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f.EGlSLATIVE A.\D
DOCUMENTARY
HISTORY OF THE BANKS
UNITED STATES,
FROM THE TIME OF ESTABLISHING THE BANK OF NORTH
AMERICA,
1781,
TO OCTOBER, 1834
:
NOTES AND COMMENTS,
R, K.
MOULTON,
\H
BeiiJsI|oift:
SOLD BV
1).
& C. CARVILL & CO.; HALSTEAD & VOORHIES ;
APPLETON &, CO.; BF.TTS & ANSTICE; AND
CHARLES S. FRANCIS.
G.
1834.
Entered according to an Act of Confrress, in the year 18^4,
by R. K. MocLTON, in the Clerk's Office of tlie "Southern
District of New- York.
PREFACE
In presenting the following pages
lie, the
compiler has deemed
the plan of the work, and
tion of a national
its
it
to the pub-
proper
object.
to explain
The
ques-
bank, and of th© re-chartering
of the present Bank of the United States, having
more or
last
less agitated the
three or four years,
work
to lay
it
community
is
for the
the object of this
before the people such a statement
of facts as the compiler conceives will enable
them
to
form a correct opinion upon the subject.
For the purpose of effecting
compiler has embodied
all
that object, the
the public
documents
considered to be anywise essential, in attaining
a thorough knowledge of the national banking
operations of the country, from the year 1781
to
the present time.
In some instances, the
PKEFACE.
IV
substance only -of public documents
is
given
—
in
other instances, the most important abstracts
from the reports and opinions of public function-
— and
in a
length
and
aries
full
;
few cases, they are given
it
is
believed, that
at
where only
the substance of public documents or extracts
from them are given, the reader
derstand the subject, than
if
will better
given at
The reader may suppose
full
un-
length.
the history of the
banking operations of the country
to
be divided
into four periods
The first, from the establishment of the bank
of North America, 1781,
to the
incorporation of
the first national bank, 1791, included in page
1
and
2.
The second from
national bank,
the establishment of the
1791,
to
the
first
expiration of
its
charter, 1811, included in pages 2 to 46.
The
third,
from the expiration of the charter,
in 1811, of the first national
bank, to the incor-
poration of the present bank of the United States,
April 10, 1816, included in pages 46 to 78.
The fourth from the incorporation of the
PREFACB.
present bank, April 10,
time, included in pages
V
1816,
78
present
to the
to the
close of the
This part also contains the charter of
work.
the present bank, with notes and
comments
to
the 16th fundamental article, and to the 16th
section, in relation to the
posits
and
;
to the
removal of the de-
23d section,
in relation to the
appointment of committees by Congress,
to "in-
spect the books, and to examine into the pro-
ceedings of the corporation."
The
critical
reader will perceive, throughout
the whole work, a want of uniformity in the
capitals,
and
in the
This has arisen
punctuation.
from the work being compiled from various
whom seem
authors, not
any two of
been guided,
in this respect,
some
commencing
the
by
have
to
like principles
words
:
"Congress,"
" Senate," " Bank," &c. with a capital, others
without.
The compiler has attempted
cases to strictly follow the original copies
in
;
all
and
should there be any errors in the work, they
must have escaped
his notice.
R. K. M.
HISTORY,
&e. &f.
-'
Bank of
In tracing the history of the
the
United States, it seems proper to give some
account of that moneyed institution, which, deriving its incipient powers from the general
government, may be considered as the prototype of the corporations which have more recently borne that name.
The Bank of North
America, which was the precursor of that of the
United States, was first incorporated in 1781,
by an ordinance of the continental congress.
Its dependence, however, upon this creating
power, was of short continuance
for, in the
next year, it accepted of a charter from the
State of Pennsylvania, and has since been content to derive its powers from that source."
This institution was established under the
auspices of Robert Morris, a man of great
financial talents, and a delegate to the continental congress, from the Stale of Pennsylvania.
During the year preceding its incorporation, the
:
finances and credit, both of the states and of the
continental congress, were ahuost entirely exhausted.
In order to procure supplies for the
support of the army, congress and several of the
state governments had been obliged to have recourse to the issuing of bills of credit, which was
the principal circulating medium.
These became depreciated in value to almost nothing.
Under these circumstances the continental army
became reduced nearly to a skeleton the necessary articles of clothing and provisions could not
be procured, the soldiers became dissatisfied,
and fears were entertained that the campaign
must terminate in mutiny, or in a relinquishment^
of every thing for which the American people
were then contending. Owing, however, to the
timely aid afforded the financial department of
the government by the establishment of this
bank, confidence was in a great measure restored
to the army, fresh vigour was infused among the
troops, and to it may be principally ascribed the
capture of Cornwallis, the expulsion of the British from the southern states, and the termination
of the conflict that secured the American Inde;
pendence.
Under the confederation the evils arising from
the want of a currency, under some general control, were severely felt, and was one of the
causes that led to the adoption of the federal
constitution.
Upon the organization of our present government, the currency of the country, and the
establishment of the public credit, were among
the first subjects of legislation, that engaged the
accordingly by a resoluof that body of the 9[h of August, 1790,
the Secretary of the Treasury was required to
prepare and report to them such further provision as might, in his opinion, be necessary for
Pursuant to this
establishing the public credit.
resohilion, the Secretary of the Treasury, on
the 13th of December following, made " a report," upon the subject referred to him, in
which he recommended the establishment of a
National Bank. The following extracts from
attention of congress
;
tioii
his report
cipal
upon the subject,
will
show the
prin-
reasons urged by him in favour of the
measure.
"That from
a conviction that a National
primary importance to
the prosperous adniinistralion of the finances,
and would be of the greatest utility in the operations connected with the support of the public
credit, his attention has been drawn to devising
the plan of such an institution, upon a scale
which will entitle it to the confidence, and be
likely to render it equal to the exigencies of the
Previously to enfering upon the detail
public.
of this plan, he intreats the indulgence of the
House towards some preliminary reflections naturally arising out of the subject, which he hopes
will be deemed neither useless nor out of place.
Public opinion being the ultimate arbiter of
every measure of government, it can scarcely
appear improper, in deference to that, to accompaiiy the origination of any new proposition
Bank
is
an
institution of
with explanations which the superior information
of those to whoiti it is immediately addressed.
would render superfluous. It is a fact, well understood, that public banks have found admission and patronage among the principal and
most enlightened commercial niitions. They
have successively obtained in Italy, Germany,
Holland, England, and France, as well as in
the United States.
And it is a circumstance
which cannot but have considerable weight, in
a candid estimate of their tendency, that,
an experience of centuries there exists
not a question about their utility, in the countries, in which they have been so long established. Theorists and men of business unite in the
acknowledgment of it."
"Trade and industry, wherever they have been
tried, have been indebted to them for important
aid.
And government has been repeatedly under the greatest obiigcitions to them in dangerous and distressing emergencies. That of the
United States, as well in some of the most critical conjunctures of the late war, as since the
peace, has received assistance from those established among us, with which it could not
have dispensed."
"With this two-fuld evidence before us, it
might he expected that there would be a perfect
union of opinions in their favour. Yet 'doubts
have been entertained; jealousies and prejuand, though the experidices have circulated
ment is every day dissipating them, within the
spheres in which the effects are best known,
yet there are still persons by whom they have
not been entirely renounced.
To give a full
and accurate view of the subject, would be to
after
;
make
a treatise of a report
;
but there arc cer-
which it may be cursorily exhibited, wliich may perhaps concUice to a just
These will involve a
impression of its merits.
comparison of the advantages with the disadvantages, real or supposed, of such institutions."
tain aspects in
"The following are among the principal advantages of a bank :"
" First, The augmentation of productive capital
of a country.
Gold and silver, when they are
employed merely as the instruments of exchange,
alienation, have been not improperly denominated dead stock; but
become
when
dt^posited in banks,
paper circulation,
which takes their character and place, as the
to
the
basis of a
signs or representations of value, they then aclife, or in other words, an active and productive quality.
This idea, which appears
rather subtle and abstract, in a general form,
quire
,
may be made
obvious and palpable, by entering
few particulars. It is evident for instance, that the money which a merchant keeps
into a
in his chest, waiting for a favourable opportunity
to
employ
produces nothing
it,
that oppor-
till
But if, instead of locking it up
manner, he either deposits in a bank, or
tunity arrives.
in this
it in the stock of ia bank, it yields a profit
during the interval, in which he partakes, or
not, according to the choice he may have made
of being a depositor or a proprietor and when
any advantageous speculation offers, in order to
be able to embrace it, he has only to withdraw
his money, if a depositor, or, if a proprietor, to
obtain a loan from the bank, or to dispose of his
invests
;
6
—
stock,
an alternative selHnni or never attended
with difficulty, when the alniir.s of the institution
are in a prosperous train.
JLs money, thus deposited or invested, is a fund upon which himself and others can borrow to a much larger
amount. It is a well established fact, that
banks in good credit can circuhite a far greater
sum than the actual quantum of their capital in
gold and silver.
The extent of the possible excess seems indeterminate
thougli it has been
conjecturally stated at the proportions of two
and three to one. This faculty is produced in
various ways.
1st, A great proportion of the
notes which are issued, and pass current as
cash, are indefinitely suspended in circulation,
from the confidence which each holder has, that
he can at any moment turn them into gold and
silver,
2dly, Every loan which a bank makes,
is, in its first shape, a credit given to the borrower on its books, the amount of "which it
stands ready to pay, either in its own notes, or
in gold or silver, at his option.
But, in a great
number of cases, no actual payment is made in
either.
The borrower frequently, by a check
or order, transfers his credit to some other person, to whom he has a payment to make ; who,
in his turn, is as often content with similar
credit, because he is satisfied that he can, whenever he pleases, either convert it into cash, or
pass it to some other hand, as an equivalent for
;
And in this manner the credit keeps circulating, performing in every stage the office of
it.
money, till it is extinguished by a discount with
some person who has a payment to make to the
bank, to an equal or greater amount. Thus
large sums are lent and paid, frequently throuj^h
a variety of hands, without the intervention of a
3dly, There is always a
single piece of coin.
large quantity of gold and silver in the repositories of the bank, besides its own stock, which
is placed there, with a view partly to its safe
keeping, and partly to the accommodation of an
institution, which is itself a source of general
These deposits are of imaccommodation.
mense consequence in the operations of a bank.
Though liable to be redrawn' at any moment
experience proves that the money so much
oftener changes proprietors than place, and that
what is drawn out is generally so speedily replaced, as to authorize the counting upon the sums
deposited, as an effective fund, which, concurring
with the stock of the bank, enables it to extend
and to answer all the demands for
whether in consequence of those loans, or
arising from the occasional return of its notes.
its
loans,
coin,
These
different circumstances explain the
ner
which the
in
ability
man-
of a bank to circulate a
greater sum than its actual capital in coin, is
This however, must ^e gradual, and
acquired.
must be preceded by a firm establishment of
confidence
a confidence which may be bestowed on the most rational ground.*;, sinee the
excess in question will always be bottomed on
good security of one kind or another. This,
every well conducted bank carefully requires,
before it will consent to advance either its money
and where there is an auxihary
or its credit,
capital, (as will be tho case in the plan hereafter
—
—
submitted) which, together with the capital in
coin, define tlie boundary that shall not be exceeded by the engaicments of the bank. The
security may, consistently with all the maxims
of a reasonable circumspection, be regarded as
complete.
The same circumstances illustrate
the truth of the position, that it is one of the
properties of banks to increase the active capital of a countr)'.
This in other words is the
sum of them the. money of one individual,
while he is waiting, for an opportunity to employ
it, by being either deposited in the bank for safe
keeping, or invested in its stock, is in a condition to administer to the wants of others, without
being put out of his own reach, when occasion
presents.
This yields an extra profit, arising
from what is paid for the use of his money by
others, when he could not himself make use of
it, and keeps the money itself in a state of incessant activity.
In the almost infinite vicissitudes and competitions of mercantile enterprise, there never can be danger of an intermission of demand, or that the money will remain
for a moment idle in the vaults of the bank.
This additional employment given to money,
and the faculty of a bank, to lend and circulate
a greater sum, than the amount of its slock in
coin, are, to all the purposes of trade and industry, an absolute increase of capital."
'Purchases and undertakings, in general, can
be carried on by any given sum of bank paper
or credit, as effectu;illy as by an equal sum of
And thus, by contributing to
gold and silver.
enlarire the mass of industrious and commercial
:
9
bocome nurseries of national
wealth a consequence as satisfactorily verified
by experience, as it is clearly deducible in
theory."
" Secondly, Greater facility to the jrovernmenf, in obtaining pecuniary aids, especially in
sudden emergencies. This is another, and an
undisputed advantage of public banks one
which, as already remarked, has been realized
enterprise, banks
—
—
in
signal
instances
among
ourselves.
The
reason is obvious; the capitals of a great number of individuals are, by this operation, collected to a point, and placed under one direction.
The mass formed by this union, is, in a
certain sense, magnified by the credit attached
to it; and while this mass is always ready, and
can at once be put in motion, in aid of the government, the interest of the bank to afford that
aid, independent of regard to the public safety
and welfare, is a sure pledge for its disposition
to go as far in its compliances as can in prudence be desired. There is, in the nature of
things, as will be more particularly noticed in
another place, an intimate connexion of interest
between the government and the bank of a
nation."
" Thirdly, The facilitating of the payment of
taxes.
This advantage is produced in tv;o
ways. Those who are in a situation to have
access to the bank, can have the assistance of
loans, to answer, with punctuality, the public
calls upon them.
