history; and of all countries, be it remembered, England benefitted most by the general rise of prices, because so large a portion of her farmers held leases for long terms of years, and paid money rents: the increase of the circulation operating to reduce the real value of the returns, made to the landlord, in favor of his tenant. The great benefit of a full and especially an increasing circulation thus consists not only in quickening and facilitating exchanges, (itself an immense stimulus to industry,) but in securing to the industrious classes rather a larger proportion of the income of society than they would otherwise enjoy. Every thing which they buy to sell again advances in price while it is in their hands, and this unquestionable truth is of itself a total refutation of all that is said concerning the oppressive operation of bank paper upon the productive classes, by the very persons who, in the same breath, speak of its excess and depreciation.

With a population then, increasing at the rate of 4 to 5 per cent. a year, and with an accumulation of capital and productive power proportionally greater, I hold it to be utterly absurd to talk of any thing like a metallic currency in the United States. There is no possible means of procuring, and if by any means it could be procured, I venture to affirm that our people would get rid of it in the course of a few years, though all the penal laws of Spain against the exportation of gold and silver should be re-enacted here-laws which were passed with no other effect, even in that country, but to show the utter futility of such legislation. I say, sir, that with their present habits of active enterprise and strict economy, the American people would export the precious metals as fast as they were imported, beyond any amount of them which might be absolutely necessary for the domestic exchanges of the country, and they would do so because gold and silver would be of use abroad in purchasing commodities, and would be wholly superfluous at home, where paper would do as well. If you put down "the banks," it would have no effect but to set up something worse in their place, in the shape of private paper. There are some things over which the most despotic lawgivers are unable to exercise any control, and one of them, as all experience shows, is this commerce in bullion.

Sir, it has been said that the only advantage of a paper currency over the precious metals consists in its cheapness. I am, by no means, as you may gather from what I have said, ready to admit this, but supposing it to be true, is that saving really an unimportant matter? Mr. Gallatin, in a pamphlet of signal ability, has, as I conceive, fallen into a grave error on this subject, which it is so much the more important to rectify, as I perceive,

* Considerations on the Currency and Banking of the United States. Philadelphia, 1831. VOL. I.-40

that he has misled others more disposed than himself to turn a speculative error into a practical mischief. He states the whole benefit derived from the use of paper instead of the precious metals in the United States in 1830, including, under the name of circulation, private deposites in the banks, as they ought undoubtedly to be, at about five millions of dollars a year. It is true that, according to principles admitted by Mr. Gallatin, the progress of the country, both in wealth and population, in the last seven years, would require a very considerable addition to be made to this estimate in order to a correct application of it to our actual condition. But, sir, it appears to me that the estimate was made on data altogether erroneous. In the first place, the quantity of currency, if it were metallic, necessary to the circulation of this country, was prodigiously underrated. For reasons that need not be stated here, it is found that a given amount of metallic currency does not circulate as rapidly as an equal amount of paper, and therefore, that more of it is, ceteris paribus, required to do the same business. But, without going into such minute inquiry here, why should the United States, with sixteen millions of inhabitants, and relatively the most active trade both foreign and domestic in the world, and with extraordinary productive power of all sorts, not need, at the very least, half the circulation necessary in France, with only double their population, and not half their industry? The stress that ought to be laid on this latter circumstance may be illustrated by comparing Asia with Europe in this particular; double the population in the former, possessing, according to the most accurate researches, only one-fifth the quantity of gold and silver, which, in addition to paper of all sorts, is required in the latter. Now, the circulation of France was, before the first revolution, set down by Neckar at £SS,000,000*-and Thiers, in his history of that event, makes a similar estimate. Its present amount ought in reference to the increase of her capital and population, to be, at least, 600,000,000 of dollars, and accordingly, as was observed by one of my colleagues, (Mr. Thompson) it is stated at that, on good authority. Mr. Rothschild, in his examination before the Committee of the House of Commons in 1832, mentions the paper circulation of the Bank of France as amounting to 750,000,000 of francs. According to this, then, we should require, on the footing of population alone, at least 300,000,000 of dollars. So much for the amount; now for the loss upon it.

Mr. Gallatin considers it only as so much interest on dead capital, and even the interest he puts at an exceedingly low rate. But I apprehend the difference to the country between having a

* See an article in Blackwood's Magazine, for last February.

+ Burke's Letter on the French Revolution.

Thiers' Hist. de la Revolution Francaise, v. 5, p. 24.

vast inert mass of gold and silver as currency, and turning it into productive capital, must be determined, not in reference to interest merely, but the profit of stock laid out in active industry, which is no where in this country less than 10 per cent., and, in the great majority of cases, the new states and all included, near double that amount on an average. You see then, sir, what an enormous loss a metallic currency would be to the nation, without taking into the account its wear and tear. Look back at the half century that has passed away, and say what that loss would have been, on principles of compound interest, from the beginning up to the present day. Why, sir, it exceeds all powers of calculation, nay of imagination. Do not suppose for a moment that so important, so palpable a truth, although never stated in abstract terms or as a general proposition, has not occurred to the people of the United States. They have felt it without perceiving it, they have acted on it without reasoning about it, they have perfectly well comprehended the real uses of money, without studying the principles of currency, and they have preferred paper as a circulating medium to gold and silver, because it was better for their purposes than gold and silver, on the simplest maxims of prudence and economy. You may depend upon it, this conclusion is as deeply rooted as it is just. You will never be able to shake it. All your policy will be of no avail, as all legislation is forever vain which comes in conflict with the genius of a people, especially in matters so deeply and visibly affecting their private interest. The Barbarian who, in his impotent rage, threw fetters into the Hellespont and scourged its foaming billows, did not wage a more insane war against the nature of things.

