the Bank of Rotterdam, in 1635, and by the Bank of England, in 1694.

The latter bank may be properly denominated the great parent of the modern banking system. It first effect ually exhibited the powerful influence which a systematic control over money and credit may give to a few individuals, and how deeply interwoven with the great interests of society is the tremendous machinery by which that control is effected. The bank was projected by a merchant named Patterson, and was chartered in the reign of William and Mary, in consideration of a loan of £1,200,000, to enable the government to carry on the war against France. The management of this loan was entrusted to the bank, the government paying £4000 annually for the service. This £4000, together with an interest of 8 per cent. upon the original loan, was the capital, in fact, upon which the bank commenced operations. Still farther enlarging upon the sphere of its predecessors, it embraced the three functions of a bank of deposit, discount, and circulation; and being originally chartered as an engine of government, it has become intimately blended with the whole governmental policy of the British empire. The entire revenue of the government passes through its hands. It acts as a governmental agent in managing the finances and the public debt, in the collection of taxes, and in the payment of interest and annuities. And this important vocation, added to its extensive discount of commercial paper, and the circulation of its notes as money, gives it a commanding influence, not only over the monetary affairs of Great Britain, but throughout the civilized world. It is in this country, however, that this subtle system has arrived at its greatest maturity, and where its deleterious effect upon the welfare of society has been most forcibly illustrated. Paper money was issued in the colony of Massachusetts as early as 1690. It was issued for the purpose of defraying the expenses incurred by the colony in its expedition against Quebec, and afterwards continued with the design of defraying the general expenses of government. In 1712 a public bank was established by the colony of South Carolina, and before the year 1730 paper money was issued as currency by the colonies of Rhode Island, Con

necticut, New Hampshire, and Pennsylvania. In most of the colonies this vacillating currency was made a legal tender, but so disastrous were its effects upon the morals and pursuits of the people, so effectually had it subjected the industrious classes to the schemes of designing speculators, that an act was passed by the British Parliament in 1763, prohibiting thereafter the issuing of paper money in the plantations of North America. At the war of the Revolution, however, a resort was had to the former provincial paper-money system, and Congress, for the purpose of carrying on the war, issued a forced currency, under the well-known appellation of continental money. This governmental scrip purported to be an evidence of debt due by government to the individual who held it, and the only value it possessed was such as the authority of government might give it. It was issued under the fallacious impression that it was in the power of government to create money, by giving a value to that which possessed no intrinsic value in itself, and so deeply imbued were the Continental Congress with this conviction, that laws were enacted making it treason to refuse it in payment, and summary punishments, executed with relentless severity, by military force as well as by the civil power, were inflicted, to secure its general acceptance. The ruinous effects of this fatal error were felt, not only during the war of the Revolution, but long after its close. Penal laws were found insufficient to give it vitality, and the whole power of government and the patriotism of the people ineffectual to control the simple principles of trade. An impression remains to this day, that it was highly instrumental in carrying on the war, but it will be apparent to a careful observer that the object might have been far better effected by a simple resort to direct taxation. The use of this fictitious agent but added to the calamities of the struggle, and as the Tories parted with it as speedily as possible, the main burden of its loss fell upon those whose patriotism sustained the contest, and whose swords achieved the result.

The Bank of North America was founded in 1781. It was established at Philadelphia, with a capital of $400,000, $254,000 of which was subscribed by the United States, and but

$70,000 by individuals. It was established as a bank of discount, deposit, and circulation, after the model of the Bank of England. This bank, by various shifts and contrivances, managed to obtain an extensive credit; but so injurious were its effects on the interests of the community, that its charter was repealed in 1785. By great exertions, however, it obtained a new charter in 1787 for fourteen years, which was afterwards continued by successive acts of the Legislature of Pennsylvania.