This accommodation has
been sensibly felt in the payment of the duties
heretofore laid by those who reside where esta-
10
blishments of this nature exist. This, however,
thoiifrh an extensive, is not an universal benefit.
Tiie other way in which the efTect here contemplated is produced, and in which the benefit
is general in the increasing of the quantity of
circulating medjuin, and the quickening of circulation.
The manner in which the fast happens has already been traced. The last may
require some illustration.
When payments are
to be made between difierent places, having an
iiitercoufse of business with each other, if there
happen to be no private bills at market, and
there are no bank notes which have a currency
in both, the consequence is, that coin must be
remitted.
This is attended with trouble, delay,
expense, and risk. If, on the contrary, there
are bar)k notes current in both places, the transniissioo of these by the post, or any other
speedy or convenient conveyance, answers the
purpose and these again, in the alterations of
demand, are frequently returned, very soon
after, to the place from whence they were first
;
sent
:
whence
tlie
transportation and re-trans-
portation of the metals are obviated, and a
more
convenient and a more expeclitious medium of
payment
is
substituted.
Nor
is
this all
:
the
metals, instead of being suspended from their
usual functions during this process of vibration
from place to place, continue in activity, and ad-
minister still to the ordinary circulation which,
of course, is prevented from suffering diminution or stagnation.
Theso circumstances are
additional causes of what, in a practical sense,
or to the purposes of business, may be called
11
greater plenty of money.
And
it is
so evident,
enhances the quantity of circulating money, adds to the ease with which
every industrious member of the community
may acquire that portion of it of which he
stands in need, and enables him the better to
pay his taxes, as well as supply his other wants.
Even where the circulation of the bank paper
is not general, it must still have the same effect,
though in a less degree for, whatever furnishes
additional supplies to the channels of circulation
in one quarter naturally contributes to keep the
streams fuller elsewhere. This last view of the
that whatever
;
subject serves both to illustrate the position that
banks tend to facilitate the payment of taxes,
and to exemplify their utility, to business of
every kind in which money is an agent."
" It would be to intrude too much on the
patience of the House, te prolong the details of
especially, as all
the advantages of banks
those which might still be particularized, ar^ -#
readily to be inferred as consequences from
those which havfe been enumerated."
;
On
the reception, in the senate, of the report,
from which are made the foregoing extracts,
the same was referred to a committee consisting of Messrs. Strong, of Massachusetts; Morris,
of Pennsylvania; Schuyler, of New- York Butler, of South Carolina, and Ellsworth, of Con;
necticut.
12
.
On the 3d of January, 1791, Mr. Strong,
chairman of the committee, reported a bill " To
^corporate the Subscribers to the Bank of the
United States."
The history of this bill, on its passage through
the senate, is to be learned only from the JourIts debates and proceedings
nals of that body.
were not then, as now, open to the public. Such
extracts from tlie Journal as appear to be the
most essential, are herewith given.
A motion was made to subjoin to a certain
clause, the following words, ^^ Provided nevertheThat nothing herein contained shall be con.
strued to exclude the right of amending the
same (the bank charter), on giving twelve
less,
months' notice, from and after the first of JanuIt passed in the negative,
ary, 1800."
(Yeas
and nays not given.)
On
to
the 19th of January, a motion being
section, to wit
made
expunge the r2th
"
And
heit further enacted, That no other bank
be established, by any future law of the
United States, during the continuance of the corporation hereby created, for which the faith of
the United States is hereby pledged."
Passed
(Yeas and nays not given.)
in the negative.
20th January, 1791. On motion to re-consider the term of incorporation, and limit it to
the year 1801 instead of 1811, the vote stood as
shall
follows
Yeas, Messrs. Butler, Few, Gunn, Hawkins,
Izard and Monroe
6.
Nays, Messrs. Basset, Dalton, Dickenson,
—
13
Ellsworth, Elmer, Foster, Johnson, King, Langdon, Maclay, Morris, Read, Schuyler, Stanton,
Strong, and Wright, 10,
Whereupon, Resolved, that this bill do pass.
(The yeas and nays are not given. It is however supposed that the vote was unanimous.)
The bill was then sent to the House for concurrence.
On the 21st of January, 1791, the bill, (in the
house of representatives,) was read a first and
second time, and committed to a committee of
the whole House.
On
the 21st of January the House resolved
a committee of the whole, (Mr. Bou-
itself into
dinot in the chair,) and the bill was read by paragraphs, and no amendments being offered, the
chairman reported it to the House, which voted
that it should be read a third time the next day.
Chief Justice Marshall, in his life of Washing,
ton, says, (vol. v. page 294 to 298,) " on the
final question, a great, and it would seem, 4[MM|
unexpected opposition was made to its passagS^^^
Mr. Madison, Mr. Giles, Mr. Jackson, and Mr.
Stone, spoke against it. The general utility of
banking systems was not admitted, and the
particular bill before the House was censured
on its merits but the great strength of the argument was directed against the constitutional
authority of congress to pass an act for incorporating a national bank."
;
" The government of the United States, it
said, was limited
and the powers which
it might legitimately exercise were enumerated
in the constitution itself.
In this enumeration,
3
was
;
14
the power now contended for was not to be
found.
Not being expressly given, it must be
implied from those which were given, or it could
not be vested in the government.
The clauses
under which it could be claimed were then reviewed, and critically examined
and it was
contended that on a fair construction, no one of
these could be understood to imply so important
a power as that of creating a corporation.
" The clause which enables congress to pass
all laws necessary and proper to execute the
specified powers, must, according to the natural
and obvious force of the terms and the context,
be limited to means necessary to the end, and
incident to the nature of the specified powers.
The clause it was said, was in fact mere declatory of what would have resulted by unavoidable implication as the appropriate, and as it
were technical means of executing those
powers.
Some gentlemen observed, that the
ue exposition of a necessary mean to produce
given end was that mean, without which, the
end could not be produced.'
" The bill was supported by Mr. Ames, Mr.
Sedgwick, Mr. Smith, of South Carolina, Mr.
Lawrence, Mr. Boudinot, IMr. Gerrv, and Mr.
;
'
Vining."
" The utility of banking institutions was said
to be demonstrated by their effects. In all commercial countries they had been resorted to as
instruments of great eflicacy in mercantile
transactions ; and even in the United States,
their public and private advantages had been
felt
and acknowledged."
15
" Respecting the policy of the measure, no
well founded doubt could be entertained ; but
the objections to the constitutional authority of
congress deserved to be seriously considered."
" That the government was limited by the
terms of its creation was not controverted, and
that it could exercise only those powers which
were conferred on it by the constitution was
admitted.
If, on examination, that instrument
should be found to forbid the passage of the
bill, it must be rejected, though it would be with
deep regret that its friends would suffer such
an opportunity of serving their country to escape for the want of a constitutional power to
improve
it."
" In asserting the authority of the legislature
to pass the bill, gentlemen contended, that incidental as well as express powers must necessa-
belong to every government
and that,
i? delegated to effect particular
objects, all the known and usual means of effe<MHB|
rily
;
when a power
To r^^^^
ing them must pass as incidental to it.
move all doubt on this subject, the constitution
of the United States had recognised the principle, by enabling congress to make all laws
which may be necessary and proper for carrying into execution the powers vested in the
government. They maintained the sound construction of this grant to be a recognition of an
authority in the national legislature, to employ
all the known and usual means for executing
They
the powers vested in the government.
then took a comprehensive view of those powers,
and contended that a bank was a known and
16
usual instrument by which sereral of them were
exercised."
" After a debate of great length, which was
supported on both sides with ability, and with
ardour which was naturally excited by the importance attached by each party to the principle in contest, the question was put, and the
bill was carried in the affirmative by a majority of twenty voices."
The following were the ayes and nays on the
" Shall the bill pass."
final question
AYES 39.
Mass.
Messrs. Fisher Ames,
N. Y.
Egbert Benson,
N. J.
Elias Boudinot,
—
—
Benjamin Bourn,
Lambert Cadwallader,
George Clymer,
Thonms Fitzsimmons,
R.
I.
N.J.
Pa.
Pa.
William Floyd,
Abiel Foster,
Elbrige Oerry,
Nicholas Gilman,
N. Y.
N. H.
Benjamin Goodhue,
Mass.
Pa.
Thomas
Hartley,
Mass.
N. H.
John Hathorn,
N. Y.
Daniel Heister,
Benjamin Huntington,
Pa.
Conn.
John Lawrence,
George Leonard,
Samuel Livermore,
Peter Muhlenberg,
George Partridge,
Jerem. Van Rensselaer,
N. Y.
Mass.
N. H,
Pa.
Mass,
N. Y.
17
Messrs. James Shureraari,
Thomas
Scott,
Theodore Sedgwick,
Joshua Seney,
John Sevier,
Roger Sherman,
Peter Sylvester,
Thomas Sinnickson,
William Smith,
William Smith,
John
Steele,
N.
J.
Pa.
Mass.
Md.
C
N.
Conn.
N. Y.
N. Y.
Md.
S. C.
N. C.
Jonathan Sturgess,
George Thatcher,
Jonathan Trumbull,
Conn.
Mass.
Conn.
John Vining,
Jeremiali Wadsworth,
Del.
Henry Wyncoop,
NAYS
Conn.
Pa.
— 19.
Messrs. John Baptiste Ashe,
Abraham Baldwin,
Timothy Bloodgood,
John Brown,
Edanus Burke,
Daniel Carrol,
Benjamin Contee,
Jonathan Grout,
William B. Giles,
James Jackson,
Richard Bland Lee,
James Madison, Jun.,
George Matthews,
Andrew Moore,
Josiah Parker,
N. C.
Geo.
N. C.
Va.
S. C.
Md.
Md.
Mass.
Va.
Geo.
Va.
Va.
Geo.
Va.
Va.
18
.
Messrs. Michael Jenifer Stone,
Thomas Tudor Tucker,
Alexander V/hite,
Md.
S. C.
Va.
Hugh Williamson,
N. C.
The point which had been agitated with so
much zeal in the House of Representatives, was
"
examined not less deliberately by the executive.
The cabinet was divided upon it. The Secretary
of State and the Attorney General conceived
that Congress had clearly transcended their
constitutional powers
while the Secretary of
;
the Treasury, with equal clearness, maintained
the opposite opinion.
The advice of each minister, with his reasoning in support of it, was required in writing."
A perusal of the arguments used on the occa-
by the heads of department would afford
uiuch gratification to the curious, but the limits
prescribed for this work will not permit the introduction of such voluminous papers.
[For an
examinatica of them at full length, the reader is
referred to the "Legislative and Documentary
Histor}' of the Bank of the United States," published at Washington, by Gales
Seaton, 1832,
p. 83 to 112.]
An outline, however, of that train of reasoning
with which each opinion was supported, and on
which the judgment of the executive was most
probably formed, will be briefly stated.
sion,
^
,
&
Opinion of Thomas
"
To
jrcfferson, Secretary of State.
prove that the measure was not sanctioned by the Constitution, the general principle was
asserted, that the foundation of that instrument
19
laid on this ground, " That all powers not
delegated to the United States by the Constitution, nor prohibited to it by the States, are reserved to the States or to the people." To take
a single step beyond the powers thus specially
drawn around the powers of Congress, is to take
possession of a boundless field of power, no
longer susceptible of definition.
The power in question was said not to be
among those which were specially enumerated,
nor to be included within either of the general
phrases which are to be found in the constitution.
The article which contains this enumeration
was reviewed each specified power was analyzed, and the creation of a corporate body was
declared to be distinct from either of them.
The general phrases are,
" 1st, To lay taxes to provide for the general
welfare of the United States.
The power here
conveyed, it was observed, was " to levy taxes."
The purpose was, " the general welfare." Congress could not lay taxes ad libitum, but could
only lay them for "the general welfare;" nor
did this clause authorize that body to provide for
" the general welfare," otherwise than by laying
taxes for that purpose."
Secondly, " To make all laws which shall be
necessary and proper for carrying into execution
the enumerated powers.
But they can all be
carried into execution without a bank.
A bank,
therefore, is not necessary, and consequently,
unauthorized by this phrase."
" It had been much urged that a bank would
give great facility and convenience in the collec-
was
;
tion of taxes.
Suppose
this
were true
;
yet the
20
'constitution allows only the
means which are
necessary, not those whicli are convenient.
If
such a latitude of construction be allowed this
phrase, as to give any non-enumerated power,
it will go to every one
for there is no one
;
which ingenuity may not torture into a convenience, in some way or other, to some one of so
long a list of enumerated powers.
It would
swallow up all the list of enumerated powers,
and reduce the w hole to one phrase. Therefore it was that the constitution restrained them
to necessary means, that is to say, to those means
without which the grant of power would be
-nugatory."
"
The
This
convenience was then examined.
in the report of the secretary
of the treasury to congress, to consist in the
augmentation of the circulating medium, and in
had been stated
transportation and re-transthe states and the
preventing
the
portation of
money between
treasury."
" The first was considered as a demerit. The
second, it was said, might be effected by the
other means.
Bills of exchange and treasury
drafts, would supply the place of bank notes.
Perhaps indeed bank bills would be a more convenient vehicle than treasury orders ; but a little
difference in the degree of convenience cannot
constitute the necessity w^ith which the constitution makes the ground for assuming any non-
enumerated power."
^^
Besides, the existing state banks would, with-
out doubt, enter into arrangements for lending
their agency.
