.

I have therefore determined that whilst no useful Government works
already in progress shall be suspended, new works not already commenced
will be postponed if this can be done without injury to the country.
Those necessary for its defense shall proceed as though there had been
no crisis in our monetary affairs.

But the Federal Government can not do much to provide against a
recurrence of existing evils. Even if insurmountable constitutional
objections did not exist against the creation of a national bank, this
would furnish no adequate preventive security. The history of the last
Bank of the United States abundantly proves the truth of this assertion.
Such a bank could not, if it would, regulate the issues and credits of
1,400 State banks in such a manner as to prevent the ruinous expansions
and contractions in our currency which afflicted the country throughout
the existence of the late bank, or secure us against future suspensions.
In 1825 an effort was made by the Bank of England to curtail the issues
of the country banks under the most favorable circumstances. The paper
currency had been expanded to a ruinous extent, and the bank put forth
all its power to contract it in order to reduce prices and restore the
equilibrium of the foreign exchanges. It accordingly commenced a system
of curtailment of its loans and issues, in the vain hope that the joint
stock and private banks of the Kingdom would be compelled to follow its
example. It found, however, that as it contracted they expanded, and at
the end of the process, to employ the language of a very high official
authority, "whatever reduction of the paper circulation was effected by
the Bank of England (in 1825) was more than made up by the issues of the
country banks."

But a bank of the United States would not, if it could, restrain the
issues and loans of the State banks, because its duty as a regulator
of the currency must often be in direct conflict with the immediate
interest of its stockholders. If we expect one agent to restrain or
control another, their interests must, at least in some degree, be
antagonistic. But the directors of a bank of the United States would
feel the same interest and the same inclination with the directors of
the State banks to expand the currency, to accommodate their favorites
and friends with loans, and to declare large dividends. Such has been
our experience in regard to the last bank.

After all, we must mainly rely upon