CHAPTER XV.

FINANCIAL.

I

HAVE devoted the energies of a treasury, and the bank of the United long and eventful life in a continued States was chartered to aid in the proeffort to reform the system of credit, finance, and currency, of the United States. One of the first acts of my public life, as chairman of a committee of the legislature of Missouri, was to examine into and report upon the causes of the

cess of resumption. Under the pressure thus produced, the Southern and Western banks did resume, but the bank of the United States being the depository, and required to convert into specie the notes received for customs and for the public lands, the SUSPENSION OF THE BANK OF MISSOURI. pressure for specie became so severe, One of the measures adopted in 1812 that Mr. Cheves, who had been elected by "the English party in the United president of the bank, made an arStates," to enable England "to carry rangement with Mr. Crawford, then into effect her own projects in Europe," Secretary of the Treasury, under which was the organization, in Boston, of a it was agreed that large sums, nearly combination to depreciate the credit of equal to the whole amount of their own the government of the United States, circulation, should be left as deposites, and it was found necessary to permit with certain selected state banks, upon the banks in the Middle, Southern and condition that they would convert the Western states to suspend specie pay-notes of other banks, received in payments, that they might lend their notes ment for public lands, and remit the to the government, in exchange for specie to the branches of the bank of treasury notes. It was with the notes the United States. And thus we found of these suspended banks that the gov- that the bank of Missouri, in St. Louis, ernment fed, clothed, and paid our and the bank of Edwardsville, in Illiarmies, and gave protection to the nois, both being deposit banks situated "beauty and booty" of New Orleans, on opposite sides of the river, were reand to our women and children, who quired to convert the notes of each were exposed to the tomahawk and other into specie, to be sent, by the scalping-knife of the merciless allies of same steamer, to the branch of the Great Britain. The war of 1812, car- bank of the United States in Louisville. ried many volunteers into the Indian The committee ascertained this fact. territory, the Indian title to much of We saw that the arrangement was inwhich was extinguished by the treaties tended to relieve the bank of the of peace. The revival of our foreign United States from the odium, by maktrade, and the sales of public land, ing the local deposit banks war upon placed a large amount of the notes of each other for the benefit, as we then the suspended banks in the public supposed, of the bank of the United

monetary system, by the export of our specie. I then saw that the crisis of 1837 and 1840 was the result of a deliberate combination to revolutionize the machinery of the American trade.

CAUSE OF ITS FAILURE.

States. We did not then realize, nor did I do so until long thereafter, that the bank of the United States and, indeed, the whole banking system of the United States-was but a part, and the weaker part, of the financial system which, as then organized, enabled England, at THE BANK OF THE UNITED STATES—THE will, "to carry into effect her own projects in Europe." The specie which The failure to renew the charter by the bank of the United States then took Congress compelled the bank of the from the Southern and Western banks, United States to accept a charter from was remitted, through the agency of the state of Pennsylvania, which made our commerce, to London, to aid the it necessary for that bank to sell out bank of England to resume specie pay- its branches. The funds thus obtained, ments. The effect was to reduce the were chiefly in the notes of the pet exchangeable value of land and other banks, the payment of which in specie western property more than one half would have created a monetary crisis. the government of the United States The directors, therefore, invested the compelling the purchasers of public greater part in state bonds, and in adland, from whom unpaid instalments vances upon cotton and American exwere due under the then existing sys-ports, relying upon the sale of these tem of land sales, to relinquish their in Europe to reinstate the capital of purchases, for which they were unable the bank. With this view, the produce to make payment, at a loss of more than fifty per cent. on the sums previously paid.