This expedient alone suffices to
prevent the existence of that necessity which
21
may justify the
aesumption of a non-enumerated
power as a means for carrying into effect an
enumerated one. It may be said that a bank
whose bills would have a currency all over the
states, would be more convenient than one
whose currency is limited to a single state. So
still more convenient that there
it would be
should be a bank whose bills should have a cur.
rency all over the world but it does not follow
from this superior conveniency, that there exists
anywhere a power to esiablish such a bank, or
that the world may not go on very well vdthout it."
"For a shade or two of convenience, more
or less, it cannot be imagined that the constitution intended to invest congress with a power so
;
important as that of erecting a corporation."
SnbBtanre of the opinion of the Secretary of the
Treasury in supiiort of the Bill.
In supporting the constitutionality of the act,
laid down as a general proposition, "that
every power vested in a government is, in its
nature, sovereign, and includes by force of the
term, a right to employ all the means requisite
and fairly applicable to the attainment of the
ends of such power
and which are not precluded by restrictions and exceptions specified
in the constitution are not immoral, are not contrary to the essential ends of political society.
it
was
;
This principle, in its application to government
would be admitted as an axiom and
it would bo incumbent on those who might re-
in general,
fuse to acknowledge
afTaira to
;
its
influence in
prove a distinction
;
and
to
American
show that
22
a rule which,
in the
general system of things,
is
essential to the preservation of the social order,
is
inapplicable to the United States.
The
cir-
cumstance that the powers of sovereignty are
divided between the national and state governments, does not aflbrd the distinction required.
It does not follow from this, that each of the portions of power delegated to the one or to the
other, is not sovereign with regard to its proper
objects.
It will not only follow from it, that
each has sovereign power as to certain things,
and not as to other things. If the government
of the United States does not possess sovereign
power as to its declared purposes and trusts,
because its power does not extend to all cases,
neither would the several states possess sovereign power in any case, for their powers do not
extend to every case. According to the opinion
intended to be combatted, the United States
would furnish the singidar spectacle of a political
society without sovereignty, or a people governed
without a government."
" If it could be necessary to bring proof of a
proposition so clear as that which affirms the
powers of the federal government, as to its objects, were sovereign, there is a clause in the
constitution
which
is
decisive.
It is
that
which
declares the constitution of the United States,
the laws made in pursuance of it, and the treaties made under its authority to be the supreme
law of the land, the power which can create
the supreme law in any case, is doubtless sovereign as to such case."
" This general and indisputable principle puts
an end
to
the abstract question,
wJiether the
23
United States have power to erect a corporation j
it is unquestionably incident to sovereign
power to erect corporations, and consetjuently
to tiiat of tlie United States, in relation to the
objects intrusted to the management of the
government. The ditference is this ; where
the authority of the government is general, it
can create corporations i?i all cases ; where it
is confined to certain branches of legislation, it
can create corporations only in those cases.
That the government of the United States can
exercise only those powers which are delegated
by the constitution, is a proposition not to be
controverted neither is it to be denied on the
other hand, that there are implied as well as
express powers, and that the former are as
efiectually delegated as the latter.
For the
sake of accuracy, it may be observed, that there
are also resulting powers.
It would not be
doubted that if the United States should make
a conquest of any of the territories of its neighhours, they would possess sovereign jurisdiction
over the conquered territory.
This would
rather be a result of the whole mass of the
powers of the government, and from the nature
of political society, than a consequence of either
of the powers especially enumerated.
This is
an extensive case in which the power of erecting corporations is either implied in, or would
result from some or all of the powers vested in
the national government."
" Since it must be conceded that implied poweis
are as completely delegated as those which are
expressed, it follows that, as a power of erecting
a corporation may as well be implied as any
lor
;
24
other thing, it may as well be employed as an
instrument or mean of carrying into execution
any of the specified powers as any other instrument or mean whatever. The question in this,
as in every other case, must be whether the
mean to be employed as a natural relation to
any of the acknowledged objects or lawful ends
of the government. Thus a corporation may
not be created by congress for superintending
the police of the city of Philadelphia, because
they are not authorized to regulate the police
of that city ; but one may be created in relation
to the collection of the taxes, or to the trade
with foreign countries, or between the states or
with the Indian tribes, because it is in the province of the federal government to regulate
those objects, and because it is incident to a
general sovereign or legislative power to regulate
a thing,
to
its
to
employ
all
the
means which
regulation, to the best
relate
and greatest ad-
vantage."
" A strange fallacy seems to have crept into the
manner of thinking and reasoning upon this sub'
ject.
The imagination has presented an incorporation as
some
— as a
great,
independent, substan-
end of peculiar mag.
nitude and moment whereas it is truly to be
considered as a quality, capacity, or mean to an
end.
Thus a mercantile company is formed
tive thing
:
political
;
with a certain capital for the purpose of carrying on a particular branch of business.
The
business to be prosecuted is the end.
The association, in order to form the requisite capital
is
the primary
mean.
Let an incorporation be
25
added, and you only add a new quality to that
association which enables it to prosecute the
business with more safety and convenience.
The association wiien incorporated still remains
the mean, and cannot become the end."
"To this reasoning respecting the inherent
rights of government to employ all the means
requisite to the execution of its specified powers,
it is objected, that none but necessary and proper
means can be employed and none can be necessary, but those without which the grant of
So far has this
the power would be nugatory.
restrictive interpretation been pressed as to
make the case of necessity which shall warrant
the constitutional exercise of a power, to depend on casual and temporary circumstances
an idea, which alone confutes the construction.
The expedience of exercising a particular
power, at a particular time, must indeed depend
on circumstances, but the constitutional right of
exercising it must be uniform and invariable.
All the arguments, therefore, drawn from the
accidental existence of certain state banks
which happen to exist to-day, and for aught
that concerns the government of the United
States may disappear to-morrow, must not only
be rejected as fallacious, but must be viewed as
demonstrative that there is a radical source of
error in the reasoning."
" But it is essential to the being of the government that so erroneous a conception of the meaning of the word necessary should be exploded."
" It is certain that neither the grammatical
;
;
4
26
nor popular sense of the term requires that
construction.
According to both necessary
means no more than needful, requisile, incidental, useful, or conducive to.
It is a common
mode of expression to say that it is necessary
for a government or a person to do this or that
where nothing more is intended or understood than that the interests of the govern^
ment or person require, or will be promoted by
doing this or that thing."
" This is the true sense in which the word is
used in the constitution. The whole turn of the
clause containing it indicates an intent to give
by is a liberal latitude to the exercise of specified powers.
The expressions have peculiar
comprehensiveness. They are "to, make all
laws necessary and proper for carrying into
execution the foregoing powers, and all other
powers vested by the constitution in the gcvernment of the United States, or in any depart'
ment or office thereof." To give the word, " necessary," the restrictive operation contended
for, would not only depart from its obvious and
popular sense, but would give it the same force
as if the word absolutely or indlspensahly had
been prefixed to it."
" Such a construction would be"-et endless uno
certamty, and embarrassment.
The cases
must be palpable and extreme in which it
could be pronounced with certainty that, a
measure was absolutely necessary, or one without v/hich a given power would be nugatory.
Tiiere are few measures of any government
which would stand so severe a test. To insist
thing,
27,
upon it would be to make the criterion of the
exercise of an inipHed power a case of extreme
necessity ; which is ratlncr a rule to justify the
overleaping the bounds of constitutional au;
thority than to guvern tiie ordinary exercise
ofit."
" The degree.in whicli a measure is necessary
can never be a
The
test
of the legal rights to adopt
between the measure and the
end; between the nature of the ?nea?i employed
towards the execution of a power, and the object of that power, must be the criterion of
constitutionality, not the more or less necessity
it.
relation
or utility."
" The means by which national exigencies are
be provided for, national inconvenience obviated, and national prosperity promoted, are
of such infinite variety, extent, and complexity,
that there must of necessity be great latitude
of discretion, in the selection and application of
those means.
Hence the necessity and proto
priety of exercising the authority intrusted to a
government on principles of liberal construction.
But if only those means be employed,
without which the power would be nugatory,
not only would this right of selection be taken
away, but in cases where an option of means
existed, it might be urged against the employment of either, that it was not indispensably necessary to the end."
" While, on the one hand, the restrictive interpretation of the word necessary is deemed inadmissible,
it
will not
be contended, on the other,
28
any new and
But it gives an explicit
sanction to the doctrine of implied powers, and
is equivalent to an admission of the proposition that the government, as to its specifed powers
and objects, has plenary and sovereign authority.
that the clause in question gives
independent power.
true that the power to create corporations
Neither is the power
not granted in terms.
to pass any particular law, nor to employ any
of the means by which the ends of the govern,
ment are to be obtained. It is not expressly
It is
is
in cases in which its existence is not
controverted.
For by the grant of a power to
exercise exclusive legislation in the territory
which may be ceded by the states to the United States, it is admitted to pass ; and in
the power " to make all needful rules and regulations respecting the territory or property
given
of the United States" it is acknowledged to
be implied. In virtue of this clause, has been
implied the right to create a government, that
create a body politic or corporation, of
is, to
one that, in its maturity,
the highest nature
will be able itself to create other corporations.
Thus has the constitution itself refuted the argument which contends that, had it been designed to grant so important a power as that of
erecting corporations, it would have been menBut this argument is founded on an
tioned.
exaggerated and erroneous conception of the
It is not of so transcennature of the power.
View,
dent a kind as the reasoniiig supposes.
ed in a just light, it is a mean which ought to
;
29
have been left to implication, rather than an
end which ought to have been expressly granted."
" The power of the government then to create
corporations in certain eases being shown, it
remained to inquire into the right to incorporate a banking company in order to enable the
more effectually to accomplish ends which were
in themselves lawful."
" To establish such a right it would be necessary to show the relation of such an institution
to one or more of the specified powers of govern-
ment."
" It was then affirmed
to have a relation more
or less direct to the power of collecting taxes,
to that of borrowing money, to that of regulating trade between the states, to those of raising,
supporting, and maintaining fleets and armies ;
and in the last place to that which authorizes
the making of all needful rules and regulations
concerning the property of the United States,
as the same had been practised upon by the
government."
The Secretary of the Treasury next proceeded,
by a great variety of arguments and illustrations, to prove the position that the measure iu
question was a proper mean for the execution
of the several powers which were enumerated,
and also contended that the right to employ it
resulted from the whole of them taken together.
To detail those arguments would occupy too
much space, and is the less necessary because
their correctness obviously depends on the cor-
30
rectness of the principles which have been
al-
ready stated.
MarshalVs Life of Washington,
vol. .5, Appendix No. 3.
The opinion of each minister wag considered
by the President with all that attention which
the magnitude of the question, and the interest
taken in it by the opposing parlies, so eminently
required.
This deliberate investigation of the
subject terminated in a conviction, that the constitution of the United States authorized the
measure, and the sanction of the Executive was
given to the act by George Washington, July
Substance of MarshalVs Life of
25, 1791.
Washington,
v. 5,
p. 297.
About the time the bank went into operation,
This event
the French revolution broke out.
produced an increased demand, and an increased
price for our agricultural productions.
Owing
to the facilities aflbrded by the bank to the
trading community, added to the judicious provisions of the act of congress of July 20, 1790,
imposing a duty of 50 cents a ton upon all foreign vessels, entering any port of the United
States, while a duty of only six cents a ton was
on American built vessels, and owned
wholly by a citizen or citizens of the United
States, the products of our soil, which had before been in a languishing condition, met with a
and our commerce,
brisk and profitable sale
about one half of which had before been engrossed by foreigners, was almost exclusively
secured to our own citizens. In the language
of Doctor Seybert, the system seemed to opelaid
;
31
rate like
magic
in favour
of the shipowners of
the United States.
Great advantages, and hencficial results, in
consequence of the establishment of a National
Bank, were generally experienced by the government, and by every class of community,
—
—
during the continuance of its charter, the
public funds were kept in a safe depository,
the
credit of the nation was established upon a firm
and solid basis, the demands of public creditors were promptly paid, at places convenient
—
them, and
a currency equal to gold or
profit of
8671,800 on tlie sale of two millions of its stock.
A salutary restraint was exercised upon state
banks, as to the amount of their issues, and as
to a failure in promptly redeeming their bills
in specie.
A reasonable amount of circulating
to
silver,
—the
in
government realized a
—
—
medium was
afforded to the community, whereby the industry of the country was brought into
profitable and successful operation, and a steady,
uniform, and safe currency was afix)rded to every
one.
The
business done hi/ the bank, afforded a
profit to the stockholders ; the average annual dividends from the commencement
of the establishment, to January 1st, 1809, inclusive, amounting to eight and two-thirds per
handsome
centum.
The
1811.
corporation expired on the 4th of March,
32
The amount of capital was refunded to the
viz
stockholders in the followinc; instalments,
70 per cent.
On the 1st of June, 1812,
1st of October, 1812, 18
7
1st of April, 1813,
5
3dof April, 1815,
—
:
100 per cent.
1817, a further
dividend of 4 per centum was made
another
dividend was to be made, the amount of which
has not been ascertained.
On the 4th of March, 1S16, it was stated, that
of the notes issued by the bank and its several
branches, there remained in circulation
of post and bank notes,
$76,603
140,557
bank notes,
On
the 28th of February,
:
Dollars, 217,160
It
was supposed
had either been
that the greater part of these
lost or destroyed, and would
never be presented for payment.
On the 26th March, 1808, a memorial of the
stockholders of the Bank of the United States,
petitioning for a renewal of their charter, was
presented to the house of representatives.
