DEBATE ON A PROTECTIVE TARIFF. 587 XXX. a duty of twenty-eight per cent. on woolens (except CHAPTER blankets and worsted goods, of which the domestic supply was small), and on cottons a duty of thirty-three and 1816. a third per cent., with a proviso that all cottons should be taken to have cost at least twenty-five cents the square yard. It was upon these duties on cottons and woolens, as the most extensive in their operation, that the principal struggle took place. The mercantile representatives denounced the system of protection to American manufactures as but a mere continuation of that scheme of commercial restrictions and government interferences which had already involved the country in so many calamities. The great body of the Federalists, forgetting Hamilton's famous report on manufactures, which was now republished with applauses in the Democratic newspapers, opposed the protective policy, as well on this ground as on that of the generally debased character of manufacturing populations. Several of the old school southern Democrats, headed by Randolph, objected to the scheme of protection that it tended to build up the manufactures of the Middle and Eastern States at the expense of the South. But apart from the broad national views then entertained by Calhoun and others, the cotton-growing states had, at that time, a particular interest in encouraging the domestic manufacture of cotton. Not only did Great Britain impose a heavy discriminating duty on the raw material to the disadvantage of American cotton growers, but of the coarser cotton fabrics imported into the United States, most of them coming from India were the product of a foreign material. Hence this new tariff scheme, opposed by Webster and most of the New England men, received the support of Calhoun and Lowndes, by the latter of whom the bill was reported. CHAPTER After a good deal of chaffering, the duty on both woolens and cottons was finally fixed at twenty-five per 1816. cent., to be reduced, after three years, to twenty per cent. The important principal of minimum valuation was also retained. The duty on rolled and bar iron and anchors was $30 the ton, that on bar and bolt iron, not rolled, $7, that on sheets, rods and hoops, $50 the ton. Nails were to pay three cents, spikes two cents, and iron wire and steel wire from five to nine cents per pound; steel, $20 the ton. Spirits were to pay from thirty-eight to seventy-five cents per gallon, according to proof, with a discrimination of four or five cents in favor of the domestic distillation from grain. The duty on brown sugar was fixed in favor of the However ready Dallas might have been to establish a government non-specie paying bank, as a desperate resource under desperate circumstances, or however he might lately have struggled with the suspended banks for the privilege of supplying the people with an irredeemable paper, he did not fail to perceive, in the exist NATIONAL BANK. 589 XXX. 1816. ing state of the currency, a daily increasing source of CHAPTER embarrassments and losses. He had attempted, but without success, to induce the banks to associate for mutual check and regulation. Already the more prudent began to refuse the bills of the others. Nothing, it was evident, could put a stop to increased depreciation and utter confusion of the currency, except a return to specie payments. The government, without a hard dollar in the treasury, and, as every quarter came round, making fresh defaults at Boston, unable to pay specie itself, was in no condition to require its debtors to do so. A return to specie payments would require the importation of a large amount of cash; nor did Dallas or the majority in Congress see any other way in which that end could be accomplished except by the establishment of a national specie-paying bank, such as might furnish both to the government and the people a redeemable currency in place of the paper of the suspended banks, which would thus be compelled either to resume or to wind up. Dallas's plan for a bank, except in a few particulars, was modeled after Hamilton's; and the act of incorporation, as finally passed, varied very slightly from Dal- April 10. las's plan. The capital was to be $35,000,000, to be paid, one fifth in cash, the remainder in stocks of the United States equivalent to a six per cent. stock, except that the government was to subscribe seven millions in five per cents. The government was also to have the appointment of five out of the twenty-five directors-a differ ence here from the old bank, all the directors of which had been chosen by the stockholders. The individual subscriptions, single shares being $100 instead of $400, as in the old bank, were payable in four installments, extending over twelve months; but, as soon as the first installment, amounting to $2,100,000 in cash and $6,300, XXX. CHAPTER 000 in stocks, was paid, the bank was to commence operations. To powers, duties, and restrictions the same 1816. with those of the former bank, were added the obligation to establish, at the demand of the government, an office of discount and deposit in the District of Columbia, and a like office in any state in which two thousand shares of the stock were held, on the application of its Legislature and the requisition of Congress. By a new provision, the new bank was entitled to the deposit of the public money, unless the Secretary of the Treasury, for reasons to be forthwith laid before Congress, should otherwise direct; but in return, it was to transfer public money from place to place without charge. It was also to pay, in three installments, at the end of two, three, and four years, the sum of $1,500,000, by way of bonus for its charter, which was to continue in force for twentyone years. The government had also the privilege to pay off at pleasure such part of the stock capital of the bank as might be subscribed by individuals. There were still a few old-fashioned Republicans, opposed to any bank as unconstitutional. The Federalists, though favorable to a bank, thought the capital of this one too large, tending to place the business of the country too much under the control of a single corporation, intimately connected with the government. The holders of stock in the existing banks were also alarmed at the creation of so mammoth a rival. Motions were made and supported by Webster, Sergeant, and others, to reduce the capital to twenty millions, and to strike out the government subscription and the government direction. But the bank, as it came from the Treasury Department, was zealously supported, as well by Calhoun, who introduced the bill and piloted it through the House, as by Clay, whose violent constitutional scruples of 1811 had INTERNAL IMPROVEMENTS. 591 XXX. now entirely ceased to give him any trouble; and thus CHAPTER sustained, it passed by a great majority. Another bill, designed to compel the local banks to resume specie payments, was superseded by a joint resolution, introduced by Webster, requiring all dues to the United States, after the 20th of February, 1817, to be collected either in the "legal currency of the United States," gold and silver, that is, "or in treasury notes, notes of the Bank of the United States, or in notes of banks payable and paid on demand in specie.' The president's message, as already mentioned, had brought to the notice of Congress a third subject, which afterward gave rise to great political agitations. Jefferson, previously to the late commercial troubles, had suggested the application of the surplus revenue, then rapidly accumulating, to internal improvements. Following this lead, and prompted, doubtless, by the immense expenses and losses, and dangerous delays occasioned during the late war by the difficulties of internal transportation, Madison pointed out "such roads and canals as could best be executed under the national authority," as objects of a "wise and enlarged patriotism." To the inducements held out by the acknowledged utility of such improvements might be added their political effect "in bringing and binding more closely together the various parts of our extended confederacy." If any obstacle should be found in the want of express constitutional authority, that, he suggested, might be easily remedied. Upon the strength of these recommendations, a bill was introduced appropriating $600,000 for the general purpose of internal improvements; but this, as well as another bill for continuing the Cumberland Road, failed to pass, the objection being taken, among others, that as yet there was no surplus. The sum of 350,000 was, 1816. April 30. |