The Middle Period, 1817-1858. John William Burgess
of the financial system of the country.
Mr. Calhoun also declined to discuss the question whether banks were favorable or unfavorable to "public liberty and prosperity." He assumed, here again, that public experience had settled that question, and said that such an inquiry was now purely metaphysical. This statement is certainly prime evidence that the practical experiences, made in conducting the Government under the pressure of war, had about knocked the metaphysics of the year 1800 out of the Republican party, and had led the party on to a much more positive stage of political opinion.
Mr. Calhoun furthermore dismissed the question whether a "national bank would be favorable to the administration of the finances of the Government," since there was not enough doubt, he said, in the public mind upon that point to warrant a discussion of it.
He declared, finally, that the only questions which demanded consideration were those relative to the existing disorders of the currency, and the efficiency of a national bank in working their cure. Upon these two points he was distinct, decided, and thoroughly national. He said that the Constitution had without doubt placed the monetary system of the country entirely within the control of Congress; that the "States" had usurped the power of making money by chartering banks of issue in the face of the constitutional provision forbidding the "States" to emit bills of credit; that the two hundred millions of dollars of irredeemable bank-notes, paper, and credits, issued by these banks, were the cause of the financial disorders of the country; and that the remedy for this condition of things was, in his opinion, to be found in a great specie-paying national bank, sustained by the power of the general Government in the work of bringing such a pressure upon these "State" banks as would force them either to pay specie or go into liquidation. This was clear, generous, and patriotic. No one made a fairer statement of the case, and no one advocated a more national remedy in its treatment.
| Webster's objections to the Bank Bill. |
On the other hand, it was Webster who, at this time, appeared narrow and particularistic. He objected to the large amount of the capital, and to the stock feature of the proposed bank, and expressed alarm at the proposition to place it under such strong governmental control. He thought that the bills and paper of the "State" banks would be good enough, if the general Government would only force them to redeem their currency in specie by refusing to accept for Government dues the bills of banks which did not pay specie on demand.
Whatever may be thought of Webster's attitude from the point of view of political economy, it was certainly, from the point of view of political science, the attitude of a "States'-rights" man rather than that of a nationalist. Webster did not, however, call the constitutionality of the bill in question. That was conceded upon all sides.
The friends of the measure felt more anxiety in regard to Mr. Clay. He had, only five years before, as we have seen, pronounced a similar bill unconstitutional in his opinion, and he was now the Speaker of the House, with all the power over the procedure in the House which that position involved. It was generally felt that the fate of the measure would be largely determined by his attitude toward it.
| Mr. Clay's support of the Bank Bill. |
Mr. Clay did not leave the House long in doubt concerning his views. He quickly revealed and avowed that noted change of opinion upon this subject, which has been commonly accounted one of his greatest inconsistencies, but which may be very properly considered as simply manifesting that growth in patriotism and national spirit experienced by almost all the leading men of the country, outside of New England, in consequence of the vicissitudes of the period of war under which the nation suffered between the dates of Mr. Clay's two utterances. He frankly confessed that he had changed his opinion, and explained the change by saying that the power of Congress in respect to the matter was contained in the clause of the Constitution which conferred upon Congress the authority to make all laws necessary and proper for carrying the powers of the Government into operation; that, in the interpretation of the words "necessary and proper," reference must always be had to existing circumstances; that, when conditions change, the interpretation must be so modified as to meet and satisfy such change; and that the conditions obtaining in the country in 1816 were so changed from those obtaining in 1811 as to require the enlarged interpretation of the powers of Congress under this clause upon the subject of the monetary system of the country.
| Passage of the Bank Bill by the House of Representatives. |
The eloquence and the influence of Mr. Clay counted heavily in favor of the measure, and it was passed by a substantial majority of votes. In fact, the privileges of the proposed Bank had been increased by amendment during the progress of the bill through the House. The Bank and its branches were made the depositories of the funds of the Government. This great advantage was, at least, a substantial offset to the other modifications of the original bill, whereby the clauses requiring that the president of the Bank should always be chosen from among the Government directors, and reserving to Congress the power to permit a temporary suspension of specie payment by the Bank, were stricken out.
| The passage of the Bank Bill through the Senate. |
During the passage of the bill through the Senate only a single Senator expressed any doubts of its constitutionality, Mr. Wells, of Delaware. Mr. Wells did not deny the power of Congress to charter a national bank, but simply contended that the particular Bank proposed in the bill exceeded what was "necessary and proper" for carrying into effect the powers of Congress, and was therefore unconstitutional. On the other hand, Senators Barbour, of Virginia, Taylor, of South Carolina, and Bibb, of Georgia, supported the measure, both in principle and in details, and carried it with a larger relative majority through the Senate than it had received in the House.
| The United States Bank of 1816 a Southern measure. |
The United States Bank of 1816 was thus a Southern measure, and Calhoun was its chief author. It was in principle a great national measure, and its creation by Congress is strong evidence of the great growth in national opinion and sentiment throughout the country, away from the national indifference of the Jeffersonian metapolitics of 1800.
| The Tariff of 1816. |
A review of the Tariff Act of 1816 will bring us to the same conclusions concerning the great nationalizing influence of the War.
The rate of duty upon the principal articles of imported goods was, before the War, twelve and one-half per centum ad valorem. From a rate of five per centum upon these articles, imposed by the first Customs Act, that of July, 1789, the duty had been increased by about a dozen acts, passed by both Federal and Republican Congresses, until, in 1812, it had reached the above-mentioned per centum. Twelve and one-half per centum was, as a fact, nothing more than a revenue duty, and was intended for nothing more by the party in power at that date.
At the outbreak of the War double duties were imposed by the Act of July 1st, 1812, as a war measure, that is, as a measure for obtaining additional revenue for the prosecution of the War. It was not intended as a measure for the protection of manufacturers. This Act was to expire in one year, at the farthest, after the conclusion of peace with England.
The ratifications of the Treaty of Ghent were exchanged on February 17th, 1815. At the meeting of Congress, in December, 1815, the war duties were, therefore, still in force, but the Act establishing them would expire by its own limitation in less than three months. This Congress was obliged, therefore, to deal with the tariff anew.
| The Bill framed by the Committee on Ways and Means. |
The recommendations of the President