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12
Old Bank of United States in New Form
Undor anothor form tho old, old
auosUon of tho Dank of tho Unit
BtatOB, which was fought out by An
drow Jackson whllo ho was presidont,
is now boforo tho American pooplo
1 again. This timo it is called tho
j "Rosorvo Association of America,"
, but it is to bo charted by tho United
Statos government, and is to bo tho
fiscal agent of tho government. Tho
torritory of tho Unitod States is to bo
divided into flftoon districts, each
district to includo all tho national
banks in its precincts. Nono but na
tional banks are to bo allowed to
subscribo to tho capital stock of tho
association,
Right In tho convention which for
mulated and adopted tho constitu
tion of tho United, States was tho
struggle begun. A' section of tho
constitution as originally introduced
provided that tho United States gov
ernment should have power "to bor
row money and omit bills." In
stantly there was opposition, and
after long dobato, on motion of
Gouvornour Morris, the clause "and
to omit bills" was stricken out by a
vote of nine states to two.
"Tho framors of tho constitution
novor moant that there should over
bo paper monoy again," says W. L.
Itoyall in his account of tho proceed
ings. "Thoy had seen its curso,
when $100 would not buy a bushel
of moal."
But although tho framors of tho
constitution killed tho provision
which would havo allowed the gov
ernment to issue paper money,
thoy forgot to prohibit tho char-i
torlng of corporations which might
issue paper. So it waB that in
1790 Alexander Hamilton, then
secretary of tho treasury, drew a plan
for tho first "Bank of tho Unitod
Statos."
This bank was permitted to issue
papor monoy in this proportion of
$3 papor socured by $1 of real coin.
"This provision," says Royall, "con
tains tho germ of all tho vices and
errors of paper money."
But congress granted tho chaTter,
running for twenty years, with a cap
ital of $10,000,000. And tho very
firBt legislation that congress passed
thereafter gave tho bank an undue
advantage, for it fixed, arbitrarily,
the ratio of gold and silver at 15 to
1, which was an undervaluation of
gold. The immediate result was the
retirement of gold from circulation,
and tho substitution of paper for it.
Not content with this, the bank had
further laws passed declaring that
foreign subsidiary coin was no longer
legal tender. As the government had
not yet coined any small money, it
followed that Bmall paper bills also
took tho placo of small coins.
Tho bank prospered, of course, but
peoplo wero doubtful of it, and in
1811, when its charter expired, con
gress by a vote of tho vice president
to decide a tie in the senate, refused
to renew its charter. But its ex
ample had been noted by lesser
financiers, and stato banks sprang up
all over tho country, which were per
mitted to issue paper money, with
slight security. And of course the
people learned, after a tlmo, that they
had Issued a great deal moro paper
than they had coin to redeem, and
began to demand real money. And
again, of course, the banks had to
suspend specie payments.
But in 1816 congress had been
brought round again to the point of
chartering another big central bank.
It granted a lease of life for twenty
years to tho second Bank of the
United States, with a capital of
$35,000,000, and the power to estab
lish a branch in each stato whoso
legislature asked for it. Two of the
The Commoner.
twonty-flvO directors wero appointed
- S'tho S
orninont woro deposited In the bank.
These largo deposits, of course,
earned dividends, specio payments
wero resumed, and apparently
tho
country was prosperous.
Androw Jackson was elected presi
dent in 1828. Ho had always been
opposed to tho principle of the bank,
and his opposition became open from
tho day of his inauguration. In his
very first message to congress ho
called attention to tho fact that the
bank's charter would expire in a few
years more, and suggested that a re
newal bo refused, for tho reason that
it was "noxious In all its principles
and tendencies."
Instantly tho bank entered poli
tics, and began the struggle which
embittered Jackson's whole adminis
tration. As a shrewd political stroke
the bank applied for a renewal of its
charter in 1832, on the eve of the
presidential election, to force Jack
son either to sign the charter or,
vetoing it, bring on him condemna
tion which would defeat him for re
election. Jackson accepted the challenge
and vetoed the. bill as soon as it
reached him. There was a great out
cry by the bank and the "interests,"
but tho people had learned to trust
"Old Hickory," and he was re
elected. Tho two government members of
tho bank's directorate reported to the
president that it was a mere politi
cal machine trying to control elec
tions, and had gone to the length
of placing its funds at the disposal
of the bank's president to sustain its
political power, and was trying to
start a panic by withholding accom-i
moaations and holding gold from
circulation. It was on this that
Jackson based his famous veto mes
sage, part of which reads:
"Is thero no danger to our liberty
and independence in a bank that in
its nature has so little to bind it to
our country. (One-third of its stock
was hold abroad.) The president of
the bank has told me that moat nf
the state banks exist by its forbear
ance. Should its influence become
concentered in the hnnriR nf n
self-elected directory whose interests
are identified with those of foreign
stockholders, will there not be cause
to tremble for the purity of our elec
tions in peace, and for the indepen
dence of our country in war?
Controlling our currency, receiving
our public moneys, and holding
thousands of our citizens in depen
dence, it would be more formidable
and dangerous than the naval and
mimary power of tho enemy."