The
subject was not definitely acted upon during the
session.
On the 20th of April, 1808, a similar
memorial was presented to the senate of the
United States, who ordered " that the same
be referred to the Secretary of the Treasury,
to consider and report thereon at the next ses.
sion of congress."
33
On the 2d of March, 1809, Mr. Gallatin, then
Secretary of the Treasury, made a report upon
and in favour of a renewal of the
the subject
charter.
After giving a detailed statement of
the general operations of the bank, he says
"It sufliciently appears from that general view,
that the afi'airs of the bank of the United States,
considered as a moneyed institution, have been
wisely and skilfully managed."
"The advantages derived by government
from the bank, are nearly of the same nature
•with those obtained by individuals, who transact
business with similar institutions, and may be
reduced to the following heads."
1st. " Safe keeping of the public moneys. This
applies not only to moneys already in the Treasury, but also to those in the hands of the principal collectors, of the commissioners of the
loans, and of several other officers, and affords
one of the best securities against delinquen;
cies."
2d. " Transmission of public moneys.
As
the
collections will always, in various quarters of
the extensive territory of the Union, either ex.
ceed or
same
fall
short of the expenditures in the
places, a perpetual transmission of
money,
of remittances at the risk and
expense of the United States, would become
necessary, in order to meet those demands ;
but this is done by the bank at its own risk and
expense, for every place where one of its
or purchase
branches is established, which embraces all
payments of any importance."
3d. " Collection of the revenue.
The punctu-
34
of payments, introduced by the banking
system, and the facihties afibrded by the bank
to the importers indebted for revenue bonds,
are amongst the causes which have enabled the
United States to collect with so great facihty,
and so few losses, the large revenue derived
from the impost."
4th. " Loans. Although the prosperity of past
years has enabled government, during the present administration, to meet all the public deality
mands, without recurring to loans, the bank
had, heretofore, been eminently useful in making the advances, which, under different circumstances, were necessary.
There was a
time when, exclusively of the six per cent, stock
held by the institution, as a part of the original
subscription, the loans obtained by government
from the bank amounted to 6,200,000 dollars.
And a similar disposition has been repeatedly
evinced, v/henever the aspect of public affairs
has rendered it proper to ascertain whether
new loans might, if wanted, be obtained."
"
The numerous banks now
established, under
the authority of the several states, might, it is
true, afford considerable assistance to governin its fiscal operations.
There is none
however, which could effect the transmission of
public moneys with the same facility, and to the
same extent, as the Bank of the United States
is enabled to do, through its several branches.
ment
The
also
superior capital of that institution offers
a greater securhy against any possible
losses,
and greater resources
loans.
Nor
is it
in
eligible, that the
relation
to
general go-
35
vernment should,
in respect to its
own
opera-
be entirely dependent on institutions
A
over which it has no control whatever.
National Bank, deriving its charter from the
national legislation, will, at all times, and under
every emergency, feel stronger inducements,
both from interest and from a sense of duty,
to aflibrd to the Union every assistance within
its power."
The Secretary of the Treasury then suggests
some modifications of the original charter.
One of which was, that the bank pay a bonus
The reasons
to government of 81,250,000,
offered in favour of that measure was, that the
bank had, and perhaps would declare, an annual
dividend of 8i per cent., being a difference of
2i per cent, between the annual bank dividends, and the market value of money,
this
excess of interest, would amount, in twenty
This amount,
years, to about 82,390,000.
however, (says Mr. Gallatin,) would be much
more than any bank would give for a charter,
as it would leave it nothing but the right of
dividing six per cent, a year, which the stockholders have without a charter.
The Secretary of the Treasury further suggcsted that in tlie event of no bonus being paid,
and as a general measure of public utility.
" That the bank should pay interest to
I.
the United States, on the public deposits, whenever they shall exceed a certain sum which
miiiht perhaps be fixed at about three millions
of dollars."
II. " That the bank should be bound, whentions,
—
36
ever required, to lend to tlie United States a
not exceeding three fifths of its capital, at
a rate of interest not exceeding six per cent.
the amount of such loan or loans to be paid by
the bank in instalments, not e!Cceeding a certain
sum, monthly, and to be reimbursed at the pleasure of the government."
III. " That the capital stock of the bank
should be increased to thirty millions of dollars
sum
in the following
"Five
1st,
manner,
viz.
million of dollars to be subscribed
by citizens of the United States, under such
regulations as would make an equitable apportionment amongst the several states and
terri-
tories."
2d, " Fifteen millions to
be subscribed by
and under such
equitable apportionment amongst the several
states as may be provided by law
and a
branch to be established in each subscribing
such
states as
may
desire
it,
;
state, if applied for
3d, "
by the
The payments,
state."
either
by individuals or
be either in specie or in public stock
of the United States, at such rates as may be
provided by law."
4th, " The subscribing states to pay their
states, to
subscription in ten annual instalments, or sooner
convenience, but to receive divionly to the amount of subscription actually paid; and their share of bank
stock not to be transferable."
IV. " That some share should be given in
the direction to the general and state govern,
ments
the general government appointing a
i( suits their
dends
in proportion
;
37
few directors in the general directions, and the
government of each subscribing state capital
appointing a few directors in the direction of
of the branch established in such state."
The senate do not appear to havo acted upon
the subject during this session.
On
December, 1810, the subject
the 18th of
was referred
senate to a select committee
Crawford, (Ga.) Leib,
(Pa.) Lloyd, (Mass.) Pope, (Ky.) and AnderOn the 29th January, 1811, the
son, (Ten.)
committee addressed a note to the Secretary
of the Treasury, requesting him, among other
things, " to furnish the committee with the facts
and reasonings upon which his opinion has been
formed, together with such other information
upon the subject, as might be in his possession."
On the 30th of January, 1811, the Secretary
of the Treasury addressed a letter to the committee, giving some additional views in favour
of a re-charter of the bank, and closed his communication by saying, " the continuation of a
bank of the United States, has not, in the view
which I have been able to take of the subject,
in the
consisting of Messrs.
appeared
On
to
me
to
be unconstitutional.
the 5th of February, 1811, Mr. Crawford
reported a
an act
bill to
amend and continue
"An
Act
in force,
incorporate the
subscribers to the Bank of the United States :"
also a copy of the letter (aforementioned) of the
Secretary of the Treasury, of the 30th of January, 1811.
entitled,
5
to
38
The provisions of the bill are said to have
been, in a great measure, conlbrmable to the
views of the Secretary of the Treasury. The
question on the passage of the bill was debated
with warmth and animation for several days.
The principal speakers in its favour were
Crawford (late Secretary of the Treasury)
Lioyd, (Mass.) Pope, (Ky.) Pickering, (Mass.)
and Taylor, (S. C.) Those in opposition v.'ere
Anderson, (Ten.) Smith, (Md.) Leib, (Pa.)
Giles, (Va.) and Clay, (Ky.)
For a perusal of the speeches delivered on
the occasion, the reader is referred to " Legislative and Documentary History of the Bank of
Seaton, p. 302
the United States," by'Gales
to 446.
Those opposed to a re-charter, urged that the
creation of corporations was not authorized by
the constitution, and that the bank was uncon-
—
&
—
that the article in the constitution
stitutional
giving congress authority " To make all laws
which shall be necessary and proper for carry,
ing into execution" the delegated powers, did
not warrant the establishment of a bank that a
bank was not "necessary" in the sense of the
constitution, to carry into effect the collection of
that state banks could be employthe revenue
ed as a public depository that the bank was an
aristocratic institution, and calculated to acquire
an influence, inimical to our republican instituthat foreigners held a large amount of
tions
the stock, and in case of war, the stockholders
might exercise an influence dangerous to the
government that state banks could supply all
—
—
—
—
—
39
wants of government on any emergency,
and that the resources of the country, added to
the patriotism of the people, were a sufficient
guaranty against sudden embarrassments.
Those in favour of a re-charter urged, that the
right of the national government to charter a
bank, as a fiscal agent to the government, was
clearly one of the incidental powers of congress
that Mr. Jefferson, who was at first strenuously opposed to it upon constitutional
grounds, had virtually assented to its constitutionality, by signing a bill establishing a branch
That the bank was indispenat New-Orleans.
the
—
—
sably necessary to the successful operations of
the Treasury that as congress had no control
over the state banks, the government would be
subject to such regulations as they might prescribe, and moreover that the public funds
might not always be safe in such institutions.
That inasmuch as the general government would
have a reasonable control over a bank of their
own creation, it would exercise a salutary influence over state banks, in restraining them
from an excessive issue, and from failing to
promptly redeem their bills in specie that the
idea of a bank being an aristocratic institution,
was wholly fallacious, inasmuch as the stock
was owned by any one who might wish to purchase it ; and that self-interest alone, on the
part of the bank, would restrain it from entering
into any combination, unfriendly to the interests
and liberties of the people, and that of itself
was a sufficient guaranty to the people on that
—
—
40
—
head that it was impossible for foreign stockholders to exercise any direct or indirect influence, inasmuch a? they could not even vote
for directors, and that in case of war, foreigners
would furnish us with the necessary weapons to
fight them with
that Avisdom and prudence
dictated the policy of fostering, as far as possible, all our moneyed resources, preparatory to a
war in which we might be engaged, and with
which we were then threatened, by the great contending powers of Europe
that in the event
of a war, and without a national bank, the
United States would be destitute of the necessary
means to carry it on that no reliance could be
placed upon state banks, and that the government would be completely at the mercy of
speculators.
On the 20th of February, 1811, the question,
on a motion of Mr. Anderson, to strike out the
enacting clause, was decided as follows :
—
—
—
Those who voted
Messrs. Anderson,
Campbell,
Clay,
Cutts,
Franklin,
Gaillard,
German,
Giles,
Whiteside,
were,
in the affirmative
Messrs. Gregg,
Lambert,
Leib,
Mathewson,
Reed,
Robinson,
Smith, (of
Maryland)
VVorthington.
17
41
Those who voted
in the
Messrs. Bayard,
Bradley,
Brent,
Champlin,
Condict,
Crawford,
negative were,
Messrs. Horsey,
Lloyd,
Pickering,
Pope,
Smith, (of
New- York)
Dana,
Tait,
Gilman,
Goodrich,
Turner, and
17
Taylor.
—
The
senate being equally divided, the Pre-
sident,
(George Clinton,) determined the ques-
;
first submitting to the
senate the following prefatory remarks
" Gentlemen, As the subject on which I am
tion in the affirmative
:
called upon to decide, has excited great sensimust solicit the indulgence of the senate
whilst I briefly state the reasons which influence
my judgment. Permit mo to observe, that the
bility, I
question to be decided does not depend simply
upon the right of congress to establish, under
any modification, a bank, but upon their power
to establish a national bank, as contemplated by
this bill. laother words, can they create a body
politic and corporate, not constituting a part of
the government, nor otherwise responsible to it,
but by forfeiture of charter, and bestow on its
members privileges, immunities, and exemptions,
not recognised by the laws of the States, nor
enjoyed by the citizens generally ?
"
pass
It
all
cannot be doubted that congress may
necessary and proper laws for carrying
42
iato execution the
powers specifically granted
to
the government or to any department or officer
thereof; but, \n doing so, the means must be
The power
suited and subordinate to the end.
not expressly granted ;
it is a high attribute of sovereignty, and in its
nature not accessorial or derivative by implication, but primary and independent.
" I cannot believe that this interpretation of
the constitution will, in any degree, defeat the
purpose for which it was formed on the contrary, it does appear to me that the opposite exposition has an inevitable tendency to consolidation, and atiords just and serious cause of
alarm.
" In the course of a long life, I have found
that government is not to be strengthened by
an assurhption of doubtful powers but by a wiso
and energetic execution of those which are inthe former never fails to produce
contestible
to create corporations
is
;
;
;
suspicion and distrust, whilst the latter inspires
respect and confidence.
" If, however, after a fair experiment, the
powers vested in the government shall be found
incompetent
which
it
to the attainment
was
of the objects for
instituted, the constitution happily
mean
for remedying the evil by
have no doubt that, in such
event, on an appeal to the patriotism and good
sense of the community, it will be wisely
furnishes the
amendment, and
I
applied.
" I will not trespass upon the patience of the
senate any longer than to sa}', from the best
exarnination I have been able to give the sub-.
43
am constrained, by a sense of duty, to
decide in the affirmative ; that is, that the first
section of tlie bill be stricken out."
It may be worthy of remark, that the bank of
1791, was incorporated by the then federal
party ; that on the political revolution of 1800,
the question became identified, in some measure, with the political parties of the day, and
that two, (Mr. Jefferson and Mr. Madison,)
among the early, and most strenuous opposers
of the measure, had successively filled the
executive chair. How far these considerations
affected the final destiny of the bank, the reader must judge for himself: doubtless, they
were not without their influence. The seventeen who voted in favour of striking out the
enacting clause, are said to have all belonged
to the political party called " Democrats." Of
the seventeen who voted in the negative, six
are said to have been " Federalists," and eleven
" Democrats," among whom was Mr. H. Wm.
ject, I
Crawford, Secretary of the Treasury under Mr.
Monroe, and late a candidate for the presidency
of the United States.
Proceedings in the House of Representatives.
January 29, 1810.
motion of Mr. Seybert, Ordered, That the
memorial of the stockholders of the Bank of the
United States, presented on the 26th March,
1808, be referred to Mr. Montgomery, Mr.
Dana, Mr. Basset, Mr. Seybert, Mr. Gold, and
On
44
Mr. Taylor, to consider and report thereon to
the House.
