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on this subject for a month, but when the matter was finally taken under consideration the discussions were long and tiresome.* Calhoun said that a doubtful state of the currency was a strain on public and private credit and that it was the plain duty of the Government to restore specie payments; but as specie payments could only be restored through the agency of a National specie-paying bank, Congress should exercise its power to establish one.† Clay then came down from the Speaker's chair and spoke practically to the same effect, though he exactly reversed his stand of 1811.

Webster, however,

opposed the bill, saying that it was a mistaken idea that a National bank ought to be created to regulate the currency; but he said that, as the currency had not been created by the National government, but by banks acting under the authority of the States over which Congress had no control, there seemed to be only one way to remedy the condition to forbid the custom house collectors and the receivers to take State bank notes in payment of dues and taxes.|| How

*See Annals of Congress, 14th Congress, 1st session, pp. 1060-1067, 1070-1115, 1118-1112, 11391149, 1151–1158, 1189-1195, 1200-1219; Benton, Abridgment, vol. v., pp. 595-600, 621-627.

† Annals, pp. 1060-1066; Jenkins, Life of Calhoun, pp. 92-99.

‡ Annals, 1189-1195: Dewey, Financial History, pp. 149-150; Sargent, Life of Clay, p. 64 et seq.; Schurz, Life of Clay, vol. i., p. 132 et seq.

Annals, pp. 1091-1094; Webster's Works (National ed.), vol. v., p. 48; Curtis, Life of Webster, vol. i., pp. 148–150.

ever, Webster's opposition was futile, for the reasons given by Mr. Dallas had greater weight with the majority of the members of Congress than those of the opposition. In his report, Dallas said:

"The establishment of a National Bank is regarded as the best, and, perhaps, the only adequate resource to relieve the country and the Government from the present embarrassment. Authorized to issue notes which will be received in all payments to the United States, the circulation of its issues will be co-extensive with the Union;

and there will exist a constant demand, bearing a just proportion of the annual amount of the duties and taxes to be collected, independent of the general circulation for commercial and social purposes. A National Bank will, therefore, possess the means and the opportunity of supplying a circulating medium of equal use and value in every State, and in every district of every State. Established by the authority of the Government of the United States; accredited by the Govern ment to the whole amount of its notes in circulation; and intrusted, as the depository of the Government, with all the accumulations of the public treasure; the National Bank, independent of its immediate capital, will enjoy every recommendation which can merit and secure the confidence of the public. Organized upon principles of responsibility, but of independence, the National Bank will be retained within its legitimate sphere of action, without just apprehension from the misconduct of its directors, or from the encroachments of the Government. Eminent in its resources, and in its example, the National Bank will conciliate, aid and lead the State banks in all that is necessary for the restoration of credit, public and private. And acting upon a compound capital, partly of stock and partly of gold and silver, the National Bank will be the ready instrument to enhance the value of the public securities, and to restore the currency of the national coin."*

Therefore, on March 14, the House passed the bill by a vote of 80 to 71. On April 3 the bill, after being amended, was approved by the Senate

*Annals, pp. 1643-1644.

by a vote of 22 to 12;* on April 5 the House concurred in the amendments, and on April 10 the President, notwithstanding his course on a previous occasion, signed the act and it became law. The principle features of the act were these: The charter extended the life of the bank 20 years; the capital was $35,000,000, of which the Government was to subscribe $7,000,000; of the rest, one-quarter, in shares of $100, was to consist of gold and silver and the the other three-quarters of funded debt; subscriptions were to be payable in four installments, and upon the payment of the first installment the bank was to be organized and operations were to commence; the headquarters of the bank was to be at Philadelphia, but branches might be established elsewhere, under the control of the board of 13 persons appointed by the directors; a board of 25 directors was to be appointed to manage the affairs of the institution, the Government appointing five of these, the rest being elected by the stockholders, some being changed at each election on the rotation principle; the President was to be elected from among the directors annually, and resident citizens alone were to be eligible as directors; the notes of the

For the debate see Annals, pp. 235-249, 251, 255, 257-281; Benton, Abridgment, vol. v., pp. 469-477.

† Adams, United States, vol. ix., p. 118; White, Money and Banking, pp. 277-279; Babcock, Rise of American Nationality, pp. 226-227. For text see United States Statutes-at-Large, vol. iii., pp. 266-277; for the significant portions see MacDonald, Select Documents, pp. 208-212.

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bank were to be receivable in payment of all dues to the United States, the bank holding, transmitting, and paying public money without charge; and unless authorized by Congress or the President, specie payments were not to be suspended.*

Calhoun and his supporters did not depend alone upon the exertions of the new bank and its branches for the return of specie payment. On March 15, 1816, in the hope of restoring it before the bank went into operation, Calhoun requested Dallas to give him information as to whether the taxes could not be collected in gold, silver, Treasury notes and the notes of such banks as were paying specie. In a letter dated March 19 Dallas sketched a plan of a law which would require such payments to be made,t and on April 6, Calhoun presented it to Congress. This plan provided that after December 31, 1816, no collector of revenue or tax receiver should take anything but gold, silver, copper or foreign coins which were legal tender and Treasury notes, though the Secretary of the Treasury might, if he deemed it wise, receive notes of speciepaying banks. Though the opposition to this measure was strong, the bill was carried by its supporters through all its stages up to the time when the final question was taken on April 25,

* Dewey, Financial History, pp. 150-151. † American State Papers, Finance, vol. iii., pp. 116-117; Annals of Congress, 14th Congress, 1st session, pp. 1229–1233.

