mr. Macon, and subse- quently, the same knife was given by Mr. Macon to the fearless Col. Benton. So much for the knives. However unwilling gentlemen might be to hear it, he must, in the language of the gentleman from Luzerne, (Mr. Woodward) say, the act of assembly, authorizing the charter, carrp upon the people " like a clap of thunder from a clear sky;" and although the gentleman from Indiana, (Mr. Clarke) had been se- verely rebuked, for using the word in- decent, in reference to the haste with which the act was passed, he would take leave to say, that in the opinion of his constituents and his own opinion, it was so passed. The gentleman from Indiana, had, he supposed, used the word in a comparative sense. And if the time usually required for a bill to pass in the legislature, is the decent time, then the act of incorporation for the United States Bank, was passed with indecent haste. No bill incorporating a turnpike road company, bridge, insurance, or other company, that he had any knowledge of, ever was passed in such haste. Gentlemen may complain when they hear bribery and corruption intimated or alleged against certain Senators. He would not say, thit either senators or representatives were guilty of either of these things it was not necessary on this occasion, that he should ; but he would say, that many of his constituents, and many of the people of the State, believed there was something improper something savoring of fraud practised upon them by the passing of the act of February, 1836, authorising the char- ter of the United* States Bank: They monster, and' well it migHt being the are jealous of their rights, and rightly production of a most unnatural union so. Our constituents,- he said, are so of to say nothing of perfidy a union of us. I wish gentlemen, to remember, fragments of parties, as essentially dif- that "love is strong as death, and jea- ferent as vinegar and oil of substan- lousy cruel as the grave." ces repulsive as the elements of fire and It was this idea which caused the edi- water, and yet attracted, when a corn- tor of a newspaper in< Bedford: county, mon object was to be gained, even in and the organ of a portion of the peo- the production* of a monster. It was a pie of that county, tfo publish that> un- law of nature, that monsters never pro- less the people of the State would get duced their like, and' such another relief from the oppression of this insti- would not soon appear in Pennsylva- 'tutionjthey " would raze it to the ground, nia. and strew salt upon its foundation." The- illustration given by his friend Let gentlemen turn to the act itself from Susquehanna- (Mr. Read) for the and after noticing the appropriations purpose of satisfying the committee of made for one object and another a the impropriety, on* sound moral princi* turnpike road here, a rail road there, ples>of the suspension of specie pay- a bridge in one place, and a> branch of ments by the banks, in the month of the United States bank in another, and May last was^ in his opinion, conclusive, tell him whether there was any thing He had learned, that when driven to4he " passing strange;" or wonderful, in the wall, and no room or way left to escape, suspicions of the public. even homicide might be justified. But Sir, said Mr. B. suspicion is fastened to allege that the suspending banks had upon them (the- actors in that drama) as money in abundance to satisfy their they fastened the Bank of the United creditors, and yet refuse to-do so, was, States upon the Commonwealth ;; and in the estimation of the uninitiated, what like the shirt of Nessus, .it cannot be -re- in individual transactions, .would be con- moved; without tearing the flesh ! demned* It was scarcely necessary to occupy It was, he said, painful to contend the time of the committee in rehearsing with gentlemen on a subject of this the belief of many of his constituents character a> subject involving every and others in the State, that stock of the thing dear in civilization and which, if Bank was purchased during 1 the pending the principles contended for here, should question in the legislature, at depressed be carried out into all the- relations of prices \ and which,, after the char- life, as it might be, would unhinge socie- ter was allowed, was sold at twenty to ty, and cause the destruction of corn- thirty per cent, advance aye, and by merce, credit, and every institution in certain Senators-, who*, it was supposed, the State and country. He hoped for had sworn upon the altar of their coun- better things, and would never despair try, never to aid, by word or action, in of the Republic. the passage of such an act. He knew When the question relative to repeal- tbey endeavored to excuse themselves, ing bank and. other acts of incorpora- by asserting, that the condition of the tlon should.be reached^ he, Mr-. B. would, finances^f the State required the with- if he had the opportunity, take occasion drawal of their hostility, and moreover, to speak more at large on this -subject, their aid in the project. And he knew it was an important one. also, that it had been said, "necessity He hadimuch to w | ien another of the hundred motions and human improvement must and will acquire to adjourn was made. The rule of the Conven- addiiionann^inifconward march by.hede- tondoes nota^the ^and -^onon* tection and public exposure of the sneaking, sims- S[Q ^ which afe gaid to have been suspe cted sev- stermeannesses,andSerintisnw of its opponents. 0ra i mem bers of the Convention had called WPFORM POIWFNTION throughout the evening for tellers, which had been appointed by the chair, butm this latter m- It will be seen by our report of the proceedings gtance tney we re refused, and the President said of this body, that an amendment restricting the he wou.d decide for himself, and declared that Legislature on the subject of Bank charters has there were 55 f or the adjournment and 53 against been passed by a vote of 8G to 29. j t 'Phe reformers to a man stood in their places The conservatives had voted down a nnmber ^^ denied the correctness of the decision re- of amendments of a similar character, by a ma- f used to adjourn, and appealed from the chair, jority of one or two votes in consequence of the At t ^ s determined ppposition the President turn- absence of as many of the friends of reform, dur- cd ^^ and attempted to force his decision; but ing Thursday and Friday morning,, but on Fn- fl nding his friends did not back him, he gave way, day afternoon the latter came in, and it was and ap p i n t e d tellers, who returned 54 for the found that a majority of the Convention were de- mot i on and 61 against it ! So much for the great termined to carry the subject through. Then j o hn Sergeant to whom it was reserved to at- commenced a course of action on the part of the tem p t to defeat the popular will, by prostituting conservatives, that fully showed their reckless- hig p Ower as presiding officer to what would ness of principle. Every means was tried to seem to De an open palpable and proved fraud!! frighten the friends of reform to coax them by We cannot c i os e this article without doing jus- offers of compromise to. weary them out by long tice to the mem bers of the democratic party, who speeches, filled with inflammatory attacks, made Qn thig occas i on acte d witn a noble forbearance and only to provoke replies and cause, delay mo- perseve rance that does them honor. Only one lions to postpone calls of the previous question, deserter was found D.M. Farrelly of Crawford : and motions to adjourn. All this was kept up J.M. Porter voted with the conservatives occa- until one o'clock in the morning, when the vote sionaliy ; Mr. Fry of Lehigh, once by mistake ; but was taken, and after all their opposition, many of lhege losses were more than made up by the un- the conservatives voted for it, finding it would filching firmness and devotion to honest princi- pass. pies of Hiester of Lancaster, McDowell of Bucks, During the afternoon and early part of the even- &nd Se i tzer o f Lebanon, whom neither party smiles ing, Messrs. Hopkinson, Meredith, Scott, andoth- could geduce nor p arty frowns intimidate from ers, tried every means in their power to deleat doil)cr what they considerd their duty. Purviance the proposed amendment. Then Dickey came O f B^ t i er) and gturdevantof Luzerne voted gen- to the charge with his "legislative tact"^ at the era ji y w i t h the reformers, and Merkel of Cumber- previous question, and " postponement." Dun- land ren( jered the cause some aid when it was lop brought up his light troop of "motions" and mogt needed> The County members, all but Mr. "speeches" that would have gained him great a"p- But i er> w ho has been absent for some time by plause as the clown of a circus, but which were i nd i spos i t ion, were all in their places, and votec suffered to pass in the Convention without even &g Qne man throughout for reform; the Citj a laugh. Cox, with the vanguard, entered the membera all against it. field at near eleven o clock, and regaled a few ft- jx tf r