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vote on the second reading was 11 to 8,40 and on the third, 10 to 9.41 This seems to bear out McIlvaine's statement, but there is no mention in the papers of any personal effort of Jackson to stop the repeal. Nor is there any suggestion of hostility on the part of the bank towards Jackson. The negative arguments were the old ones of 1819—the ownership of the stock by Europeans, the buying up of property in Frankfort and Cincinnati, the failure to bring specie to the West. What Tennessee needed was real capital, not ideal capital. The branches were not banks, but brokers' offices. It was better to have Yeatman, Woods and Company than a president from the Eastern states. 42 On the other side Gibbs, who introduced and supported the bill, used chiefly commercial arguments. He tried to explain the operations of a branch, and to show that it would facilitate commerce, especially in affording exchange on Philadelphia, for which it was necessary now to draw money from the Tennessee banks and to go to Louisville. He emphasized the wellknown unconstitutionality of such laws as those he wished repealed. He declared that more banking capital was needed. The $400,000 of Nashville Bank paper would be withdrawn. The remaining circulation would be that of the State Bank in Nashville, about $175,ooo, Yeatman, Woods and Company, $100,000, the old State Bank (at Knoxville), $100,000; in all $375,000. He calculated the specie as equal to $200,000. The state exported every year $2,000,000 in produce; without the proposed branch, there would be altogether too little capital.43
In the early part of 1827, the branch began operations. Little is heard of its activities during the next months. The legislature of 1826, which had repealed the prohibition of 1817, had devoted far more time to a measure “to prevent the depreciation of the Nashville Bank paper in the hands of the good people of the state ".14 The same matter was still under discussion when the assembly met a
year later. 45
Throughout 1828 and the early part of 1829, the campaign and its aftermath filled the columns of the newspapers. The flurry of discontent that greeted the announcement of Jackson's cabinet appointments, and the protests of prominent Tennesseans like Pleasant M. Miller were discussed in the papers, but curiously little is said
about banking in the state, and nothing about the Bank of the United States. In the summer of 1829, however, the entire failure of a member of the bar was announced, and it was added that this involved a number of citizens in difficulty. The bankruptcy was attributed to speculations, endorsements and the purchase of real estate. This was early in June. Two weeks later the quiet was broken by a violent attack upon the branch of the United States Bank in Nashville.
As the Nashville Bank had now withdrawn from active business, and the Bank of the State—as would appear a little later—was upon the verge of a similar fate, the Nashville branch had already had an opportunity for rapid expansion which it was not slow to embrace. The very quiet concerning its affairs thus far is explicable chiefly on the basis of its generosity in making loans. However this might be, now, in the middle of June, 1829, in a series of letters addressed to “ the cultivators of the soil and the laboring people of Tennessee " Justice Catron of the supreme court of Tennessee advanced the proposal, somewhat startling as coming from a lawyer, that no one should be bound for the debt or default of another by writing or otherwise, an exception being made in the case of suretyships entered into in courts of justice.47
One would suspect that something lay behind such a proposition from such a source; and the letters of Catron clearly show that his real purpose was to denounce the excessive loans and the yet more excessive usury of the branch bank at Nashville. Such usury, he declared, amounted to 10 per cent. per month. Apart from general rhetorical denunciation of the practice of endorsing for others, Catron's more specific allegations were as follows. The bank, he said, drew from Tennessee $170,000 a year in interest, which never returned. This was taxation without representation.
. It could own in property $20,000,000, as much as was paid for Louisiana, and could sweep into its vaults all the coin in the country. This was irresponsible power. Its enormous capital was exempt from taxation. The bonus paid for the charter was not an equivalent for this, and was amply compensated for by the bank's right to wield twenty millions of fictitious capital, by its power to buy up the people's houses and land, and by its possession of twenty millions a year of the government's deposits.
But the most interesting points brought forward by Justice
46 Vashville Banner and Whig, June 2, 1829.
inflation brought about by the branch in Nashville. The branch had been established two years, and had in that time loaned upwards of $2,000,000. This charge was made by others, and in the light of later developments may be regarded as true.
Secondly, Catron urged that no one could deny that the most momentous political question before the people was that of rechartering the bank. The charter expired March 3, 1836; the corporation's “immense anxiety” to have it renewed was known. Members of the assembly were to be elected in August and a senator in September. A resolution might be brought into the next assembly, requesting the Tennessee representatives to vote against the recharter. Hence the necessity that every one's mind should be fixed.
In the third place, Catron declared that all this was not newly thought of, but was of long standing. “Some of us, gentlemen, have for years been pledged to stand together boldly and firmly, when the day should arrive for the execution of a policy new in these States, and which is to be great in effect, I grant, but we have counted the cost.” To this point we shall recur later.
