1815-17. SPECIE PAYMENTS RESUMED. 449 offered to the public was quickly subscribed, and by November, 1816, the parent bank at Philadelphia had been fully organized for business, Girard and Astor being among the government directors. Besides the other chief financial centres, - Boston, New York, and Baltimore,- branches were presently established at the national capital and in every quarter of the Union, from Portsmouth to New Orleans.* But the management of this new fiscal concern was not as prudent and honorable as before. Heedless of the jealous democracy and local bankers, a dangerous combination if politically united against them, the directors of the National Bank grossly abused its chartered privileges at the outset, discounting the notes of favored subscribers at Philadelphia and Baltimore, on the security of the bank's own stock, as a means of enabling them to meet their later instalments. The stock thus taken was rated above par; and the bank becoming thus practically involved in a speculation upon its own credit, a serious shrinkage of capital at length resulted, a new instance of the corrupting influence war may exert upon the business habits of a community.† As an instrument, however, for forcing the prompt resumption of specie payments, the new institution worked admirably. Local banks, hitherto intrusted with the government deposits, nearly a hundred in number, had either to accede to the Treasury plan or transfer their balances at once. It required no little tact and patience to bring matters to the point of speedy resumption, banks moving reluctantly and by no means in unison, and many of them, in fact, already insolvent. Under a joint resolution, introduced in Congress by Webster, February 20th, 1817, was fixed as the date for government to set the example. Assisted by its new fiscal agent, the National Treasury honored its obligations in specie in January of that year. Public credit stood * 9-11 Niles's Register; 6 Hildreth, 591–609. 1817, January. † Ib. See Joint Resolution, April 30th, 1816, which required all dues to the United States to be collected after that date either in the legal currency of the United States (i. e., gold and silver) or Treasury notes, or notes of the Bank of the United States, or in notes of specie-paying banks. VOL. II.-38 erect and firm again within two years from the proclamation of peace, and before Madison retired from office. This master-stroke recalls Hamilton and 1791. The new generation had, in truth, been well grounded in the rudiments. of sound finance, and taught to abhor repudiation and national debts. Prosperity smiled, too, upon the republic; plenty inverted her abundant horn. No longer wasted, the surplus products of agriculture sought a foreign market, and the customs receipts alone had increased from $7,282,000 in 1815 to $36,306,000 in 1816, settling afterwards to a level higher than ever reached before. War, with its commercial restraints, had wrought, nevertheless, a great change in American industries. Great seaport towns, like Salem, whose inhabitants could not readily accommodate themselves to a change, began to decline. Virginia, too, whose planters had suffered long from ravage and waste, showed symptoms of decay.* To the twin rival interests of the nation was now added a third, domestic manufactures, which had profited enormously by the causes that retarded commerce and agriculture. Protective tariff was soon to become an overshadowing theme for national discussion. All this belongs, however, to our later history, for as yet Congress did no more than to establish a peace tariff on a sliding scale, which but slowly reduced to twenty per cent. the war rate of duties hitherto imposed upon woollens and cottons. In this tariff issue, strange to record, Webster and the New England members of the House opposed protection, while Calhoun and Lowndes, on behalf of South Carolina, led in supporting it.‡ Upon internal improvements another long contest was impending, for which this Congress might be said to deploy skirmishers. For the present the nation was in no condition for carrying out the magnificent projects upon which Jefferson * Virginia planters had fed their horses on wheat in the last year of the war, all markets abroad and at home closed to them.-Jefferson's Works, October, 1814. † Act of April 27, 1816. The war duties on these articles had been about thirty per cent. Annals of Fourteenth Congress, First Session. 1815-17. PUBLIC DEBT AND REVENUES. 451 1816-1817. would have expended the Treasury surplus when the national debt was paid off* Calhoun, during the second session, procured the passage of a bill appropriating the bonus and future dividends from the United States Bank as a national fund for internal improvements; but the vote was extremely close in both branches, and the measure did not survive a veto from the President.† The public debt of the United States in January, 1816, amounted to $127,335,000, from which maximum point it steadily decreased until within twenty years more not a dollar was owed by the government. With this aggregate, exceeding by over one-half what Hamilton had grasped in 1791, the principal of outstanding indebtedness at the commencement of 1813 was more than doubled. But the American people bound the new burden to their backs and went on cheerfully. Partly by internal taxes, but chiefly by those upon imports, Congress and this administration planned a permanent revenue sufficient for meeting all current expenses and interest, and so as to apply an annual surplus besides of $10,000,000 towards discharging the principal. When the year 1817 opened, all was auspicious for instituting such a policy; most of the Treasury notes had been cancelled; nearly the whole of the national debt was already funded; cash to the amount of $10,000,000 lay in the Treasury; direct taxation could at once be dispensed with, and various obnoxious items of internal revenue besides.