Annals pp. 1345-1346; Benton, Abridgment, vol. v., p. 643.

porations, and private individuals, began to pay out specie.

During the war the blockade of the coast had practically put a stop to commerce, but the minute the merchants saw that their commerce was ruined, they transferred their capital to manufacturing establishments. Large quantities of rice, cotton, tobacco, flour and lumber had been produced during the continuance of the blockade, the greater part of which was still in the hands of the producers; but the minute the blockade was lifted, this produce was shipped to Europe, which was only too glad to receive it. Before the Embargo, the highest monthly average of exports in any year was $4,000,000, but in 1815 it rose to $5,000,000, and from March 1 to September 30 of that year domestic products exceeding $46,000,000 in value were shipped to foreign ports, the transportation of which employed more than 850,000 tons of American shipping.* Immediately after the first intimation was received that the treaty of peace would be signed shortly, the merchants began to prepare for an immense volume of trade. Ships were chartered, crews were engaged and cargoes provided. for, so that the waterfronts soon began to assume an appearance of intense activity. When the day finally came on which shipments could be made without fear of capture, a vast

* American State Papers, Commerce and Navigation, vol. ii., p. 647.

VOL. VI.- 8

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fleet of merchantmen put out from Boston, New York and Baltimore, and the custom house clearances resumed their places in the columns of the daily newspapers. Toward the end of May and the beginning of June vessels from Europe began to arrive, bringing goods in such quantities as had never been known in the experience of the oldest merchant.* Yet, great as the volume of commerce was, it was insufficient to supply the demand. In New York City alone the duties paid at the custom house during April, May and June amounted to $3,939,000,† and during the three days in August alone 65 vessels came in from foreign ports laden with cargoes.

worth in several instances more than £50,000 sterling. This revival of trade was noticeable in every important city.

The vast influx from foreign countries began to awaken the people to the fact that these imported goods could be made as well and as cheaply in America as in Europe, and at the same time would not only provide a use for American capital, but also give employment to hundreds of thousands of artisans in all lines of

Bishop, History of Manufactures, vol. ii., p. 211. See also Niles' Register, vol. viii., pp. 120, 140, 192, 203, 290.

† Niles' Register, vol. ix., p. 44.

In 1815 the total imports and exports were $113,041,274 and $52,557,753, respectively, an increase from $12,965,000 and $6,927,441, respectively, in 1814. In 1816 these figures were $147,103,000 and $81,920,452. See American State Papers, Commerce and Navigation, vol. ii., pp. 20-24, 53-57.

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work.* As yet no suggestion had been made of a way for protecting American industries, but in 1815, but in 1815,

when the wool and cotton industries had become almost ruined by the demand for foreign-made goods of this nature, aid was sought from the Government to prevent the complete ruin of these industries. The cotton and woolen manufacturers of Morris county, New Jersey, in October of 1815, petitioned the New Jersey legislature to remove the State tax on their mills and the spindles used in them, and a committee of the Assembly to which this petition was referred recommended that the prayer be granted. On October 15, therefore, the Assembly passed a resolution to that effect. At about the same time the

*Writing to D. Lynch, Jr., June 27, 1817, Madison said: every prudent nation

*

will wish to be independent of other nations for the necessary articles of food, of raiment, and of defence; and particular considerations applicable to the United States seem to strengthen the motives to this independence. Besides the articles falling under the above description, there may be others, for manufacturing which natural advantages exist, which require temporary interpositions for bringing them into regular and successful activity. Among the articles

of consumption and use, the preference in many cases is decided merely by fashion or by habits as far as an equality, or still more where a real superiority, is found in the articles manufactured at home, all must be sensible that it is politic and patriotic to encourage a preference of them, as affording a more certain service of supply for every class, and a more certain market for the surplus products of the agricultural class."— Madison's Works (Congress ed.) vol. iii., p. 43. See also pp. 158-161.

Taussig, Tariff History, p. 29; Niles' Register, vol. ix., pp. 189–191.

Bishop, History of Manufactures, vol. ii., pp. 215-216.

cotton spinners of Providence decided to appeal to Congress and, with this object in view, sent a memorial to the various legislatures in all parts of the country requesting like action. This memorial, which was presented to the Senate on December 22, 1815, requested that all cotton fabrics save nankeens made at places beyond the Cape of Good Hope should be absolutely shut out by laws prohibiting their importation, and that heavy duties should be placed on goods of coarser textures brought from other lands.* Memorials of a similar nature were sent from Maine, New Hampshire, Massachusetts, Connecticut, New York, New Jersey, Louisiana, etc.t

On December 4, 1815, Congress assembled in the Old Patent Office. As soon as the House was organized, Clay was elected speaker.‡ On the 5th, Madison sent in his seventh annual message. Regarding the tariff, he said:

"In adjusting the duties on imports to the object to revenue, the influence of the tariff on manufactures will necessarily present itself for consideration. However wise the theory may be which leaves to the sagacity and interest of in

American State Papers, Finance, vol. iii., pp. 52-54; Annals of Congress, 14th Congress, 1st session, pp. 28, 402, 1651-1655. Bishop (History of Manufactures, vol. ii., p. 214, note) says that the several factories were assessed one cent on each spindle "for the payment of the expenses of an agent to proceed to the city of Washington, to enforce the memorial or petition of the cotton manufacturers."

For some of these see American State Papers, Finance, vol. iii., pp. 33-35, 56, 104-107; Annals, pp. 1701-1713.

‡ Niles' Register, vol. ix., p. 254.