presidential sanction to no bill which proposed to interfere with slavery in the States; or to abolish it in the District of Columbia while it existed in the adjacent States, met the evil as it CHAPTER II. SUSPENSION OF SPECIE PAYMENTS BY THE then presented itself-a fear on the part of some FINANCIAL AND MONETARY CRISIS: GENERAL of the Southern States that their rights of property were to be endangered by federal legislation and against which danger the veto power was now pledged to be opposed. There was no other form at that time in which slavery agitation could manifest itself, or place on which it could find a point to operate-the ordinance of 1787, and the compromise of 1820, having closed up the Territories against it. Danger to slave property in the States, either by direct action, or indirectly through the District of Columbia, were the only points of expressed apprehension; and at these there was not the slightest ground for fear. No one in Congress dreamed of interfering with slavery in the States, and the abortion of all the attempts made to abolish it in the District, showed the groundlessness of that fear. The pledged veto was not a necessity, but a propriety;-not necessary, but prudential;-not called for by anything in congress, but outside of it. In that point of view it was wise and prudent. It took from agitation its point of support-its means of acting on the fears and suspicions of the timid and credulous: and it gave to the country a season of repose and quiet from this disturbing question until a new point of agitation could be discovered and seized. The cabinet remained nearly as under the previous administration: Mr. Forsyth, Secretary of State; Mr. Woodbury, Secretary of the Treasury; Mr. Poinsett, Secretary at War; Mr. Mahlon Dickerson, Secretary of the Navy; Mr. Amos Kendall, Postmaster General; and Benjamin F. Butler, Esq. Attorney General. Of all these Mr. Poinsett was the only new appointment. On the bench of the Supreme Court, John Catron, Esq. of Tennessee, and John McKinley, Esq. of Alabama, were appointed Justices; William Smith, formerly senator in Congress from South Carolina, having declined the appointment which was filled by Mr. McKinley. Mr. Butler soon resigning his place of Attorney General, Henry D. Gilpin, Esq. of Pennsylvania (after a temporary appointment of Felix Grundy, Esq. of Tennessee), became the Attorney General during the remainder of the administration. THE nascent administration of the new President was destined to be saluted by a rude shock, and at the point most critical to governments as well as to individuals—that of deranged finances and broken-up treasury; and against the dangers of which I had in vain endeavored to warn our friends. A general suspension of the banks, a depreciated currency, and the insolvency of the federal treasury, were at hand. Visible signs, and some confidential information, portended to me this approaching calamity, and my speeches in the Senate were burthened with its vaticination. Two parties, inimical to the administration, were at work to accomplish itpoliticians and banks; and well able to succeed, because the government money was in the hands of the banks, and the federal legislation in the hands of the politicians; and both interested in the overthrow of the party in power ;and the overthrow of the finances the obvious means to the accomplishment of the object. The public moneys had been withdrawn from the custody of the Bank of the United States: the want of an independent, or national treasury, of necessity, placed them in the custody of the local banks: and the specie order of President Jackson having been rescinded by the Act of Congress, the notes of all these banks, and of all others in the country, amounting to nearly a thousand, became receivable in payment of public dues. The deposit banks became filled up with the notes of these multitudinous institutions, constituting that surplus, the distribution of which had become an engrossing care with Congress, and ended with effecting the object under the guise of a deposit with the States. Irecalled the recollection of the times of 1818-19, when the treasury reports of one year showed a superfluity of revenue for which there was no want, and of the next a deficit which required to be relieved by a loan; and argued that we must now have the same result from the bloat in the paper system which we then had. I demanded— "Are we not at this moment, and from the same cause, realizing the first part-the illusive deemed it prudent to keep-that bank which and treacherous part-of this picture? and must not the other, the sad and real sequel, speedily follow? The day of revulsion must come, and its effects must be more or less disastrous; but come it must. The present bloat in the paper system cannot continue: violent contraction must follow enormous expansion: a scene of distress and suffering must ensue-to come of itself out of the present state of things, without being stimulated and helped on by our unwise legislation." Of the act which rescinded the specie order, and made the notes of the local banks receivable in payment of all federal dues, I said: "This bill is to be an era in our legislation and in our political history. It is to be a point on which the view of the future age is to be thrown back, and from which future consequences will be traced. I separate myself from it: I wash my hands of it: I oppose it. I am one of those who promised gold-not paper. I promised the currency of the constitution, not the currency of corporations. I did not join in putting down the Bank of the United States to put up a wilderness of local banks. I did not join in putting down the paper currency of a national bank, to put up a national paper currency of a thousand local banks. I did not strike Cæsar to make Antony master of Rome." The condition