Lastly, in a note to one of his letters, he urged, that if a bank were necessary it should be national in principle and not in name only, and suggested a plan for such a bank.48
Catron's radical suggestions regarding “securityships” met with no support from others and indeed played a small part in his later letters; but his attack on the usurious practices and the excessive loans of the branch bank was backed up by several others. On the other side the most able writer, “Haywood ”, attacked Catron bitterly. He denied that such proposals had been long considered or had authority. On the contrary they were of recent concoction. The scheme was a political dodge of Catron and another individual to affect the elections. Regarding this project, “ Haywood ” said:
Call to mind that General Jackson is very hostile to the Bank of the United States, and has expressed sentiments very similar to those con
48 Letter in Nashville Banner of July 3. The directors should be appointed by the President and Senate, and Congress should have an annual visitation by committee and authority to correct abuses. Branches should be established on petition of the legislatures of the states, but should have a capital equal only to the amount of the stock subscribed to the mother bank by the state and the citizens thereof. The directors of the branches should be appointed by the legislatures, as in the state banks, and, if these failed to appoint, by the President and Senate. If the bank violated its charter, a quo warranto should be employed. The individual stock in the mother bank should pay a reasonable tax to the United States, and that of the branches, to the states, the rate to be fixed in the charter. Compare with this Felix Grundy's letter to Andrew Jackson, October 22, 1829, Jackson MSS., Library of Congress.
AM. HIST. REV., VOL. XIV.–5.
tained in the famous postscript to one of the essays respecting the details and management of the branches if they must be introduced into the States; and that in the course of the present administration some additional federal judges will probably be appointed by the President by and with the advice of the Senate. Catron was looking in this direction, and, if this failed, the state courts would be reorganized and Catron might become chief justice. "Haywood " was at least a good prophet.
When in September the assembly met, the discussion of Catron's letters was still in full swing. Soon, however, the legislature's interest was diverted to other matters, especially to the condition of the State Bank. The Bank of the United States did not, however, escape attention. At the very first, the acting governor, William Hall, referred to the condition of the currency and condemned usury and the excessive rates of note-shavers. In a rather noncommittal way he then proceeded to remark that there was some dissatisfaction with the influence and tendencies of the Branch Bank of the United States. The amount of stock held by Tennesseans was limited.50 A week later there was received the first report for this year from the Bank of the State. The statistics of this report we may omit; but it must be noted that the officers complained of the pressure upon all the local institutions by the establishment of the Branch Bank of the United States. This pressure was believed to be due to the policy of the mother bank, requiring the branches to discount on their own paper exclusively. An effort had been made by the directors to have this requirement dispensed with, but it had been unavailing, despite the good will of the president and directors of the branch at this place.51
Carroll, the new governor, said nothing about the branch; but in the assembly resolutions were introduced against the Bank of the United States. That which finally passed and appears on the statute-book premised that the extension of the charter of the United States Bank was “not consistent with sound policy", and instructed the senators and requested the representatives of Tennessee to vote against such extension, if it should be attempted before the next session of the general assembly. Meanwhile this resolution was to be printed with the acts in order that the people might be informed and instruct their representatives.52
Thus, in rather conservative tones, was the first official criticism
4° Letters of “Haywood ", Nashville Banner and Whig, August 21, 28, September 29, 1829.
50 Senate Journal, 29, September 21.
of the Bank of the United States set forth in Tennessee. Of the “Bank War”, though it belongs to national politics, this much may be said. The developments in Tennessee thus far describedCatron's letters, the discussion of them, the introduction of the hostile resolution—took place before the President's message of December, 1829, had reached Tennessee. We know now that Jackson had intended to raise the question as to the bank in his inaugural address, but upon advice waited till his first annual message. The query that then suggests itself is this: Was Catron's attack merely a self-initiated measure to further his own political interests, or was it a move on the part of that practised band of politicians around Jackson to test the sentiment of Tennessee and confirm the ideas already entertained by Jackson by enlarging on the dangers that were appearing in the course pursued by the bank in Tennessee? Catron, without doubt, was close to Jackson and his advisers: he did soon become chief justice in Tennessee, and later gave support to the President in the strife over the removal of the Cherokee Indians. Whether the latter hypothesis be true or not, the controversy that we have related at least makes it certain that Jackson's hostility to the bank, and, moreover, his wish for some reorganization, were already well known in Tennessee. On the other hand, that the sentiment of the state against the bank was not at this time strong or decided is easily discernible in the spirited answers to Catron, in the reticence of Governor Hall, in the moderate form of the assembly's resolution, in the comment of the Banner and Whig, a few weeks later, in that part of Jackson's message which referred to the bank, viz., that it was premature, but that it was just as well for the issue to be stated early in order that both friends and foes might know of it, 54 and finally in the ease with which a bank party was later developed.55
Before bringing this paper to a close, we must revert briefly to the Bank of the State of Tennessee, which at our last mention of it was declaiming against the branch in Nashville. The days of this institution were numbered: its commercial business was small, and it had only about $40,000 of notes in circulation.66 In his first
5a Polk's inquiry (in 1833) as to this point, and Jackson's definite answer, indorsed in his own writing upon the back of Polk's letter, are in the Polk MSS. in the Library of Congress.
54 Nashville Banner and Whig, December 18, 1829.
55 Jackson was kept informed of the iniquities of the branch. A letter of A. Balch to Jackson dated Nashville, January 8, 1830, comments on the extravagance fostered by the branch. “What now remains of the wreck produced by these splendid follies will after a few years be seized by the Mammoth Bank.” Jackson MSS., Library of Congress.
66 Report of Bank, Senate Journal, 1829, September 28.