THE POWER OF THE BANK OF ENGLAND.

was consigned to a house established in Liverpool for that purpose, and Mr. Jaudon, the cashier of the bank, was sent to London with the state bonds. Relying upon the sales of cotton and With the knowledge which I then state securities for funds to make the had, I attributed the monetary pressure payment, the bank drew bills on their upon the South and West, and the correspondents in London and Paris to fluctuations in the values of property, enable the merchants, who had lost by to the controlling influence of the bank the great fire in New York, to pay their of the United States; and believed European creditors. Fully aware of the that the power of that bank consisted arrangements made by the bank of the chiefly in her control of the public de- United States, and that the produce held posits. I was, therefore, no less op- by Biddle and Humphries, apart from posed to the system of pet banks, the much larger amount of state securiorganized, upon the removal of the de- ties held by Mr. Jaudon, was more than posits in 1833, as a party measure, in- ample to meet the bills drawn by the tended to promote the election of Mr. bank of the United States, the bank of Van Buren. It was not until I visited England passed an order that no bill London in 1841, and conversed with predicated on the purchase of any Mr. Wiggin, that I came to under- American produce should be discounted. stand the power and influence which The consequence was that Biddle and the bank of England had exerted and Humphries could not sell cotton, nor could at any time exert, over our could Mr. Jaudon sell state bonds, and

on the last hour of the last day he had ton as a special envoy to Washington; to go forty miles into the country to having made a treaty with other powget Morrison & Co. to lend him the ers, the purpose of which was to so funds, on an hypothecation of state modify the law of nations as to enable bonds, to save the bank from protest. her to seize American ships suspectThe process of hypothecation and re-ed of being engaged in the slave trade, newal, at ruinous rates, was continued to be condemned by a British court, until the balance was paid by a sur- and thus enable her to monopolize the render of securities, at rates so much trade of Africa, the ratification of below their par that the increased which was then pending before the value was estimated in 1843, by the French Chamber of Deputies. A few American correspondent of Messrs. days after I reached Paris, I was inMorrison & Co., at two and a half mil-vited to a diplomatic dinner, by Gen. lions of dollars. Cass, who introduced me to Baron We have seen the effect of that com- Rothschild, saying that I was just bination upon the interests of the from the United States, and could give people of the South, as illustrated in more information about American sethe depreciation of the market value curities than any person then in Eu

of cotton caused by the utter destruc- rope. "Ah," said Rothschild, rising tion of American credit. But no es- from his seat, "what can you say about timate has been or can be made of the your country?" I replied, "What about aggregate losses of the American my country?" He said, "About paying people, by the surrender, to the bank your debts-paying your debts, sir. My of England and the money changers of London correspondent writes to me Europe, of the entire control of our currency and of credit, including, as that surrender does, the control of the value of our industry and our commerce and of their products.

THE MONETARY CRISIS OF 1857.-BARON

ROTHSCHILD.

to-day asking whether you can borrow any money on the continent, and my reply is not a dollar, sir, not a dollar." "Ah,” said I, "if you suppose that we are like the kings of Europe, compelled to come to you to ask permission to go to war, you are under a great mistake, sir: a very great mistake." "How so ?" said he. I replied: “No one knows better than you do, the value of credit; you know that we have paid our national debt. You know that we have all the elements of war within our own control, and that having the power of taxation, we can com

That we may form some imperfect estimate of the effect of that "control," we refer to the monetary crisis of 1857, and of the causes which produced it. As we have said the traditionary policy of Russia has been to seize upon Constantinople and the Dardanelles, as the gate to the com- mand the requisite resources, with merce of India. It so happened that I our treasury notes. We have no wish was in Paris in the winter of 1841-2. to go to war, and do not intend to England, wishing to so adjust the make war, but we have more than boundary of Maine as to obtain a three millions of freemen, whose priv more direct communication between ilege it is to fight in defence of their Halifax and Quebec, had just announ- country, in case we are invaded; and ced the appointment of Lord Ashbur-more than that, sir, we can, in a very

short time, create a fleet of steamships that instead of uniting with England which would drive back the whole to emancipate our slaves, it was piratical fleets of Europe, if you dare manifestly the interest of the other send them with your money, to invade powers of Europe to unite with us in us. You greatly mistake, if you sup- abolishing her monopoly of the trade pose that we want your money to en- with India. He urged me to write able us to defend our country." "Ah," out the substance of my remarks, saysaid he, “will you come and see me? ing that he wished to communicate I would like to talk with you."

