War Between the Administration

HISTORY OF AMERICAN CURRENCY. 95 WAR BETWEEN THE ADMINISTRATION AND THE UNITED STA TES BANK. In 1832 the bank petitioned for a renewal of its charter which was to expire in 1836. In speaking-in favor of a renewal, Mr. Webster said : "A disordered currency is one of the greatest political evils. It undermines the virtues necessary for the support of the social system, and encourages propensities destructive to its happiness. It wars against industry, frugality, and economy, and it fosters the evil spirits of extravagance and speculation. Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them witn paper money. This is the most effectual of inventions to fertilize the rich man's field by the sweat of the poor man's brow. Ordinary tyranny, oppression, excessive taxation, these bear lightly on the happiness of the mass of the community, compared with fraudulent currencies and the robberies committed by depreciated paper. Our own history has recorded for 96 HISTORY OF AMERICAN CURRENCY.

our instruction enough, and more than enough, of the demoralizing tendency, the injustice, and the intolerable oppression on the virtuous and well disposed, of a degraded paper currency, authorized by law, or any way countenanced by government." The bill passed both Houses, and was vetoed by the President on the ioth July. It being" now evident that the bank must expire unless some influence could be brought to bear to change the President or win two-thirds of Congress, a violent warfare was begun by the bank. The power of its interest at the time is attested by any amount of evidence. Mr. Wm. Gouge published his work on the History of Paper Money in 1833, in which he bears the strong"est testimony to the power of the bank corporations throughout the country. The expressions used now in the West in regard to railroad corporations are not stronger than those used by many writers at the period under review in regard to " banking "—by which they meant the issue and loan of notes nominally convertible but really inconvertible, and thus subject, in their exHISTORY OF AMERICAN CURRENCY. gj pansions and contractions, to nothing but the will of the bankers themselves. It is certain that the banks paid no more heed to the laws of the State than they did to the laws of prudence or of banking science, and that they paid very little heed to either. This veto was the cause of some genuine anxiety and of some manufactured fears in regard to the business future, and played a prominent part in the political canvass of 1832.

Jackson defeated Clay, the latter representing bank, tariff, and internal improvements, by 288 to 49 in the electoral.college. The President, in his message in December, 1832, recommended the sale of the seven millions stock of the United States Bank which was owned by the nation, and the appointment of a committee to investigate its affairs. Bank shares fell from 112 to 104, but on a favorable report by the Treasury agent they recovered to 112. This report showed over seventy-nine millions assets; liabilities, thirty-seven millions ; leaving forty-two millions: thirty-five millions capital, and seven millions surplus. But when the Government desired to pay the three per cents., in July, 1832, 5 98 HISTORY OF AMERICAN CURRENCY. the bank agreed to pay the interest on them until October, if the payment might be delayed so long. It then negotiated a loan of five millions from Barings to make the payments of drafts on government deposits held by it, which would be made to carry out the payment of this stock.