weakness to furnish funds to the Lincoln administration for the purpose of carrying on the crusade against the South-moneys which had been entrusted to them by their stockholders to be employed for legitimate business purposes. This, in its practical effects, is much worse than Mr. Biddle's operations; for they, by their unauthorised and improper course, have brought irretrievable ruin and disgrace upon the country; while the evils inflicted by the former, though widespread and carrying misery to many a hearth, were felt only by individuals. The presidents. of the Philadelphia banks had it in their power to stay the hands of those of New York and Boston.

Nor is this all: the monied institutions of the three cities have been deceiving the people. It is said that they have a standing arrangement with the Federal Secretary of the Treasury to keep down the volume of greenback currency, by taking the 5-20 loan at 80 cents on the dollar, they receiving the benefit of any sales that may be made to the public through the United States subscription agency. In other words, all Mr. Chase's financial arrangements are now made through these banks, who thus receive what is equivalent to a commission of 20 per cent. on each transaction; and for this they allow him the use of the specie in their vaults to "bear' the gold market. The result will be, that the Government and the banks will break up, or rather break down, together, and the ruined stockholders and outraged communities will take their vengeance upon the guilty parties.

The politicians of the old Federal party, and their successors, the Whigs and Republicans, have ever had a desire for a national bank; in this they have always been opposed by a large majority of the Democrats, on the ground of the inutility and unconstitutionality of the measure. Its advocates base their arguments upon the success of the Bank of England as the fiscal agent of the British Government, without making allowance for the difference in political institutions or in geographical extent of the two countries. The respect

able old lady' in Threadneedle Street might as well extend her sphere of operations to Canada and Australia, as for a bank in the American States to control the currency and regulate exchanges throughout their entire space. The two banks

chartered by Congress-the first in 1791, the second in 1816never accomplished what was expected of them: the latter concern became, with the decay in public morals, a most corrupt corporation; the Pennsylvanian charter was a mere continuation of the Federal grant. The circulation of the banks of the individual States was always much larger than that of the Bank of the United States. It took some time for the business of the country to become settled after the two wars with Great Britain; and the operations of each bank created by Congress beginning at a favourable period, the cause of the restoration of mercantile credit was ascribed to those institutions on both occasions.

The Federals have fallen into another error in attributing the success of the revolutionary struggle to financial facilities afforded by the Bank of North America at Philadelphia, which institution was chartered by the Congress of the Confederation in 1781; the proposition for its organisation having originated in a resolution of May 26, 1781, founded on a suggestion of the Superintendent of Finance, which was carried into execution by an ordinance of December 31, 1781, entitled, 'An Ordinance to Incorporate the Subscribers to the Bank of North America;' and it commenced business on January 7, 1782, eighty days after the surrender of Yorktown, which was the decisive event of the struggle. It is, therefore, folly to say that the bank contributed in any degree to the success of the cause in which the Americans were then engaged. The truth is, that the bank received great pecuniary aid from the Government by means of the credit conferred by its charter; and how history has been so warped it is difficult to comprehend. The bank was a sort of close corporation, used to serve the selfish ends of some speculators who managed its affairs. It continued in existence only a few years, when it was succeeded by another bank of the same title, chartered by the State of Pennsylvania, but endowed with dissimilar powers, the directors of which institution have had the hardihood at this late day to make the subjoined misstate

ment:

'Bank of North America, Philadelphia: July 28, 1862.

At a meeting of the directors this day, the following pre' amble and resolution were adopted unanimously :—

'Whereas this bank was instituted in 1781 to aid the colonies ' in the struggle for their independence; and whereas it has ever 'since prospered under the Government it assisted in creating; and whereas (in carrying out the policy of making contribu'tions to such objects only as are in its legitimate sphere) the stability of the Government is most essential to the interests ' of the stockholders: It is therefore

6

Resolved, that the sum of ($5,000) five thousand dollars be 'contributed by the bank, and disposed of in such manner as 'the president may deem most expedient, to assist the Govern'ment in maintaining its integrity.

Extract from the Minutes.

THOMAS SMITH, President.

'J. Hockley, Secretary.'

6

The bank, chartered by Congress, never contributed' a penny to the Federal Government for any purpose whatever. It did not assist in 'creating' either the Federal or State Governments, and its successor has not ever since prospered;' it has failed several times, and does not at present pay its debts. Nor did it meet its liabilities at the time of the passage of the above resolution. Surely appropriating its stockholders' money, or that of its creditors, towards prosecuting the atrocious war against the South, cannot be carrying out the policy of making contributions to such objects only as are in its legitimate sphere.'

From the beginning of 1780 until the close of the war, specie was very plentiful in the States. The large expenditures of the English and French forces found their way into the interior. The foreign loans, too, were paid in hard money; and the Havannah trade, clandestinely conducted during hostilities, occasioned a large influx of silver dollars. In fact, the operations of the war caused such a drain of the precious metals from Europe, that the Bank of England was brought into jeopardy, and the Caisse d'Escompte at Paris actually suspended in 1783.

A remarkable hallucination in reference to a national debt has likewise been prevalent in the Northern States. Many persons have believed that such was desirable, in order to

'cement the Union,' again holding out the example of England in order to strengthen their arguments, without making any discrimination as to causes or consequences. The enormous wealth thrown into the lap of England by the African and Indian trades enabled the Government to carry on successfully the wars in which it was engaged; the money having been spent mostly at home, the nation became, as it were, the trustee for the capital, and thus originated the Consolidated Fund. Under the operation of the laws of entail and primogeniture, this arrangement has answered admirably well in Great Britain. In the American States, however, where each generation, with a few exceptions, has entire control of the principal of its property, and is not restricted to the income as in England, it is right, and in accordance with the spirit of the institutions of the country, that it should pay its own expenses in full, and not entail a burthen on those that come after it.

39

CHAPTER III.

THE MISSISSIPPI UNION BANK BONDS.

THE question of the repudiation of the Mississippi bonds handed to Messrs. Hope & Co. as collateral security by Mr. Jaudon having been much misunderstood, it will be appropriate here to present a copy of the correspondence between that house and Governor McNutt, which, with the details of the transactions of the Bank of the United States furnished in the previous chapter, will throw some light on the affair, and, it is to be hoped, rectify the misapprehensions in reference thereto that have for so long a time taken possession of the public mind. When Messrs. Hope & Co. received these bonds they were tainted with repudiation. The agency of the Bank of the United States in London, which was continued until its directors made an assignment, in the autumn of 1841, had paid the interest on them from the time they passed out of its hands in the latter part of 1839 up to November 1840, the amount being credited against the principal of the loan contracted with Mr. Jaudon by the Messrs. Rothschilds :

:

To the Governor of the State of Mississippi.

The undersigned, as trustees for the holders of debentures of the Bank of the United States of Philadelphia, on deposit of American State stocks, and amongst others of a considerable amount of bonds of the State of Mississippi, bearing five per cent. interest, issued through the Union Bank of Mississippi, and made payable at the agency of the United States Bank of Pennsylvania, in London, the principal in 1850 and 1858, and the dividends semi-annually in May and November, having been refused payment of the interest due the 1st of this month on said bonds, are compelled to address themselves to the government of the State of Mississippi; and from their confidence in