of our deposit banks was desperate wholly inadequate to the slightest pressure on their vaults in the ordinary course of business, much less that of meeting the daily government drafts and the approaching deposit of near forty millions with the States. The necessity of keeping one-third of specie on hand for its immediate liabilities, was enforced from the example and rule of the Bank of England, while many of our deposit banks could show but the one-twentieth, the one-thirtieth, the one-fortieth, and even the one-fiftieth of specie in hand for immediate liabilities in circulation and deposits. The sworn evidence of a late Governor of the Bank of England (Mr. Horsely Palmer), before a parliamentary committee, was read, in which he testified that the average proportion of coin and bullion which the bank deems it prudent to keep on hand, was at the rate of the third of the total amount of all her liabilities-including deposits as well as issues. And this was the proportion which that bank was the largest in the world, situated in the moneyed metropolis of Europe, with its list of debtors within the circuit of London, supported by the richest merchants in the world, and backed by the British government, which stood her security for fourteen millions sterling, and ready with her supply of exchequer bills (the interest to be raised to insure sales), at any moment of emergency. Tested by the rule of the Bank of England, and our deposit banks were in the jaws of destruction; and this so evident to me, that I was amazed that others did not see it-those of our friends who voted with the opponents of the administration in rescinding the specie order, and in making the deposit with the States. The latter had begun to take effect, at the rate of about ten millions to the quarter, on the first day of January preceding Mr. Van Buren's inauguration: a second ten millions were to be called for on the first of April: and like sums on the first days of the two remaining quarters. It was utterly impossible for the banks to stand these drafts; and, having failed in all attempts to wake up our friends, who were then in the majority, to a sense of the danger which was impending, and to arrest their ruinous voting with the opposition members (which most of them did), I determined to address myself to the President elect, under the belief that, although he would not be able to avert the blow, he might do much to soften its force and avert its consequences, when it did come. It was in the month of February, while Mr. Van Buren was still President of the Senate, that I invited him into a committee room for that purpose, and stated to him my opinion that we were on the eve of an explosion of the paper system and of a general suspension of the banks-intending to follow up that expression of opinion with the exposition of my reasons for thinking so: but the interview came to a sudden and unexpected termination. Hardly had I expressed my belief of this impending catastrophe, than he spoke up, and said, "Your friends think you a little exalted in the head on that subject." I said no more. I was miffed. We left the room together, talking on different matters, and I saying to myself, "You will soon feel the thunderbolt." But I have since felt that I was too hasty, and that I ought to have carried out my CHAPTER III. PREPARATION FOR THE DISTRESS AND SUSPEN- In the autumn of the preceding year, shortly before the meeting of Congress, Mr. Biddle, president of the Pennsylvania Bank of the United States (for that was the ridiculous title it assumed after its resurrection under a Pennsylvania charter), issued one of those characteristic letters which were habitually promulgated whenever a new lead was to be given out, and a new scent emitted for the followers of the bank to run upon. A new distress, as the pretext for a new catastrophe, was now the object. A picture of ruin was presented, alarm given out, every thing going to destruction; and the federal government the cause of the whole, and the national recharter of the defunct bank the sovereign remedy. The following is an extract from that intention of making a full exposition of the and without the mortification of capitulating moneyed affairs of the country. His habitual to the broken banks, by accepting and paying courtesy, from which the expression quoted was out their depreciated notes as the currency of a most rare departure, and his real regard for the federal treasury. me, both personal and political (for at that time he was pressing me to become a member of his cabinet), would have insured me a full hearing, if I had shown a disposition to go on; and his clear intellect would have seized and appreciated the strong facts and just inferences which would have been presented to him. But I stopped short, as if I had nothing more to say, from that feeling of self-respect which silences a man of some pride when he sees that what he says is not valued. I have regretted my hastiness ever since. It was of the utmost moment that the new President should have his eyes opened to the dangers of the treasury, and my services on the Committee of Finance had given me opportunities of knowledge which he did not possess. Forewarned is forearmed; and never was there a case in which the maxim more impressively applied. He could not have prevented the suspension: the repeal of the specie circular and the deposit with the States (both measures carried by the help of votes from professing friends), had put that measure into the hands of those who would be sure to use it but he could have provided against it, and prepared for it, and lessened the force of the blow when it did come. He might have quickened the vigilance of the Secretary of the Treasury-might have demanded additional securities from the deposit banks-and might have drawn from them the moneys called