On the 19th February, ISIO, Mr. Montgomery, from the committee appointed on the 29th
ultimo, made a report upon the subject referred
to
them, accompanied with the Resolution, viz.
" That it is. proper to make provision for
continuing the establishment of the Bank of
the United States, with offices of discount and
deposite, under the regulations necessary for
the beneficial administration of the national
finances, during such time and on such conditions, as may be defined by law.
" February
'22d,
Mr. Love moved the
1810.
following resolution,
" Resolved, That
it
is
expedient to inquire into
the propriety of establishing a National Bank,
which was referred to a committee of the whole
house."
" March 22d, 1810, On motion of Mr. Love,
Ordered, That the committee of the whole
house be discharged from the consideration of
the forgoing resolution, and that the same be
referred to Mr. Love, Mr. Montgomery, Mr.
Smilie, Mr. Quincy, Mr. Desha, Mr. Root, and
Mr. Marion."
" April 2d, 1810, Mr. Love, from the committee appointed March 22d, 1810, of which he
was chairman, made a further report, accomBill to establish a National
panied with a
'
Bank.'"
Some amendments and
bill
were offerwas taken upon the
additions
ed, but no definite question
during this session of congress.
45
Eleventh Congress. Third Session,
December 19, 1810.
"Mr. Findly presented a petition of the stockholders of the Bank of the United States, pray,
ing the renewal of the charter of incorporation,
which was read, and ordered to be refered to a
select committee, of which Mr. Burwell was
chairman."
January 4, 1811.
Mr. Burwell, from said
committee, reported a bill, with certain modifications, continuing, for
charter of the
Bank of
a further time,
the
the United States.
It seems that the bill reported by Mr. Love,
during the preceding session of congress, was
abandoned. The provisions of the bill reported by Mr. Burwell, required of the bank, in addition to the obligations contained in the charter of 1791, to pay a bonus to government of
one million two hundred and fifty thousand
dollars, to loan to the government, at any one
time, on three months' notice, a sum not exceeding five millions of dollars, and at a rate of
interest not exceeding six per cent. The bank to
pay interest of three per cent, on government
deposites exceeding
millions of dollars.
That the United States be authorized to increase
the capital of said bank, and be the owner of
the same in a sum not exceeding
and
that the twelfth section of the charter of 1791,
pledging the faith of the nation to incorporate
no other bank, be repealed.
The bill was debated in the house of representatives from the 4th to the 24th of January,
,
46
1811, when ©n a question of indefinite postponement, there were for the affirmative, 65
for the negative, 64
so the Bill was lost by a
majority of one vote.
The arguments in the House both for and
against the bill, were similar to those in the
;
senate.
The Bank Charter expired on the 4th of
March, 1811. In the month of June, 1812, the
general government declared war against Great
Britain, and in a short time, more than all the
disasters to the country, predicted by the sup.
porters of the bank, in consequence of its dissolution, were verified. We soon learned, from
sad experience, that although pretended wise
form new plans of finance on
paper, which, to some would appear quite plausible
still on trial, like Redheffer's perpetual
motion, one, and the most essential thing, was
wanting the machinery would not work. For
a faithful history of the consequences arising to
the government, and to the country in general,
on account of the want of an institution, which
only could preserve a sound circulating medium, the attention of the reader is particularly
invited to the following extracts from the " Report of Committee of Ways and Means," made
in congress, April 13, 1830.*
legislators could
;
—
* It
may be worthy of remark, that the committee are said
have been unanimous in their report, and that a majority
of them were supporters of President Jackson, or what were
to
teraied, "
JacksoumeH."
47
" In less than three years after the expiration
of the charter the war with Great Britain
having taken place in the mean time the cir-
—
—
culating medium became so disordered, the
public finances so deranged, and the public
credit so impaired, that the enlightened patriot,
Mr. Dallas, who then presided over the Treasury Department, with the sanction of Mr. Madison, and, as it is believed, every member of
the cabinet, recommended to congress the establishment of a national bank, as the only measure by which the public credit would be revived, and the fiscal resources of the government redeemed from a ruinous, and otherwise
incurable embarrassment
and such had been
the impressive lesson taught by a very brief,
but fatal experience, that the very institution,
which had been so recently denounced and rejected by the republican party, being now recommended by a republican administration, was
carried through both branches of congress, as a
republican measure, by an overwhelming majority of the republican party.
It is true that
Mr. Madison did not approve and sign the Bill
which passed the two Houses, because it was
not such a bill as had been recommended by
the Secretary of the Treasury, and because the
bank it proposed to create was not calculated,
in the opinion of the President, to relieve the
necessities of the country.
But he premised
his objections to the measure, by " waving the
question of the constitutional authority of the
legislature to establish an incorporated bank, as
being precluded, in his opinion, by repeated re:
48
cognitions, under varied circumstances,
validity of
such an
of the
institution in acts of the le-
executive, and judicial branches of
the government, accompanied by indications, in
gislative,
different
modes, of a concurrence of the general
will of the nation.
" Another bill was immediately introduced,
and would, in all probability, have become a
law, had not the news of peace, by doing away
the pressure of the emergency, induced congress
to suspend further proceedings on the subject
until the ensuing session.
At the commencement of that session, Mr. Madison invited the
attention of congress to the subject, and Mr.
Dallas again urged the necessity of establishing
a bank to restore the currency, and facilitate
the collection and disbursement of the public
revenue and so deep and solemn was the conviction, upon the minds of the public functionaries, that such an institution was the only practicable means of restoring the circulating medium to a state of soundness, that, notwithstanding the decided opposition of all the state banks
and their debtors and, indeed the whole debtor
class of the community, the act incorporating
;
;
the present Bank of the United States was passed by considerable majorities in both branches
of congress, and approved by Mr. Madison.
" This brief history of the former and present
bank forcibly suggests a few practical reflections.
It is to be remarked, in the first place,
that, since the adoption of the constitution, a
bank has existed, under the authority of the
federal government, for thirty-three out of forty
49
during which time, public and private
been maintained, at an elevation
equal to what has existed in any nation in the
whereas, in the two short intervals,
world
during which no national bank existed, public
and private credit were greatly impaired, and,
in the latter instance, the fiscal operations of
the government were almost entirely arrested.
In the second place, it is worthy of special
notice, that, in both the instances in which
congress has created a bank, it has been done
under circumstances calculated to give the
highest authority to the decision.
The first instance, as has already been remarked, was in
the primitive days of the republic, when the
patriots of the revolution, and the sages of the
federal convention, were the leading members
both of the executive and legislative councils
years
;
credit have
:
;
and when General Washington, who at the head
of her armies, had conducted his country to independence, and at the head of the convention,
had presided over those deliberations which
resulted
in
the establishment of the
was
present
acknowledged President of
a people, undistracted by party divisions. The
second instance was under circumstances of a
constitution,
the
very different, but equally decisive character.
We find the very party, which had so recently
defeated the proposition to renew the charter of
the old bank, severely schooled both by adversity and experience, magnanimously sacrificing
the pride of consistency, and the prejudices of
party, at the !?hrine of patriotism.
It may be
said, without disparagement, that an assembly
6
50
of higher talent and purer patriotism has never
existed, since the days of the revulution, than
the congress by which the present bank was inIf ever a political party existed,
corporated.
of which it might be truly said, that " all the
ends they aimed at were their country's," it
was the republican party of that day. They
had just conducted the country through the
perils of a war, waged in defence of her rights
and honour, and elevating their views far above
the narrow and miserable ends of party strife,
sought only to advance the permanent happiIt was to this great end,
ness of the people.
that they established the present bank.
" In this review, it will be no less instructive
than curious, to notice some of the changes
made in the opinions of prominent men, yieldMr. Maing to the authority of experience.
dison, who was the leading opponent of the
bank created in 1791, recommended and sancand Mr. Clay,
tioned the bank created in 1816
who strenuously opposed the renewal of the
charter, 1811, as strenuously supported the proposition, to grant the charter, 1816.
" Soon after the expiration of the charter of
the first Bank of the United States, an immense
number of local banks sprung up under the pecuniary exigencies produced by the withdrawal
of so large an amount of bank credit, as necessarily resulted from the winding up of its concerns
an amount falling very little short of
These banks being
fifteen millions of dollars.
;
—
entirely free
Bank of
from salutary control, which the
the United States had recently exer-
51
cised
over the
local institutions,
commenced
system of imprudent trading and excessive
issues, which speedily involved the country in
all the embarrassments of a disordered currency.
The extraordinary stimulus of a heavy war expenditure, derived principally from loans, and a
corresponding multiplication of local banks,
chartered by the double score in some of the
States, hastened the catastrophe which must
have occurred, at no distant period, without
The last year of
these extraordinary causes.
thai
the
war presented
the singular
and melancholy
spectacle of a nation abounding in resources, a
people abounding in self-devoting patriotism, and
very brink of avowed
want of a national in.
stitution, which, at the same time that it woxdd
have facilitated the government loans and other
treasury operations, would have furnished a circulafing medium of general credit in every part of
the Union. In this view of the subject, the committee are fully sustained by the opinion of Mr.
Dallas, then Secretary of the Treasury, and by
the concurring and almost unanimotis opinion of
for whatever diversity
all parties in congress
of opinion prevailed, as to the proper basis and
organization of a bank, almost every one agreed
that a national bank, of some sort, was indispensably necessary to rescue the country from
the greatest of financial calamities. The committee will now present a brief exposition of the
state of the currency at the close of the war
of the injury which resulted from it as well as
and
to the government as to the community
a government reduced
hankntptcy, solely for
to the
the
:
:
:
52
it could not have
sound condition, and cannot
their reasons for believing that
been restored
now be
to a
preserved in that condition, without the
institution as the Bank of the
agency of such an
United States.
" The price current appended
to
this
report
will exhibit a scale of depreciation in the local
currency, ranging, through various degrees, to
twenty, and even twenty-five per cent. Among
the principal eastern cities, Washington and
Baltimore were the points at which the depreciation was the greatest.
The paper of the
banks in these places was from twenty to twenAt Philadelphia,
ty-two per cent, below par.
the depreciation was considerably less, though,
even there, it was from seventeen to eighteen
percent.
In New-York and Charleston, it was
from seven to ten per cent. But in the interior
of the country, where banks were established,
the depreciation was even greater than at
Washington and Baltimore. In the western
part of Pennsylvania, and particularly at PittsThese
burgh, it was twenty-five per cent.
statements, however, of the relative depreciation
of bank paper, at various places, as compared
with specie, give a very inadequate idea of the
enormous
evil inflicted
upon the community by
the excessive issues of bank paper.
"
very serious evil already hinted at, which
grew out of the relative depreciation of bank
paper, at the diflerent points of importation,
A
its inevitable tendency to draw all the importations of foreign merchandise to the cities
where the depreciation was the greatest, and
was
divert
them from those where the currency was
53
comparatively sound. If the Bank of the
United States had not been established, and
the government had been left without any alternative but to receive the depreciated local currency, it is difficult to imagine the extent to
which the evasion of the revenue laws would
have been carried. Every State would have
had an interest to encourage the excessive
issues of its banks, and increase the degradation of its currency, with a view to attract
foreign commerce. Even in the condition which
the currency had reached, 1816, Boston, and
New-York, and Charleston, would have found
advantageous to derive the supplies of foreign
merchandise through Baltimore and commerce
would, undoubtedly, have taken that direction,
had not the currency been corrected. To avoid
this injurious diversion of foreign imports, Massachusetts, and New-York, and South Carolina,
would have been driven, by all motives of selfdefence and self-interest, to degrade their res-
it
;
pective currencies at least to a par with the
currency of Baltimore ; and thus a rivalry in
the career of depreciation would have sprung
As the
up, to which no limit can be assigned.
tendency of this state of things would have
been to cause the largest portion of the revenue
to be collected at a lew places, and in the most
depreciated of the local currency, it would have
followed that a very small part of that revenue
would have been disbursed at the points where
it was collected.
The government would consequently have been compelled to sustain a
6*
54
heavy
loss
opon the transfer of
its
funds to the
The annual loss which
points of expenditure.
would have resulted from these causes alone
cannot be estimated
at
a less
millions of dollars.
" But the principal loss
sum than
two
which resulted from
the relative depreciation of bank paper at different places, and its want of general credit, was
that sustained by the community in the great
The exoperations of commercial exchange.
tent of these operations annually, 7nay le safely
Upon this
estimated at sixty millions of dollars.
sum the loss sustained by the merchants, and
and farmers, and manufacturers, was
probably, less than an average of ten per
cent., being the excess of the rate of exchange betwee?! its natural rate, in a sound state of the
currency, and beyond the rate to which it has been
planters,
not,
actually reduced by the operations of the Bank
of the United States. It will be thus perceived,
an annual tax of six millions of dollars was
from the industrious and productive
classes by the large moneyed capitalists in our
commercial cities, who were engaged in the
business of broke rage.
" It is impossible to form any thing like an
accurate estimate of the injuries and losses sustained by the community, in various ways, by
the disorders and fluctuations of the currency,
in the period Avhich intervened between the expiration of the old bank charter, and the estaBut some tolerblishment of the present bank.
able notion may be formed of the losses sustained
that
levied
55
by the government
in its fiscal operation
during
the war."*
" The committee have given this part of the
subject an attentive and careful examination ;
and they cannot estimate the pecuniary losses
of the government, sustained exclusively for
the want of a sound currency and an efficient
system of finance, at a sum less than fortv-six
MILLIONS OF DOLLARS. If they shall make this
apparent, the House will have something like a
* Durinsc the period here alluded to by the committee, the
compiler of this worli held the office, under the government
of the United States, of collector of direct taxes and internal
duties, for the twenty-seventh collection district of the state
of New- York; and can hear ample testimony, from his own
experience, of the disordered state of the currency. In hia
district, such was the want of confidence, at particular times,
in the usual circulating medium, that a person receiving a
dollar hill in tlie morning, would part with it, if possible, before
noon if received at noon, he would part with it before night.