But we are told that, if it is an experiment that has been proposed to us, we need not be alarmed at it, because we are accustomed to experiments, and successful ones; that our Constitution itself is a mere experiment. Sir, I deny it utterly, and he that says so shows me that he has either not studied at all, or studied to very little purpose, the history and genius of our institutions. The great cause of their prosperous results—a cause which every one of the many attempts, since vainly made to imitate them, on this continent or in Europe, only demonstrates the more clearly-is precisely the contrary. It is because our fathers made no experiments, and had no experiment to make, that their work had stood. They were forced, by a violation of their historical, hereditary rights under the old common law of their race, to dissolve their connection with the mother country. Their external, their federal relations were of course changed, and in that respect, and, in that respect only, they were compelled to do their best in the novel situation in which they stood. What relates, therefore, merely to the union of the States is all that

gives the least countenance to this superficial idea of an "experiment", which has done so much to misguide the speculations of some visionary minds upon these important matters. Even in this respect, however, an attentive study of our history will show that strong federal tendencies existed and had, frequently, on former occasions manifested themselves.* But the whole constitution of society in the States, the great body and bulk of their public law, with all its maxims and principles-in short, all that is republican in our institutions-remained after the revolution, and remains now, with some very subordinate modifications, what it was from the beginning. Our written constitutions do nothing but consecrate and fortify the "plain rules of ancient liberty," handed down with Magna Charta, from the earliest history of our race. It is not a piece of paper, sir, it is not a few abstractions engrossed on parchment, that make free governments. No, sir, the law of liberty must be inscribed on the heart of the citizen: the word, if I may use the expression without irreverence, must become flesh; you must have a whole people trained, disciplined, bred, yea, and born, as our fathers were, to institutions like ours. Before the colonies existed, the Petition of Right, that Magna Charta of a more enlightened age, had been presented in 1628 by Lord Coke and his immortal compeers.Our founders brought it with them, and we have not gone one step beyond them. They brought these maxims of civil liberty, not in their libraries but in their souls; not as philosophical prattle-not as barren generalities, but as rules of conduct; as a symbol of public duty and private right, to be adhered to with religious fidelity; and the very first pilgrim that set his foot upon the rock of Plymouth stepped forth a LIVING CONSTITUTION! armed at all points to defend and to perpetuate the liberty to which he had devoted his whole being.

It only remains for me to advert briefly to one or two additional topics, and I have done. It has been argued as if the currency given to bank paper in this country were due almost exclusively to the countenance which government affords it, by receiving it in payment of public dues. Certainly sir, the patronage of government is an important concurring cause of this credit; but it is not true that it is essential to it. What does the house of Rothschild owe to the government of Europe-that house to which all the governments on the continent are obliged to have recourse in their financial exigencies? And here let me call the attention of those, who declaim so vehemently against the agency of banking corporations, to the fact, that this mighty house, with its scarcely less than royal influence and splendor, like most of the other establishments of the same kind in Europe, is no corporation at all, but a mere private partnership, and to

* Convention at Albany, &c.

the additional fact, that its colossal fortune has been amassed in little more than a single generation, by an obscure person, born in a corner of the Juden-Strasse of Frankfort on the Maine, and his four sons. Do you not see then, sir, that the odious common places about "the money power," and "the political powers," either have no meaning, or apply with all their force to every accumulation of capital, and all the great results of modern commerce? The "money power," I presume signifies "the power of money," which is widely diffused in this country, thanks to the protection of equal laws, and which will exist and continue to have its influence, so long as those laws shall protect it from confiscation, whether it shall borrow the credit of the government, or the government shall borrow its credit. It is scarcely necessary to notice an idea, analogous to the last, which has been very much insisted on, and that is, that the commerce of New-York has been built up by government credits. Why, sir, this does appear to me too extravagant to need exposure. New-York has been built up by her unquestionable natural advantages, and there is no measure of this government—there is only one event, that can possibly deprive her of her immense commercial ascendancy,-the dissolution of the Union-that, and nothing but that, can do it. Commerce, as I have already remarked, tends every where to centralization: look at Liverpool, look at Havre, the last, in a hard money country. But on this head there is a very important consideration, which has been urged with all his admirable eloquence, by one of my colleagues in the Senate (Mr. Preston). If this concentration of commercial business at that city be injurious to the others now, what will it become, if, by collecting the revenue in gold and silver, and thus making gold and silver mere merchandize, you add to the disadvantages of centralization all the difficulties of procuring coin-make New-York the great specie market-and render the whole country tributary to the money changers of Wall-street? Sir, a word more to the South and for the South. When your system of protection was still in all its vigor, we, (I mean the people of South-Carolina,) sent you a protest against its principles and tendency, which contained, among other objections to it, one that deserves to be repeated here. We told you that we depended absolutely upon commerce-commerce on the largest scale-commerce carried on as it has been for the last half century, with an ever increasing production, provoking and creating an ever increasing consumption, and permitting us to send a million (now a million and a half) of bales of cotton into the market, without any danger of a glut. We told you the staple commodities, especially the principal one which we produced, were among the very few in the production of which slave labor can enter into competetion with free. We reminded you that, great