SIR HENRY ELLIS.

what I had said to Lord Aberdeen. I hesitated, saying, that I was but a private citizen; and doubted the pro

COUNT MEYENDORF,

At dinner, I was seated between an priety of making such a communicaAmerican' on my left and an English- tion. He insisted, saying that I was man on my right, and repeated to the not aware how important it might be. American the substance of what had Thus urged, I assented, and began to been said, and added, that it seemed write, but before I had finished, rethat the purpose of England was war, flecting upon the remarks of Baron as a means of emancipating our slaves, Rothschild, and the conversation with but that, in case of war, we would Sir Henry, and the tone of the London form a European alliance which would press, I became so much excited that emancipate her East India subjects, I could not write in terms sufficiently and open the trade of India to the respectful, and called upon world. I noticed that the attention of the Englishman was excited. On the next day, General Cass said: "Do you know the gentleman who sat next you, on the right, at dinner yesterday? I inquired who he was. General Cass said: "Sir Henry Ellis, the brother-in-law of Mr. Robinson, the president of the board of trade. He was one of the governors of India, and British embassador to Persia. He is a chosen diplomat of England, and is now attached to the British embassy in Paris, because Paris is the centre of European diplomacy." "Then," said I, "he heard that at dinner which would go to St. Petersburg to aid in interested him." "Yes," said General the organization of a European and Cass, "he asked me who you were; American coalition against the mariand you lost nothing by passing time supremacy of England. Upon through my hands." communicating what I had done and

Who was then in Paris, as a special confidential agent of the Emperor of Russia, who explained to me, that Russia was building a railroad from St. Petersburg, through Moscow to Odessa, and had then commenced building a fleet at Sevastopol with a view to the command of the Black Sea, and the occupation of the Dardanelles, and gave me letters to the present Emperor and others at St. Petersburg, with the understanding that in case of a rupture with England, I

A few days afterwards, Sir Henry heard to the President, Mr. Tyler, he called on me, and we had a full and forwarded to me, in Paris, an autofrank conversation, in which I told graph letter, instructing Mr. Todd, him that our desire was to maintain then our minister in Russia, to intropeaceful relations with England, but duce me to the Emperor.

CHAPTER XVI.

ENGLAND AND TEXAS.

THE progress of the negotiations at ment, on a pledge of land in Texas, Washington, promising a peaceable and on the condition that, if Great adjustment of pending issues, I return- Britain would guarantee the payment ed to London, and having been furnished of the interest, Texas would stipulate by the State Department with an ab- that she would emancipate her slaves, stract of the statistics of the census of and give a pledge that she would not 1840, and having been invited by Mr. | be annexed to the United States. I Delane to write for the London Times, remonstrated against such an interfermy letters led to an intimate acquaint-ence in our relations with Texas, and with Mr. Cobden, Joseph Hume, Mr. complained that the purpose of EngMcGregor, and other influential per- land seemed to be to place a barrier sons, and brought me into direct communication with Sir Robert Peel, Lord Aberdeen, Lord Palmerston, and Lord John Russell. I was told that the Queen had said to Lord Melbourne, that, when he would say to her that the whigs could maintain themselves in power, she would authorize him to organize a government of which Lord John Russell should be the chief. I was told who were to form his cabinet, and saw and conversed with them as to the means of maintaining friendly relations between the United States and England. I conversed upon this subject with Lord Jobn Russell himself; and, at the request of one of his intimate and confidential friends, who now holds a high, confidential trust, spent two weeks at his residence, that we might the more fully discuss the relations between the two countries.

ENGLAND AND TEXAS.'

between us and the Pacific, and asked why did not Lord Ashburton adjust the Oregon as well as the northeastern boundary. To this the reply was, that if I would look upon the map of the world I would see that Oregon is the most remote part of the habitable globe to England, and that, therefore, England did not want Oregon; because the policy of our government [meaning Lord John Russell's government] will be rich customers rather than poor colonies, we, therefore, don't want Oregon, but, as no British government can sacrifice any British interest, if you want Oregon you must pay us a sum sufficient to satisfy the Northwest Fur Company." A sum then not estimated at more than five hundred thousand dollars, or, at most, one million of dollars. In a subsequent conversation with Lord John Russell, he said: "Tell Mr. Tyler, that I cannot take power now, because I wish Sir Robert Peel to adjust the Irish question, but that the first act of my

I had ascertained that a negotiation was pending for a loan of five millions of dollars to the Texan govern- government, when I do take power,