for by appropriation acts. There was a sum of about five millions which might have been saved with a stroke of the pen, being the aggregate of sums drawn from the treasury by the numerous disbursing officers, and left in the banks in their own names for daily current payments: an order to these officers would have saved these five millions, and prevented the disgrace and damage of a stoppage in the daily payments, and the spectacle of a government waking up in the morning without a dollar to pay the day-laborer with, while placing on its statute book a law for the distribution of forty millions of surplus. Measures like these, and others which a prudent vigilance would have suggested, might have enabled the government to continue its payments without an extra session of Congress, letter. "The Bank of the United States has not ceased to exist more than seven months, and already the whole currency and exchanges are running into inextricable confusion, and the industry of charges on all the commercial intercourse of the the country is burdened with extravagant Union. And now, when these banks have been created by the Executive, and urged into these excesses, instead of gentle and gradual remedies, a fierce crusade is raised against them, the funds are harshly and suddenly taken from them, and they are forced to extraordinary means of defence against the very power which brought them into being. They received, and were expected to receive, in payment for the government, the notes of each other and the notes of other banks, and the facility with which they did so was a ground of special commendation by the government; and now that government the whole amount of these notes. I go further. has let loose upon them a demand for specie to There is an outcry abroad, raised by faction, and echoed by folly, against the banks of the United States. Until it was disturbed by the States was at least as good as that of any other government, the banking system of the United commercial country. What was desired for its perfection was precisely what I have so long striven to accomplish-to widen the metallic basis of the currency by a greater infusion of coin into the smaller channels of circulation. This was in a gradual and judicious train of accomplishment. But this miserable foolery about an exclusively metallic currency, is quite as absurd as to discard the steamboats, and go back to poling up the Mississippi." The lead thus given out was sedulously followed during the winter, both in Congress and out of it, and at the end of the session had reached an immense demonstration in New York, in the preparations made to receive Mr. Webster, and to hear a speech from him, on his return from Washington. He arrived in New York on the 15th of March, and the papers of the city give this glowing account of his reception: of enthusiasm manifested upon that occasion, Mr. W. began his remarks at a quarter before seven o'clock, P. M. and concluded them at a quarter past nine. When he entered the saloon, he was received with the most deafening cheers. The hall rang with the loud plaudits of the crowd, and every hat was waving. So great was the crowd in the galleries, and such was the columns which supported would give way, that apprehension that the apparently weak wooden Mr. W. was twice interrupted with the appalling window was broken, or a stove-pipe shaken. cry "the galleries are falling," when only a The length of the address (two and a half hours), none too long, however, for the audience would with pleasure have tarried two hours longer, compels us to give at present only the heads of a speech which we would otherwise now report in detail." "In conformity with public announcement, yesterday, at about half past 3 o'clock, the Honorable DANIEL WEBSTER arrived in this city in the steamboat Swan from Philadelphia. The intense desire on the part of the citizens to give a grateful reception to this great advocate of the constitution, set the whole city in motion towards the point of debarkation, for nearly an hour before the arrival of the distinguished visitor. At the moment when the steamboat reached the pier, the assemblage had attained that degree of density and anxiety to witness the landing, that it was feared serious consequences would result. At half past 3 o'clock Mr. Webster, accompanied by Philip Hone and David B. Ogden, landed from the boat amidst the deafening cheers and plaudits of the multitude, thrice repeated, and took his seat in an open barouche provided for Certainly Mr. Webster was worthy of all the occasion. The procession, consisting of honors in the great city of New York; but havseveral hundred citizens upon horseback, a large train of carriages and citizens, formed upon State ing been accustomed to pass through that city street, and after receiving their distinguished several times in every year during the preceding guest, proceeded with great order up Broadway quarter of a century, and to make frequent soto the apartments arranged for his reception at journs there, and to speak thereafter, and in all the American Hotel. The scene presented the most gratifying spectacle. Hundreds of citizens the characters of politician, social guest, and who had been opposed to Mr. Webster in poli- member of the bar,—it is certain that neither his tics, now that he appeared as a private individ-person nor his speaking could be such a novelty ual, came forth to demonstrate their respect for his private worth and to express their approbation of his personal character; and thousands more who appreciated his principles and political integrity, crowded around to convince him of their personal attachment, and give evidence of their approval of his public acts. The wharves, the shipping, the housetops and windows, and the streets through which the procession passed, were thronged with citizens of