Chapter 40

But it would not become the government to attempt to extort, or to be illiberal, but to act on the principle of justice to the public and the bank. The legislature should not furnish the bank with either the temptation or excuse of an Irish middle man, who grinds his sub-tenants in proportion as his landlord has pressed him. Upon these principles, we think the government should, by way of bonus, charge the bank a moderate interest on its deposits, and pay a small commission for the services of the bank. An adjustment of these several claims, by some general estimate, might leave to the nation the clear annual gain of perhaps 200,000 dollars, or a gross capital of four millions, instead of giving it away for the improvement of the machinery of our political wire-workers.

There is yet another mode by which the government might derive a profit from the bank, and which has this further recommendation, that it would not be at the expense of the stockholders, and it would be a value saved to the nation that would be otherwise lost. It is now a favourite object both with the people and the government to pay off the national debt; and from the novelty of the phenomenon it will give great eclat to the administration in which it takes place. It is known that upwards of thirteen millions of this debt bears an interest of but 3 per cent. This part of the public funds is held chiefly in Europe by large capitalists, it being preferred by them, because it could not be redeemed but at par, unless with the consent of the holders, and it was hardly expected that the government would choose to redeem it at par rather than pay so low an interest on it. They thus thought that the owners of the stock had the means of postponing its redemption in their own hands. For these reasons this stock has always been something higher in the market than any other, and it now sells at 93 dollars a share of 100 dollars, which is about 3-1/4 per cent. At the price at which the commissioners of the sinking fund are limited, they cannot buy this stock; but when all the rest of the debt is paid, this must come next, and as soon as the government offers to purchase, it will rise still higher, perhaps to par. In that event, the government will have to pay upwards of thirteen millions of dollars, drawn from the pockets of the poor as well as the rich, which they might keep for ever, by paying an annual interest of 3 per cent, or 390,000 dollars.

Now the use of this money, has been of immense advantage to this country, and may continue to be so, considering how inadequately many parts of it are supplied with real capital. It will build ships--erect mills and manufactories--salt works and iron works--and help to make rail roads and canals, by which our free and industrious population will be able to improve the condition of the country in bettering their own. This money, too, does not consist of paper which we can create at will, but of gold and silver, or their equivalents, which we must send out of the country. Had it not better remain here? Every good economist will say yes. It will be not difficult, we should presume, for the government to make an arrangement with the bank to pay this 390,000 dollars, and release us from our obligations, and to receive a less sum than the thirteen millions. Their capital may be enlarged, and the rapid growth of our country will soon require its enlargement. The holders of this stock will indeed have a right to look to the United States for their money, but that would make only a nominal difference, and they might be offered stock of the bank in exchange on advantageous terms. Thus the money which would be appropriated to the payment of this debt, might be kept in the country and be vested in banking capital, by which it would give vigour to commerce, manufactures, and navigation, and, through them, render benefit to the whole nation.