Among the first measures of the dominant federal party, after the adoption of the federal constitution, was the creation of the old Bank of the United States, by a charter from the General Government. It was chartered in 1791, avowedly, to use the language of its projector, Hamilton, "as a powerful political engine," with a capital of ten millions, and continued in operation until the expiration of its charter in 1811. About the time of its charter, State banks were established in Massachusetts, New York, and Rhode Island, and before the close of its eventful career, eighty-nine banks had sprung up in different parts of the Union, whose aggregate capitals exceeded fifty-two millions of dollars. In 1816 the late Bank of the United States was chartered by Congress, with a capital of thirty-five million dollars, one-fourth of which was required to be paid in coin, and the remainder in stock. As the history and effects of this institution have become a part of the current information of the day, any further detail for the purpose of this article would be superfluous. From the report of the Secretary of the Treasury, the number of State banks in the year 1836, at the expiration of the charter of the United States Bank, had increased from eighty-nine to five hundred and sixty-seven, and, according to the table furnished by Mr. Raguet, in his late work on banking, the number had been swelled in 1840 to nine hundred and one, with an aggregate capital exceeding three hundred and fiftyeight millions of dollars, and a circulation of bank paper, amounting to about one hundred and seven millions.

By insensible degrees these institutions have increased in number and influence, until they have become deeply interwoven with the business and operations of all classes of society. The

system resulting from their establishment has gradually emerged, like the feudal, from the changed pursuits of a new condition of society. Like the feudal, it has developed itself from the wants and necessities of that new condition, noiseless in its progress, but gradually increasing in power and influence, until from its simple vocation as a means for facilitating the complicated relations of commercial intercourse it has grown into a system of the highest political importance, overspreading the whole structure of society, and pervading its minutest ramifications. The business of banking being especially devoted to the operations of money and credit, it embraces within its influence the two most powerful elements existing in the present commercial structure of society; and the control effected over them, through its subtle organization, operates in a greater or less degree upon every member of the community. The relation which money bears to the present wants of society, affords to any system designed to regulate and control its operations a means of influence the most powerful that can be devised, for affecting the general interests of mankind. The acquisition of property is a pervading feature in our social organization, and that condition of society which leaves unrestricted the power of individuals legitimately to acquire it, realizes one of the most important ends of political liberty. When its acquisition is left unrestricted, the inevitable result must be a more general distribution of it, and consequently a more independent social condition. Property, from being more equally devised, must more fre quently change owners, and the importance of the standard by which its value is estimated, must be proportionably increased, the more frequent that change and the more general its distribution. The universally recognized standard being money, it becomes the most valuable as well as the most influential property in the state. Money can at all times procure every other commodity, but other commodities cannot at all times procure money. A system, therefore, devised for the purpose of placing the control of this powerful social auxiliary in the hands of the few, and of enabling them, by means of that control, to make it plentiful or scarce, to increase or decrease its

value at pleasure, is placing the great interests of society effectually in their hands, and subjecting its welfare to their ignorance, ambition, or cupidity. By the operation of the banking system, the money of the nation, its gold and silver, is placed in the vaults of the banks, and their paper is furnished to the community as its circulating medium in its stead. By a harmony of interests, and through the subtle operations of credit and bank paper, these monetary rulers are enabled to operate in concert, to combine their influence and concentrate their energies, and the power wielded through such a combination, has subjected the people of this country to a dependant reliance upon its action. A population of seventeen millions of souls, the most active, energetic, and thriving in the world, and living under institutions professedly the most free, are reduced to a dependance upon the operations of powerful moneyed corporations, and compelled to regulate the conduct of their affairs, business, and pursuits, by a careful observance of their movements. Credit, from whose healthy exercise society derives one of its most efficient stimulants, is subjected to the arbitrary control of a leagued corporate influence; and a dependant community, at one period stimulated to speculative madness by its wanton abuse, through the expansion of bank paper, are reduced at another to wide-spread distress and calamitous suffering from its ruinous contraction. Yet what are the institutions upon which we have thus freely conferred this omnipotent influence over property, morals, and happiness? The most able writers upon banking have proved with the clearness of demonstration, that they neither create capital nor permanently render money more plentiful; and that so far as the employment of the industry of the country or the commerce of trade are concerned, no advantage whatever is gained by their establishment. Is this tremendous monetary machinery or ganized, then, for the purpose of enabling a privileged few to profit at the expense of the many? To enable them to circulate their credit in the shape of bank bills, as money, and to realize a multiplied interest upon their capital by receiving it upon the credit they circulate in addition to their capital? If so, then have we in effect a

monetary feudal system, exercising, in the peculiar state of society that has produced it, as positive an influence upon its action as was exercised in a former condition by the gothic structure of the middle ages. Throughout the wide-spread limits of this country, the great agricultural producers watch the influence of this monetary power upon the rise and fall of their produce with as deep an interest as they watch the effect of the atmosphere upon their crops. To them the existence of this system is in every sense deleterious, yet when their number is compared with the trading classes, for whose benefit the system is alleged to be instituted, it will be found that the government of the few over the many is realized by the most marked disproportion. By the census of 1840, the number engaged in agricultural pursuits is estimated at 3,717,756; while those engaged in trading pursuits, including merchants, shopkeepers, &c., are put down at 117,575, a number amounting to about the thirtieth part of the former; and when this is again reduced to those who have the control of banking institutions, or who profit by their existence, the number sinks into comparative insignificance.