every occupation and degree, and loud and continued cheers greeted the great statesman at every point. There was not a greater number at the reception of General Jackson in this city, with the exception of the military, nor a greater degree and rarity as to call out upon his arrival so large a meeting as is here described, invest it with so much form, fire it with so much enthusiasm, fill it with so much expectation, unless there had been some large object in view-some great effect to be produced-some consequence to result: and of all which this imposing demonstration was at once the sign and the initiative. No holiday occasion, no complimentary notice, no feeling of personal regard, could have called forth an assemblage so vast, and inspired it with such deep and anxious emotions. It required a public object, a general interest, a pervading alarm-discontent and distress for present sufconcern, and a serious apprehension of some un-ferings-alarm for the greater, which were to certain and fearful future, to call out and organize come. This is a sample: such a mass-not of the young, the ardent, the "Gentlemen, I would not willingly be a proheedless--but of the age, the character, the phet of ill. I most devoutly wish to see a better talent, the fortune, the gravity of the most state of things; and I believe the repeal of the populous and opulent city of the Union. It was treasury order would tend very much to bring as if the population of a great city, in terror of about that better state of things. And I am of some great impending unknown calamity, had opinion, gentlemen, that the order will be repealed. I think it must be repealed. I think come forth to get consolation and counsel from the east, west, north and south, will demand its a wise man-to ask him what was to happen? repeal. But, gentlemen, I feel it my duty to say, and what they were to do? And so in fact it that if I should be disappointed in this expectawas, as fully disclosed in the address with which tion, I see no immediate relief to the distresses of the community. I greatly fear, even, that the orator was saluted, and in the speech of two the worst is not yet. I look for severer dishours and a half which he made in response to tresses; for extreme difficulties in exchange; for it. The address was a deprecation of calamities; far greater inconveniences in remittance, and for the speech was responsive to the address-ad- a sudden fall in prices. Our condition is one not to be tampered with, and the repeal of the treasmitted every thing that could be feared-and ury order being something which government charged the whole upon the mal-administration can do, and which will do good, the public voice of the federal government. A picture of uni- is right in demanding that repeal. It is true, if versal distress was portrayed, and worse com-theless its repeal or abrogation is a thing to be repealed now, the relief will come late. Nevering; and the remedy for the whole the same insisted on, and pursued till it shall be accomwhich had been presented in Mr. Biddle's letter | plished." -the recharter of the national bank. The speech was a manifesto against the Jackson administration, and a protest against its continuation in the person of his successor, and an invocation to a general combination against it. All the banks were sought to be united, and made to stand together upon a sense of common dangerthe administration their enemy, the national bank their protection. Every industrial pursuit was pictured as crippled and damaged by bad government. Material injury to private interests were still more vehemently charged than polit ical injuries to the body politic. In the deplorable picture which it presented of the condition of every industrial pursuit, and especially in the "war" upon the banks and the currency, it seemed to be a justificatory pleading in advance for a general shutting up of their doors, and the shutting up of the federal treasury at the same time. In this sense, and on this point, the speech contained this ominous sentence, more candid than discreet, taken in connection with what was to happen: "Remember, gentlemen, in the midst of this deafening din against all banks, that if it shall create such a panic, or such alarm, as shall shut up the banks, it will shut up the treasury of the United States also." The whole tenor of the speech was calculated to produce discontent, create distress, and excite The speech concluded with an earnest exhortation to the citizens of New York to do something, without saying what, but which with my misgivings and presentiments, the whole tenor of the speech and the circumstances which attended it delivered in the moneyed metropolis of the Union, at a time when there was no political canvass depending, and the ominous omission to name what was required to be done appeared to me to be an invitation to the New York banks to close their doors! which being done by them would be an example followed throughout the Union, and produce the consummation of a universal suspension. The following is that conclusion: "Whigs of New York! Patriotic citizens of this great metropolis!-Lovers of constitutional institutions of your country, Americans in heart liberty, bound by interest and affection to the and in principle! You are ready, I am sure, to fulfil all the duties imposed upon you by your situation, and demanded of you by your country. You have a central position; your city is the point from which intelligence emanates, and spreads in all directions over the whole land. Every hour carries reports of your sentiments and opinions to the verge of the Union. You cannot escape the responsibility which circumstances have thrown upon you. You must live and act on a broad and conspicuous theatre, either for good or for evil, to your country. You cannot shrink away from public duties; you |