When President Jackson hnd ri
termlned on his course he prepared
a paper setting forth his reasons,
and read it to his cabinet on Sep
tember 18, 1833. Here is an ex
tract: "Developments have been made
from time to time of its faithlessness
an a public agent, its misfinnHfnti
of public funds, its interference in
uiecuons, its efforts by tho machin
ery of committees to deprive the gov
ernment directors of a full knowledge
of its concerns, and above all its
flagrant misconduct as recently and
unexpectedly disclosed in placing all
tho funds of the bank, including the
funds of tho government, at the dis
position of tho president of the bank
as a' means of operating upon public
opinion and procuring a new char
tor, without requiring him to render
a voucher for tho disbursement."
Again in his sixth annual message
to congress, December 1, 1834, Pres
ident JackBon said:
"Tho bold effort the present bank
has made to control the government
tho distress it has wantonly, pro
duced,' tho violence of which it has
been tho occasion are but pre
monitions of tho fato which awaits
tho American people should they bo
deluded into a perpetuation of this
institution, or tho establishment of
another like it."
This last message was written after
Jackson had delivered his master
stroke against tho bank, and it was
causing panic by way of revenge. For
when he was convinced that tne
bank was using the government's
own funds to fight tho administra
tion, Jackson ordered the removal of
tho government deposits from the
bank. This was a thing which the
bank had thought ho would not dare,
but he did. His secretary of the
treasury resigned rather than make
tho order, but Roger B. Taney was
appointed ad interim, and he drew
up the order. Tho money on deposit
was not taken out in a lump, but
gradually, as it was needed, and no
more was deposited, in order to cre
ate no hardship.
The bank directors were wild with
fury. They withheld accommoda
tions from firms employing many
operatives, causing failures and lack
of employment, and started panics
wherever they could. But Jackson
stood firm. One of tho wildest
scenes of all was in the United States
senate, a judicial body which the
constitution has vested with the
power of trying the president by im
peachment proceedings when he
oversteps his authority. This sup
posedly august body so far forgot
itself in Its fury as to pass a resolu
tion that tho president of tho United
States had "assumed upon himself
authority and power not conferred
by the constitution and laws, but in
abrogation of both." And this reso
lution was introduced by Henry
Clay.
In other words, the proper court
to try the president for an alleged
offense, acccused him, debated his
actions in his absence and without
serving notice on him, and declared
him guilty without a hearing.
Despite all this Jackson stood
firm against the rechartering of the
bank, and it finally had to go out
of business.
Now, after long and careful prep
aration, including the demonetiza
tion of silver and the intrenchment
of various friendly interests in the
senate, comes Nelson W. Aldrich
with his plan for turning over once
more to a private corporation the en
tire banking business of the United
States, and his plea for a chaTter for
the Reserve Association of America.
Denver Post.
A GROWING QUESTION
The growing gravity of the ques
tion, of alcoholism in France is ad
mitted in a very striking way in
Premier Briand's recent speech in
the French senate on the m-nnnnori
law for the regulation of the liquor
trade. Announcing that the govern
ment is determined to combat tho
drink evil, he declared the present
situation to be so "terrible" that "the
very me or tne nation is at stake."
Mr. Briand is a statesman usually
well controlled in his utterances, so
that his language on the occasion re
ferred to may fairly compel atten
tion. The first clause of the bill
which the government indorsed in-
uiuuuss me sore need of some restric
tion upon the trade. It provides for
gradually reducing the number of
public drinking places to one for each
200 inhabitants, or three for 600 in
habitants; and how far oven this re-
m-iiuuuu wouia oe from equalizing
the restriction under Massachusetts
law may be seen in fact that in this
state the number of saloons in a
city are limited to one for evorv
thousand Inhabitants. The senti
ment is evidently growing in Ger
.VOLUME 11, NUMBER If
many, England and France that th
liquor trade has hitherto been too
littlo regulated. In Germany, tho
kaiser has lately thrown, hig influence
very strongly against excessive beer
drinking, and in England the present
government has had one of its moBt
bitter fights against the brewers and
the public houses. It is no exagger
ation to say that the ravages of alco
holism in those three leading Euro
pean countries have been frightful in
their social effects, and now that
such acute questions as unemploy
ment and poverty are forced upon
the attention of the governments in
a practical way by socialists and ad
vanced radicals, the evil of excessive
drink is beginning to be studied as
never before. England literally
stumbled into an effective measure
of restriction when it was unexpect
edly demonstrated that the Lloyd
George liquor taxes had diminished
the consumption of spirits. No party
now would dare to reduce those
taxes. Springfield (Mass.) Repub
lican. Pimples Off
In 5 Days
,?N
Tho New Calcium Sulphide Treat.
mont Does Wonders to Every
Kind of Skin Eruption.
V.
Trial Packago Sent Free to Prove It.
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ioaay ana we will at once send yoi
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Address, P. A. Stuart Co., 408 StJ
iag., marshal!, Mich.
! 13
P'i ,K