The banking system, though acting upon an entirely different state of society, and compounded of elements of a totally different character, is marked, if not in its present state, at least in that to which its advocates desire to advance it, by the great leading feature which characterized the composition of the feudal system. It is equally a systematic concentration of power in the hands of the few, effected by an organized control over the most valuable interest in the state. If the power inherent in the feudal organization was effected by the control it established over land, its modern prototype secures the same by the control it establishes over money. If one was based upon the paramount influence of landed property, the other is established upon an interest in the state fully as influential and paramount; and, so far as they respectively accomplish an inequality in the social condition of man, there is little to choose between an hereditary titled nobility, and a permanent aristocracy of wealth. The tendency of power, unrestricted, is to concentrate, from the many to the

few; the great end of political liberty, to resist that concentration. When the feudal barons had secured to themselves an hereditary control over their tenants or vassals, the desire of still greater power led to the establishment of a superior baron or sovereign. The power thus plundered from the people was enjoyed by its possessor as the gift of God, and justified as a necessity for preserving the organization that upheld it. So far as the preservation of that organization was necessary, this great head of the system was necessary to sustain it; and an argument so potent in the feudal age is not wanting in application to the system of our age, the advocates of the extension of bank power among us having discovered an equal necessity for the institution of a "great regulator."

The rise and progress of these respective systems equally illustrate the assertion with which we set out at the commencement of this Article. As illustrating the concentrative tendency of power they are equally forcible examples; and whatever may be the ultimate destiny of our race, whether, as the far-seeing minds of Germany have predicted, it is destined to arrive at the benign dominion of an all-pervading humanity when the individual as well as the general interests of men shall dictate an harmonious equality, the history of the past is but the history of its concentrative tendency; and the nations that have perished in the progress of the race have either sunk from the anarchy produced by the struggle for its attainment, or the national degeneracy consequent upon its unlimited development. The progress of the feudal system was from a state of agricultural independence to the most abject political subjection, and out of the new order of things produced from its dismemberment, we are rapidly hastening to the creation of another system, calculated to sway as omnipotent an influence over the state of society that has produced it. We are building up a power in society more potent than government; a power which, by affecting men in their property, takes root in the strongest interest in the state, and against the overspreading influence of which written constitutions and the forms of government are but feeble barriers. A vast extent of country is becoming

studded over with a host of moneyed barons in the guise of banking corporators, exercising within the sphere of their local operations a paramount influence over the monetary interest; and when we have concentrated their influence and subjected their action to the dictatorial sway of a mammoth monetary monster, we shall have built up a power which, in the ambitious grasp of some future Cæsar, may enable him to crush for ever the liberties of the republic.

To those who contend for the necessity of this feudal monetary organization, and who believe that the general interests of society as at present constituted demand its institution, we answer, that the advantages flowing from the dismemberment of the feudal system conclusively establish that the continuance of such systems is prejudicial to the progressive improvement of our race. The feudal system declined as the great mass of mankind toiled upward towards a greater individuality. As that individuality or personal independence was realized by the more general distribution and enjoyment of property, we are irresistibly led to the conclusion, that a system calculated to repress its more general distribution, to render more unequal its enjoyment, to divide society into classes, to subject the industry of the many to the selfish control of the few, and to widen and render more permanent the distinctions between the rich and the poor, is highly inimical to the present welfare and future advancement of society. In the simple and natural operations of free trade, in leaving the field of individual enterprise and exertion unrestricted by controlling monopolies and complicated systems, do we believe the great interests of society to be advanced. Legitimate freedom in everything we regard as a cardinal principle of republicanism. We hold that every rational being is entitled to the full exercise of his powers when that exercise conflicts not with the rights of his fellows. The glory of our institutions consists in the fact, that they are fitted for the highest degree of moral and intellectual development that man is capable of attaining. As the most elevating feature in the development of individual character consists in its own faithful self-government, so, in a nation, the noblest spectacle is that of a people