For the purposes of small change, individuals issued their
own bills, from 2 to S?^ cents the possession of a piece of
coin, say a 6, 25, or 50 cent piece, was almost a curiosity ; and
such was the want of confidence in what passed for money,
that a person could scarcely travel from one town to another,
with the same hills. The compiler was required by tlie Secretary of the Treasury', to receive no bills in the payment of
taxes or duties, except such as were current, and would be
received in deposit at the banks in the city of iVew-York ; and
—
—
he has frequently known a poor man, who kept a small
grocery or tavern, for the support of himself and family, on
paying from fifteen to twenty-five dollars for a license, bo
obliged to pay a discount of 5 to 15 per cent, on \That he received as money at par, in order to furnish me with such
money as I could receive. This state of things continued in
a greater or less degree, until the year 1818, when the United
since which
States Bank came into successful operation
time, mutual confidence and a sound circulating medium has
generally pervaded the whole community.
;
56
standard for estimating the individual losses of
the community."
" The govei'nment borrowed, during the short
period of the war, eighty milHons of dollars, at
an average discGunt of fifteen per cent., giving
certificates of stock, amounting to eighty millions
of dollars, in exchange for sixty-eight millions
of dollars, in such bank paper as could be obIn this statement, treasury notes are
considered as stock, at twenty per cent, discount.
Upon the very face of the transaction, therefore,
there was a loss of twelve millions of dollars,
which would, in all pi'obability, have been saved,
if the treasury had been aided by such an instiBut
tution as the Bank of the United States.
the sum of sixty-eight millions of dollars, received by the government, was in a depreciated
currency, not more than half as valuable as that
in which the stock given in exchange for it, has
been and will be redeemed. Here, then, is
another loss of thirty -four millions, resulting, incontestibly and exclusively, from the depreciation of the currency, and making, with the sum
tained.
by the discount, forty-six millions of dollars.
While, then, the government sustained this great
pecuniary loss in less than three years of war,
amounting, annually, to more than the current
expenses of the government in time of peace, it
is vvorth while to inquire who were the persons
who profited to this enormous amount by the derangement of the currency? It will be found
that the 'whole benefit of this speculation upon
the necessities of the government was realized
lost
51
—
by stockjobbers and money brokers the very
same class of persons who profited so largely by
the business of commercial exchanges, in consequence of the disorders of the currency; and
who have the same interest in the recurrence of
those disorders as lawyers have in litigation, or
physicians in the diseases of the human frame.
Having presented these general views of the
evils which existed previous to the establishment
of the Bank of the United States, it remains for
the committee to inquire how far this institution
has effected a remedy of those evils?"
The
compiler regrets that the limits of this
admit of the entire insertion of this
valuable document. He must, therefore, content
himself with giving the substance of the remainder. It may be proper to observe, that this
report grew out of a reference to the committee
of ways and means of a certain part of the annual Message of President Jackson, of December, 1830, in which he says
work
will not
:
"The charter of the Bank of the United States
expires in 1636, and its stockholders will, most
probably, apply for a renewal of their privileges.
In order to avoid the evils resulting from precipitancy, in a measure involving such important
principles, and such deep pecuniary interests, I
feel that I cannot, in justice to the parties in-
terested, too soon present
it
to the deliberate
consideration of the legislature and the people.
58
Both the constitutionality and the expediency of
the law creating this bank, are well questioned
by a large portion of our fellow-citizens ; and it
must be admitted by ail, that it has failed in the
great end of establishing a uniform and sound
currency.
" Under these circumstances, if such an institution is deemed essential to the fiscal operations
of the government, I submit to the wisdom of
the legislature whether a national one, founded
upon the credit of the government, and its revenues,
might not be devised, which would avoid all constitutional difficulties; and,
at the
same
time,
secure all the advantajjes to the jrovernmcnt and
country that were expected to result from the
present bank."
Speaking of the bank having "failed in the
great end of establishing auniform currency," the
committee proceed to show, that, compared with
an exclusively metallic currency, " it has actually
furnished a circulating medium more uniform than
specie."
Say, for example, that a person were
to ship an article from Boston to New-Orleans,
and to receive the avails in Boston, the place of
shipment,
the article being sold in New-Or-
—
payment made there, the seller would
have to be at the expense of either purchasing a
bill on some house in Boston, or of shipping the
specie to that place, which would cost, including
insurance, two or three per cent.
the expenses
of land transportation would be much greater.
The same rule would apply, if a person were to
purchase cotton or anv other staple article in
New-Orleans, or at any other distant place, for
leans, and
—
59
The United
the Boston or New-York market.
Slates Bank usually transmits funds from one
extreme part of the Union to another (and none
but a similar institution could do ii), for half to
three-fourths of one per cent., thereby rendering
bank facilities, in transactions of this kind, worth
at least two per cent, more than specie.
It may
be worthy of further remark, that the trader
always takes into his calculation of expenses,
profit and loss, the cost of transmitting funds
from one place to another; and that, whatever
may be the amount, does not usually come out
of the trader, but out of the producer so that,
as a general rule, a farmer from the north, or a
planter from the south, if the difference of exchange be two per cent., would in reality pay
that amount as a tax, from which he would be
otherwise exempt, if exchange were at par.
Again, the notes of any of the branches are
receivable at all places in the United States, in
payment of debts due the government so far,
therefore, as any transaction of this kind is concerned, they are equal in every point of view to
specie.
It is true, each branch redeems only
its own bills
that is, one branch does not usually
redeem the bills of another. By reference to
the charter, it will be perceived, that the bank is
not subject to such a requisition.
Its framers
evidently never intended it
the public had no
just grounds to expect it.
Moreover, a little reflection will satisfy any one that the bank could
not, in justice to itself, adopt such a measure
and had such a requirement been contained in
the charter, it would have defeated the very ob;
;
—
—
—
—
60
—the establishment of a national
— stock would not have been Bubscribed
— By way of
may
be proper
the parent bank
cated
Philadelphia —
has about twenty
branches located
parts of the Union
—each branch has such an amount of
ject in view
bank
the
illustrating this position,
for.
to state, that
in
that
it
is lo-
it
at different
capital
assigned to
profitably
it,
as the parent
employed
•2,500,000 dollars.
;
bank thinks can bo
varying from 150,000 to
Now, suppose each branch
redeem the notes issued by
to attempt to
— the branch
all
the
Portsmouth, with a capital
of say 200,000 dollars, might be called upon to
redeem 70,000,000 dollars, being one dollar
stock to redeem every thirty. five thousand dol-
others
at
This, it is admitted, would
be an extreme case, and not within the range of
still it would be among the possiprobabilities
bilities, and goes to show, that a bank with a
number of branches never could, as a general
rule, redeem its bills only at the place where
made payable. The capital stock being divided
among a number of branches at different parts
of the Union, its liabilities must be divided in
were this not done, there
the same proportion
would not be the least difficulty, should some
wealthy and ill-disposed person feel so inclined,
in breaking some branch, or draining it of its
specie, every week, nay, every day.
The
bank, says the committee, d#d attempt, on its
first organization, "to indiscriminately redeem
all its bills ;" and this was one of the principal
causes that led to so serious an embarrassment
of th& institution in 1819, thut congress found
lars in bills issued.
;
—
GJ
necessary, during that year, to examine into
" No one who participated in
proceedings.
debate pretended to allege that the bank was
it
its
to redeem its bills indiscriminately, or
was expedient that it should do so. The
most that any one did, was to apologize for the
bound
that
it
unwise attempt."
Eostoyasioii of Specie Payuirnls.
The committee proceed to say, that " the
salutary agency of the Bank of the United
States, in furnishing a sound and uniform currency,
is
not confined to that portion of the cur-
rency which consists of its own bills. One of
the most important purposes whici; the bank was
designed to accomplish, and which, it is confidently believed, no oilier human agency could
have effected, under our federative system of go.
vernment, was the enforcement of specie payments
on the part of numerous local banks, deriving their
charters from tJie several states, and whose paper
irredeemable in specie, and illimitable in its quantity, constituted the almost entire currency of the
country.
" The committee are aware that the opinion
is entertained by some, that the local banks
would, at some time or other, either voluntarily,
or by the coercion of the state legislatures, have
resumed specie payments. In the very nature
of things, this would seem an impossibility. It
must be remembered, that no banks ever made
such large dividends as were realized by the
7
62
local institutions, during the suspension of specie'
payments.
rich and abundant harvest was
A
open to them, which the resumption of specie
payments must inevitably blast."
The committee proceed to give other reasons,
showing that, without the aid of such an institution as a national bank, to enforce the resumption of specie payments, state banks never could
and never would have come into the measure.
Among
other things, it said, that there being as
were, more than twenty distinct sovereignties,
all having different local mterests, without any
general control of the whole, no effectual leo-islative measures could have been adopted
that
if a few state banks had attempted a resumption
of specie payments, they must have largely
curtailed their discounts, the effect of which
would have been, to distress their stated cuatomers that a majority of the community were
it
;
—
either directly or indirectly interested in sustain,
ing an unsound currency
inasmuch as the
remedy, unless general, would be worse than the
and hnally, that the United States
disease
Bank stepped in, affording a sound circulating
medium instead of an unsound one and, in consequence of the importation of seven or eight
millions of dollars in specie from Europe, at an
expense of about half a million, a sound currency
was restored to community.
:
;
;
Rcue'vral of the
Sauk
Charter.
"Although (as the committee say) the expediency of renewing the charter of the present
63
bank is not a question now (1830) submitted for
the decision of congress, the committee consider
it so far involved in the matter referred to them
as to render it their duty to present some considerations bearing on that question, in addition
to what they have said on the general expediency
of maintaining such an institution."
The committee state that foreigners own about
seven millions of the stock that of the amount
owned in the United States, about two millions
are held by persons owning upwards of one hundred thousand dollars each that persons owning,
less than five thousand dollars each, hold four
—
—
hundred and eighty. two dollars
owning between five and ten
thousand dollars each, hold upwards of three
millions.
That nearly six millions is held by
trustees and guardians for the use of females and
orphan children, and charitable and other institumillions, six
and
;
that persons
tions.
Of the twenty-eight millions of the stock which
is
owned by
individuuls, only three millions, four
hundred thousand
subscribers.
is
now
held by the original
All the rest has
—
been purchased
at
a large portion of it, probably,
the market price
when those prices were higher than at present,
(20 per cent.)
Speaking of the stock being owned by men
of large capital, the committee say " But, the
objection that the stock is owned by men of large
capital, would apply with equal, if not greater
force, to any bank that should be organized.
In the very nature of things, men who have large
:
64
surplus capitals are the principal subscribers at
Farmers and
the first organization of a bank.
merchants and manufacturers, having
an active employment for their capitals, do not
choose to be the first adventurers in a bank proAccordingly, when the present bank went
ject.
into operation, it is believed that most of the
capital was owned by large capitalists, and under
a much more unequal distribution than exists at
planters,
large amount of stock now held
and minors, has been principally, if not entirely, purchased since the bank
went into operation ; and the same remark is
generally applicable to the stock in the hands of
It is ojily when the character of a
small holders.
hank is fully established, and when its stock assumes a steady value, that these descriptions of
present.
The
in trust for females
persons make investments in it.
"It is morally certain, therefore, that, if another distinct institution were -^reated, on the
expiration of the present charter, there would
be a much greater portion of its capital subscribed by men of large fortunes, than is now
owned by persons of this description, of the stock
Indeed, it might he
of the United States Bank.
confidently predicted, that the large capitalists who
now hold stock in that hank, would, from their local
and other adimntages, he the first to forethe subscriptions to the new bank, while the
small stockholders, scattered over the country,
would be probably excluded and the females
position
stall
;
and minors, and others interested in trust investments, made by decrees in equity, would be
65
almost necessarily excluded, as the sanction of
a court could scarcely be obtained, after the
passage of the new act of incorporation.
" To destroy the existing hank, therefore, after
it has rendered such signal services to the country,
merely wiih a view to incorporate another, would
be an act rather of cruelty and caprice, than of
justice and wisdom, as it regards the present stockholders.
It is no light matter to depreciate the
property of individuals, honestly obtained, and
usefully employed, to the extent oi' five millions,
six hundred thousand dollars, and the property of
the government, to the extent of one million, four
hundred thousand dollars, purely for the sake of
change. It would indicate a fondness for experiment which a wise government will not indulge
upon slight considerations."
Speaking of what would be the consequences
to the community in not re-chartering the present, or establishing a new one, the committee
say:
" But the great injury which would result from
the refusal of congress to renew the charter of
the present bank, would, beyond all question, be
that which would be the result to the community
It would be difficult to estimate the
at large.
extent of the distress which would naturally and
necessarily result from the sudden withdrawal
of more than forty millions of credit, which the
community enjoys from the bank. But this
would not be the full extent of the operation.
The Bank of the United States, in winding up its
concerns, would not only withdraw its own paper
from circulation, and call in its debts, but would
7*
66
unavoidably make such heavy drafts on the local
institutions for specie, as very greatly to curtail
The pressure upon the active,
their discounts.
industrious, and enterprising classes, who depend
most on the facilities of bank credit, would be
tremendous.