‡ * Supra, p. 132. Annals of Fourteenth Congress, Second Session; 9 Niles's Register, Suppl., 145-154. Having experienced the difficulties of army transpor tation during the war, Madison had, however, in general terms, recommended the extension of roads and canals so as to bring distant parts of the country into closer connection. See Annals of Congress; American Almanac, “Debt.” Great Britain's debt, on the other hand (whose figures correspond to our State and National debts united), reached its maximum of £863,602,000 in January, 1816, and during the forty ensuing years of peace that debt was not diminished by so much as ten per cent. Among internal revenue acts repealed by acts of this Congress were those which taxed carriages and harness, distilled spirits, etc., most of Dallas, to whom the chief praise of this financial exhibit should be awarded, having entered the Cabinet in a season of the gloomiest distress, at the sacrifice of a lucrative professional practice upon which his family depended, resigned from the Treasury in October, 1816, and died very soon after. Crawford succeeded him, a zealous promoter of the new fiscal institution which this distinguished Philadelphian had the honor of founding. Dallas, to compare the less with the greater, had a brief career in the Treasury strikingly like Hamilton's, whose main ideas upon finance he accepted, greatly as they had differed in general politics. He, too, was a Briton by birth, though less identified than Gallatin himself with our Revolutionary cause. It is a circumstance worthy of record that three great aliens, all organizers rather than idealists, and all statesmen of comprehensive views, were the dominant minds of American finance through all the struggles of our first twenty-five years as a nation, just as alien capitalists had supplied the strongest sinews of the war of 1812. Capable and constantly growing, Crawford was, nevertheless, circumscribed, as Wolcott had been, by the system of a predecessor which, executing with consummate ability, he could, after all, do little more than execute. The war of 1812 was fought under circumstances quite adverse to the United States, and adverse, most of all, in what human wisdom could hardly have foreseen, namely, the sudden and utter downfall of the Napoleon dynasty, because of an idiosyncrasy, the blind fatalism of its founder. The season did not seem ill chosen at first, but so quickly was the whole European skein unravelled, that England's victorious arms were turned against America almost as soon as American troops could fight in earnest. From an intended conquest of Canada, the war became a struggle to maintain in its integrity the territory we already owned. This state of things, however, brought its own compensation. America owed no new debt of gratitude to France, and which, as also the direct tax act, had passed Congress during the last two months of the war.-U. S. Statutes at Large, 1816-1817. 1815-17. LESSONS OF THE WAR. 453 had incurred no responsibility whatever in the good or ill fortune of her misguided ruler. His Leipsic was not ours, nor his Austerlitz. Moreover, with Napoleon crushed and revolutionary France stretched prostrate, weary Europe sought repose. The war for maritime supremacy was over, with the violence used to obtain it, and peace on the Continent laid a rational foundation for the solid superstructure of peace between the United States and Great Britain. The American attitude at the period of the Vienna Congress assured for this country practical advantages with Europe far beyond what the treaty of Ghent in terms professed to confer. We had resisted contumely and wrong; we had negotiated, protested, and then fought for free trade and sailors' rights. Fighting, we had humiliated on the ocean the proudest and, in that day, the most insolent naval power of the world. Precisely this was the guaranty of commerce and commercial respect that our young and rising nation needed, and the only one worth having at all; for England respected courage above all things, and neutral commerce at her loss there could not have been so long as she could make the neutral her fag. Hull, Bainbridge, Decatur, Jones, and Perry negotiated the impressment difficulty better than all the secretaries and envoys since 1790; and of British invaders there was no longer fear after Jackson's siege-guns had spoken at New Orleans. Under the treaty of 1814, in short, the United States of America became completely divested of the colonial attribute and solemnly divorced from Europe. The lessons of this war to the Old World and the New were worth all they cost; which cost, at the most liberal calculation,-apart from the loss of human life incident to all wars,— consisted of a war debt easily paid off afterwards; spoliation claims against a bankrupt emperor, whose liquidation neither frowns nor friendship were likely to have ever procured; the suspension of a foreign commerce; fleeced on both sides of the Channel, and scarcely pursued at all except by violating the decrees of one power for the benefit of another. To sanguine Americans this war administered a wholesome corrective of Jeffersonian maxims. It taught them that passion and selfaggrandizement with nations as with individuals may blunt |