" If the Bank of the United States were destroyed, and the local institutions left without its
restraining influence, the currency would almost
certaily relapse into a state of unsoundness.
"It is due to the persons, who for the last
ten years, have been concerned in the administration of the bank, to state, that they have
performed the delicate and difficult trust committed to them, in such a manner, as, at the
same time, to accomplish the great national
ends for which it was established, and promote
the permanent interest of the stockholders,
with the least practicable pressure upon the local
banks. As far as the committee are enabled
to form an opinion from careful inquiry, the
bank has been liberal and indulgent in its dealings with these institutions, and, with scarcely
an exception, now stands in the most amicable
Some of those institutions
relation to them.
have borne the most disinterested and unequi-
vocal testimony in favour of the bank."
said thus much on the constitutionand expediency of an incorporated Na-
Having
ality
67
Bank, the only question which remains
be examined by the committee is the expediency of establishing " a National Bank
founded upon the credit of the government and
its revenues."*
tional
to
* It is thought by some that more was meant in this recommendation of President Jackson, than meets the eye:
that the plan of a Government Bank originated in the State
of New- York, and is nothing less than a consummation of a
vast political engine, of which the New- York " safety fund
law" is but a part of the machinery. The following com-
—
munication has been furnished the compiler with liberty to
publish it. The compiler cannot, from his own knowledge,
vouch for its accuracy. He however feels himself warranted
in saying, that the n)eans of the author in acquiring correct
information are not inferior to thoseof any one in this country;
being a gentleman of high literary attainments, of polished
manners, of extensive correspondence, and personal intercourse. A gentleman, whose word with all who know him, ia
not only unquestioned, but unquestionable.
"The bank safety fund law, first conceived by a visionary
speculator, is undoubtedly one of the most gigantic schemes
of political power, and moneyed monopoly, ever devised and
Tlie plan, as is
brought into operation in any country.
believed, was first unfolded by the projector, to Mr. Van
Buren, then Governor of the State of New-York, who discovered in it at once, a mighty engine of political power.
The capital of all the banks in the state, amounting to 30
millions of dollars, with the privilege to issue bills to the
amount of
seventy-five millions, subject
to
the control of
Commissioners of the right political stamp, empowered to
examine books and papers administer oaths to the officers
and clerks enter their vaults and handle their treasures,
stop their discounts, and restrain their issues, opened to the
aspiring, an avenue to political advancement, more favourable
than any ever before contemplated. Ip the suppressed language of General Root, on the floor of the Assembly, it conferred a power, greater than that wielded by Philip of
Macedon.
" The sole inventor was despatched from Albany to
New-York, where he obtained an audience with some
of the presidents, cashiers, and leading officers of the city
banks, and then unfolded to them his plan.
The owners
—
—
68
It is presumed to have been the intention of
the President, in suggesting the inquiry as to a
of bank stock in the city had been seriously alarmed
at the severity of the provisions contained in the revised
statutes, which seemed to breathe a spirit of hostility towards
Thus situated, the officers of the
that class of citizens.
banks manifested a disposition to enter hito some arrangement, whereby their interests should be secured to them,
and to make such concessions, in favour of the project,
as they could, in justice to tliemselves. Thej' insisted as the
basis of negotiation, that all tiie obnoxious clauses in the
revised statutes, subjecting their concerns to unnecessary
exposure and publicity, and rendering them liable without
proof, or even participation in the ciime, to be punished as
There can he no doubt as to the
felons, should be repealed.
impolicy and injustice of these acts, and the indignation,
manifested by the officers of the banks, was wholly justifiable.
They were represented, by one of their advocates on the
floor of the Assembly, as " occupying their seats at the board
of directors with halters about their necks." 'J'hey insisted
in thenest place, that the annual tax of a 5 per cent, on their
capital which thej' were obliged by tlie then existing law to
pay should be repealed,5and the same transferred to the safety
fund : they moreover insisted that tliey should have tlie right
to charge in advance 7 instead of 6 per cent, on all loans for
a period exceeding 63 days. Having obtained the best terms
that Wall-street would listen to, the inventor retun.«d to
Albany with all convenient despatch, and we soon learn that
the whole project is laid before the legislature, accompanied
with a recommendation from Governor Van Biiren in its favour. The project thus recommended by the Governor, soon
became a subject of discussion.
Applicants for country
banks were pleased, because the safety fund was calculated
to give a credit to the bills of their contemplated institutions.
That portion of the legislature who had no sympatliies for
banks, new or old, soon learned that the annual amount of
$150,000 (the amount arising from the tax of ^ a per cent, on
the capital of banks) would by the proposed plan be diverted
from the public treasury, never to be returned, and that in
many instances the borrowers would have to pay, for the use
of money, 7 instead of 6 percent., that this annual loss to
the State of §150,000, would amount, in twenty-five years, to
—
69
bank, " founded upon the credit and revenues
of the government," to be understood as having
$3,750,000, and the difference between 7 and 6 per cent, on the
loans made by banks would amount during the same period
to the further sum of $7,500,000, makin? a gross sum in
twenty-five years, against the people, of about $11,250,000,
besides interest. Considering the immense saciifice required,
a majority of the legislature shrunk from the price demanded
by the banks, as the condition of their uniting in the safety
fund partnership. No sooner was it understood that these
independent legislators had come to a determination not to
release the banks from the State tax of j a per cent, than
murmurs began to be heard from all quarters ; the principle
of compelling honest and provident institutions to contribute
and fraud of others was inveighed against,
with all the effort that language could command. Satire in
all forms and shapes was leveled at the inventor and his
abettors, and even the influence of the Governor seemed, for
a time, to be shaken. A powerful and talented Committee
were despatched to Albany by the New-York banks, to represent to the legislature the impolicy of such a law; the tax
and safety fund contributions would, as they affirmed, compel them to close their concerns, and havoc and destruction would follow, should the bill pass in the shape proposed. They peremptoiily refused, in behalf of the banks,
to accept of the renewal of their Charters, and began preparations for winding up their concerns.
" The Governor, after adjusting his matters a little, and
bracing himself to the contest, determined to force his favourite measure at all events.- The exertions of .the regency
were put in requisition, and the applicants for new banks
poon learned that their fate was to be decided by the fate of
the safety fund, and that they must become reconciled to the
payment of the ^ a per cent. tax. The regency orators were
put forward in the Assembly, and the incalculable benefits of
the safety fund, and the tremendous consequences of its rejection, were portrayed, with all the powers of fancy and
for the prodigality
eloquence.
" These speeches were met by the members from NewYork with all the skill they could command reason, ridicule,
and every comparison and simile that invention could contrive, calculateu to cast contempt on the project, was brought
—
70
allusion to a
bank of discount
Such a bank,
it
into requisition
btii
is
—
and
deposit.
taken for granted, would have
the influence oj the Govei-nor
and
the,
regency prevailed the law was passed allowing the banks
the right to charge 7 per cent, on all loans exceeding 63
days, but continuing the State tax of \ a percent., also an
additional J a per cent, contribution to the safety fund.
"The applicants for new banks having fought manfully in
the great battle between the Regency and the New- York
Banks, were rewarded by charters with little or no opposithus ended
tion, subject to the provisions of the safety fund
the session of 18"29 the New- York Committee in the mean
intention
banks,
if nothing
tlie
of
their
having
intimated
lime
more favourable was granted, to wind up their concerns
thev however knew that they had from that time till the
convening of the next Legislature, to make arrangements for
another campaign. They had a confidence in the influence
they could exercise with the country banks, as they would, of
course, participate in any measure that would favour the city
banks thev had reason to believe that a delegation to the legislature from thiscity, friendly to their interests would be elected
and they undoubtedly knew that the Albany Re^ency,^ as a
measure of policy and interest, rather than incur the opposition
of 90 vast a moneyed influence, would prefer yielding to their
demands. The banks were not mistaken ; for during the autumn preceding the meeting of the Legislature, the confidential agent of the 'Albany Regency' had several private interviews with the banks, and the curtain was first raised at
the Capital in January, 1830. Governor Throop, in his first
1
annual Message to the Legislature of January ti, says
have reason to believe that the banks in New-York are now
prepared to relinquish their opposition to the safety fund and
gupervision, and accept their charters, provided a modification of the harsh features of the revised statutes can be obtained, and the local tax now imposed directly on the banks be
icithdrawn, or placed on the stockholders.' The acting Goverbe
nor does not suggest the rcpenl of the tax it is to
This term ' be icithdrairn,^ was calculated to
uithdraicn.''
strike the tympanums of the country members more softly
Conand mellifluously, than the grating sound ot repeal.
for>nable!to the views of the Governor, Mr. Mann introduced a
bill into tlie Legislature, exempting all owners of stock out of
—
—
:
—
'
—
—
'
'
71
branches established in various parts of the
Union, similar to those now established by
the State from taxation, accompanied with bold descriptions
oi thcimmcnKc ammint of forci'^n cnpital* which, in consequence of this ])rovision, would be drawn to our great emporium, and its indescribable benefits to the people.
" This being done, it was decreed in council, that an uii.
compromising war, oflcnsive and defensive, should be waged
against the United States Bank, and that a Government
Bank, founded upon the credit of the Government, and it3
revenues,' should bo the only orthodox creed of the 'republi'
can party.' "
The author of the foregoing
munication.
" This, sir,
article
thus closes his com-
a faithful history of the origin, progress, and
consummation of the safety fund.
By its operations the
pcoi)lc have gained what they consider a security for the payment of bank bills They have rendered the State tax of J
a per cent, on the capital of banks liable to evasion. They
in most cases pay 7 instead of 6 per cent, on bank discounts
and they have conferred on their rulers, whoever they may
be, a power, which, in the language of General Root, 'is
greater than that wielded by Philip of Macedon.'
" No blame can be attached to the banks for the course
they have pursued they foresaw that their institutions were
to 1)0 subjected to new and unheard of exactions, and to be
made subservient to views and purposes of political asjiirants.
Thus situated, they were determined, in the true spirit of
money doalins, to be faithful and true to themselves, and to
make tiio best bargain they could. I do not blame them
would have done the same. The city banks would have been
salislicd with a renewal of their original charters, which gave
th(un (J per cent, on their loans, the additional 1 per cent,
out of the people is to pay for experiments, new liabilities,
The original intention of llie 'Regency' was, to break
<fcc.
down the United States Bank, and to establish a 'Government
J5ank' on its ruins. In that nefarious attempt, their plans have
is
—
—
—
—
—
—
—
* President .Tackson, in his Voto Message of the United States
Bank, July, 1&32, expresses great abhorrence at the idea of" l"orcif,'ners" holding stock in the bank. Mr. Mann has ever been one of tha
sndorsert of tbo " Veto McMuge." Ooviiiilcr.
—
72
Bank of the United States, and co-extensive
with them.
The great object of furnishing a national
currency could not be accomplished, with an
approach to uniformity, without the agency of
such branches
and another object, second
only in importance to the one just stated, the
extension of the commercial facilities of bank
accommodations to the different parts of the
Union, could not be at all effected without such
agency.
If there should be simply a great
central bank established at the seat of government, without branches to connect its operations with the various points of the commerce
of the Union, the promise to pay specie for its
notes, whenever presented, would be almost
the
;
thus far been frustrated. Before the bold, manly, patrioticand eloquent reasonings, contained in the Report of the
Committee of Ways and Means' upon the subject of a Government Bank,' corruption stoQfl appaled, and conspirators
trembled. They however do not intend to abandon the proTheir mode of operation is, to put down the United
ject.
Stales Bank, by appealing to the ignorance, the prejudices
and passions of the people. It is well known that the science
of banking and its intricate operations are not well understood
by the great majority of the people. They know when a
'
'
money exists, but in general, canuot tell 'whither
They will be goaded on to
it goeth.'
destruction, till great pecuniary distress, in consequence of the banks winding up its concerns, shall have pervaded every class of community.
Under these circumstances, the advocates of the measure, watching the prejudices of a certain portion of the community against the establishment of a National Bank, and viewing the distress and
embarrassments of every class, will step forward, and, like
Governor Marcy, in tender mercy to the sutTerings of the
people, will propose a Government Bank, as the only true
scarcity of
it
cometh nor where
their
mode
own
of relief."
73
Of what consequence would it be to
nominal.
a merchant or a planter of Louisiana, or a
manufacturer or farmer of Maine, that he could
obtain specie for bills of the National Bank, on
presenting them at the city of Washington,
place wholly unconnected either with Louisiana
or Maine, by any sort of commercial intercourse, and where, consequently, these bills
would never come in the regular course of
trade.
A promise to pay specie at a place so
remote from the place of circulation, and where
the bills would never come but at a great expense, and for the sole purpose of being presented for payment, would neither give credit to the
notes, nor operate as an effective check upon
Whatever credit such notes
excessive issues.
might have at a distance from the place of
issue, would not be because they were redeemable at the pleasure of the holder, for such
would not be the fact but principally because of the ultimate responsibility of the government, and of their being receivable in payThey would
nient of all dues to the treasury.
rest, therefore, upon almost precisely the same
basis of credit as the paper money of our revolution, the assignats of revolutionary France,
and the treasury notes of the late war. These
were receivable in discharge of debts due to
the treasury, and the government was of course
—
;
yet
ultimately responsible for their payment
the two former depreciated almost to nothing,
;
and the latter, though bearing interest, sunk to
But the notes of a
20 per cent, below par.
central Government Bank, without branches,
74
would be subject to depreciation from a cause
which constitutes a couclusivc objection to such
an institution.
There would he nothing to limit
excessive issues hut the discretion and prudence of
the Government or of the direction.
Human
wisdom has never devised any adequate security against the excessive issues, and consequently the depreciation of bank paper, but its
actual, and easy, and prompt convertibility
into specie, at the pleasure of the holder.
Experience has shown that, where the paper of
a bank is, by any means, habitually circulated
at places remote from the point where it is
issued, and not connected with it by a regular commercial intercourse, there will not
exist that easy and prompt conveitibility which
credit of bank paper.
is so essential to the
When bank bills are confined to their appropriate sphere of circulation, a redundant issue
certainly and immediately followed by a run
upon the bank for specie.
This timely admonition is as useful to the bank as to the
community for it enables the directors to avoid,
with unfailing certainty, an excess equally injurious to both, and which no human sagacity
could anticipate or prevent, by calculation
merely.
Whatever, therefore, in a system of
bank circulation, prevents the reflex of redun-
is
;
dant issues, necessarily destroys the only adequate security against these injurious and ruinous excesses."
" But a Government Bank, without branches,
would be obnoxious to another objection which
could not be obviated.
Its loans would be con
75
or, if extendfined to the District of Columbia
ed to the various parts of the Union, to say no.
thing of the inconvenience to whicli it would
;
expose those at a distance, who obtained accomodations, they would be unavoidably granted
without any knowledge of the circumstances of
the persons upon whose credit the Government
would depend for re-payment.
It would, in
fact, be, for all useful purposes, a mere District
Bank."
" These views of the subject have brought
the Committee to the conclusion, that if a Government Bank should be established, it would
have at least as many branches as the Bank
of the United States, and probably a much
greater number.
Few administrations would
have the firmness to resist an application to establish a branch coming from any quarter of the
Union, however injudicious the location might
be, upon correct principles of commerce and
banking.
"The Bank of the United States now em.
ploys five hundred agents, in the various
parts of the Union, where its ofiices are established. From this fact some idea may be formed
of the very great addition which would be made
to the patronage of the Executive Government,
by the establishment of such a bank as the one
under consideration.
" But the patronage resulting from the ap.
pointment, the annual appointment of those
agents, great as it would doubtless be, would be
insignificant and harmless, when compared to
that
which would result from the dispensation of
76
bank accommodations
to the standing
at least fifty millions of dollars
!
amount of
The mind
almost
from the contemplation of an
idea so ominous to the purity of the government,
and the liberties of the people. No government of
which the Conmiittee have any knowledge, except perhaps tlie despotism of Russia, was ever
invested with a patronage at once so prodigious
in its influence and so dangerous in its character.
In the most desperate financial extremities, no
other European government has ever ventured
upon an experiment so perilous. If the whole
patronage of the English monarchy, were concentrated in the hands of the American Executive, it may be well doubted whether the public
liberty would be so much endangered by it as
it would by this vast pecuniary machine, which
would place in the hands of every administration fifty millions of dollars, as a fund for rewarding political partizans.
" Such would be the depositories, acting, not
under the public eye but under the protecting
mvstery of a sort of concealment and secrecy,
deemed indispensable in banking operations, to
whom, not only the whole treasury of the Union
would be confided, to be squandered, perhaps,
in profligate favouritism, but the tremendous
power of putting the whole property of the nation under mortgage, for the redemption of the
To say nothing
bills issued at their discretion.
of the utter insecurity of the public revenues
under such a system, a new species of legislative power, unknown to the constitution, would
be committed to these irresponsible bank direc^
instinctively shrinks
77
tors,
of which no
human
sngacity can predict
the consequences.
"A just
anal3'.sis
of the operation of granting
loans by this Government Bank, in exchange
for the notes of private individuals, will show,
that it involves the exercise, on the part of the
directors, of the t^vo-fold power of appropriating the public revenue in the most dangerous
of all forms of discretionary loans, and of pledg.
ing the responsibility of the government, to an
unlimited extent, for the payment of the debts
These are
at the same time created against it.
among the highest functions of legislative power, and have been expressl^'and conclusivelyvested in Congress. Unless, therefore, it be assumed that congress may rightfully transfer the
powers with which it is invested to these bank
directors, it will be difficult to find any warrant,
either in the letter or spirit of the constitution,
for the creation of this tremendous engine of
pecuniary influence. It may indeed be doubt-
whether all the branches of the legislative
authority united have any constitutional power,
to lend the public revenue, either to individuals,
corporations, or states, without reference to the
objects to which it shall be applied. But, whated,
ever
may
ject,
it
be the power of congress on this subappears to the Committee to be inexpedient, in every view of the question, that the government should be converted into a great
money lender. There is no species of trade in
which it would be wise for the government to
embark but of all the variety of pursuits known
to human enterprise, that of lending money
;
78
by the government to the citizens of the counwould be fraught with the most pernicious
try,
consequences.
" No matter by what means an administration
might get into power, with such a tremendous
engine in their hands, it would be almost impossible to displace them, without some miraculous interposition of Providence.
Deeply impressed with the conviction that the weak point of
a free government is the absorbing tendency of
executive patronage, and sincerely believing
that the proposed bank would invest that branch
of government with a weight of moneyed influence, more dangerous in its character, and
more powerful in its operation, than the entire
mass of its present patronage, the Committee
have felt that they were imperiously called
upon, by the highest considerations of public
duty, to express the views they have presented,
with the frankness and freedom demanded by
the occasion,"
Having given the substance of the Report of
the tirst Committee of Ways and Means, under
the first term of the administration of President
Jackson, we proceed to give an epitome of such
executive and legislative proceedings in relation
to the bank, as occurred from the session of Congress, 1829, up to July, 1832, when a bill for
re-chttjtering the
bank was vetoed bv the Presi.
79
dent.
Blunt's
(Extracted from Niles'
Annual Register.)
Register,
and
The President, in his annual Message of 1829,
" The charter of the Bank of the United
snys
:
—
States expires in 1836, and its stockholders will,
most probably, apply for a renewal of their privileges.
In order to avoid the evils resulting from
precipitancy in a measure involving such important principles, and such deep pecuniary
interests, I feel that I cannot, in justice to the
parties interested, too soon present it to the deliberate consideration of tlie legislature and the
people.
Both the constitutionality and the expediency of the law creating this bank, are well
questioned, by a large portion of our fellow-citizens and it must be admitted by all, that it has
failed in the great end of establishing a uniform
and sound currency.
"Under these circumstances, if such an institution is deemed essential to the fiscal operations of the government, I submit to the wisdom
of the Legislature whether a national one, founded upon the credit of the government and its
revenues, might not be devised, which would
avoid all constitutional difficulties, and, at the
same time, secure all the advantages to the government and country that were expected to result from the present bank."
In 1830 he says
" The importance of the principles involved in
the inquiry, whether it will be proper to re-charter the Bank of the United States, requires that
I should again call the attention of Congress to
ihe subject.
Nothing has occurred to lessen, in
;
80
any degree, the dangers which many of our
citizens appreliend from that institution, as at
present organized.
In the spirit of improve-
ment and compromise, which distinguishes our
country and its institutions, it becomes us to inwhether it be not possible to secure the
advantages afforded by the present banit through
the agency of a Bank of the United States, so
modified in its principles and structure as to obviate unconstitutional and other objections.
"It is thought practicable to organize such a
bank, with the necessary officers, as a branch
of the Treasury department, based on the public
and individual deposites, without power to make
loans or purchase property, which shall remit
the funds of the government, and the expenses
of which may be paid, if thought advisable, by
allowing its officers to sell bills of exchange to
private individuals at a moderate premium.
Not being a corporate body, having no stockholders, debtors, or property, and but few officers, it would not be obnoxious to the constitutional objections which are urged against the
present bank ; and having no means to operate
on the hopes, fears, or interests of large masses
of the community, it would be shorn of the inquire,
which makes that bank formidable.
States would be strengthened by having in
their hands the means of furnishing the local
fluence
The
paper currency through their own banks while
Bank of the United States, though issuing no
paper, would check the issues of the State banks,
by taking their notes in deposit, and for exchange, only so long as they continue to be re;
the
81
deemed with
specie.
In times of public emergency, the capacities of any such institution
might be enlarged by legislative provisions.
" These suggestions are made, not so much
as a recommendation, as with a view of calling
the attention of Congress to the possible modifications of a system which cannot continue to
present form, without occasional coland perpetual
apprehensions and discontent on the part of the
States and the people."
In his annual Message of 1831, the President says
" Entertaining the opinions heretofore expressed in relation to the Bank of the
United States, as at present organized, I felt it
my duty, in my lormer Messages, frankly to disclose them, in order that the attention of the Legislature and the people should be seasonably directed to that important subject, and that it might
be considered, and finally disposed of in a manner best calculated to promote the ends of the
constitution and subserve the public interests.
Having thus conscientiously discharged a constitutional duty, I deem it proper, on this occasion, without a more particular reference to the
views of the subject than expressed, to leave it
for the present to the investigation of an enlightened people and their representatives."
exist in
its
lisions with the local authorities,
:
—
On the 7th of December, 1831, Mr. ]\I'Lane,
Seorctary of the Treasury, reconunended the
82
renewal of the charter of the bank, as will appear from the following extracts from his annual
Report.
" The important charge confided to the trea.
sury department, and on which the operations
of the government essentially depend, in the
improvement and management of the revenue,
and the support of public credit, and of transferring the public funds to all parts of the United
States, imperiously requires from the govern-
ment
all
the facilities which
it
may
constitution-
and especially for
regulating and preserving a sound currency.
" As early as May, 1781, the Congress of the
United States convened under the Articles of
Conlederation, approved the plan of a national
bank, submitted to their consideration by Mr.
ally provide for these objects,
Morris, then superintendent of the finances
and, on the 31st of December, of the same year,
from a conviction of the support which the
finances of the United States would receive from
the establishment of a national bank,' passed an
ordinance incorporating such institution, under
the name and style of the President, Directors,
and Company of the Bank of North America.'
The aid afforded by that institution was acknow'
'
lodged to have been of essential consequence
during the remaining period of the war, and its
utiHty subsequent to the peace of little less importance.
" The
create
an
of the present government to
for the same purposes cannot
has, moreover, the sanction of
autliority
institution
be less clear.
It
'
83
and judicial authorities,
and of a majority of the people of the Vnited
States, from the organization of government to the
the executive, legislative,
If public opinion cannot be considered the infallible expounder, it is among the
soundest commentators of the Constitution. It
is undoubtedly the wisest guide and only effeclive check to those to whom the administration
of the Constitution is confided and it is believed,
that in free and enlightened States, the harmony,
not less than the welfare, of the community is
best promoted by receiving as settled, those
great questions of public policy, in which the
constituted authorities have long concurred, and
in which they have been sustained by the unequivocal expression of the will of the people.
"The indispensable necessity of such an institution for the fiscal operations of government
in all its departments, for the regulation and
preservation of a sound currency, for the aid of
commercial ti*ansactions generally, and even for
the safety and utility of the local banks, is not
doubted ; and, as is believed, has been shown
in the past experience of the government, and
in the general accommodation and operation of
the present bank.
" The present institution may, indeed, be considered as peculiarlythe offspring of that necessity
springing from the inconveniences which follow the loss of the first bank of the United States,
and the evils and distresses incident to the excessive, and, in some instances, fraudulent issues
of the local banks during the war the propriety
of continuing it is to be considered, not more in
present time.
;
—
—
84
reference to the expediency of banking generally, than in regard to the actual state of things,
and to the multiplicity of State banks already in
existence, and which can neither be displaced,
nor in other manner controled in their issues of
paper by the general government. This is an
evil not to be submitted to
and the remedy at
present applied, while it preserves a sound currency for the country at large, promotes the real
interests of the local banks, by giving soundness
to their paper.
" If the necessity of a banking institution be
conceded or shown, that which shall judiciously
combine the power of the government with
private enterprise, is believed to be the most
efficacious.
The government would thus obtain
the benefit of individual sagacity in the general
management of the bank, and by means of its
deposits and share in the direction, possess the
necessary power for the prevention of abuse.
"Ir is not intended to assert that the Bank of
the United States, as at present organized, is
perfect, or that the essential objects of such an
institution might not be attained by means of an
entirely new one, organized upon proper principles, and with salutary limitationg.
It must be
admitted, however, that the good management
of the present bank, the accommodation it has
given the government, and the practical benefits
it has rendered the community
whether it may
or may not have accomplished all that was expected from it and the advantages of its present
condition, are circumstances in its favour, entitled to great weight, and give it strong claims
;
—
—
85
upon the consideration of Congress, in any future legislation upon the subject.
"To these may he added, the knowledge the
present bank has acquired of the business and
wants of the various portions of this extensive
country, which being the result of time and experience, is an advantage it must necessarily
possess over any new institution.
" It is to be observed, moreover, that the
facilities of capital actually afforded by the present institution to the agricultural, commercial,
and the manufacturing industry of all parts of
the Union could not be withdrawn, even by
transferring them to another institution, without
a severe shock to each of those interests, and to
the relations of society generally.
" To similar considerations, it
may be prebe traced the uniform policy of the
several Slates of the Union, of re-chartering
their local institutions, wilh such modifications
as experience may have dictated, in preference
sumed,
is to
to creating
new ones.
" Should any objection be felt or entertained
on the score of monopoly, it might be obviated
by placing, through the means of a sufficient
premium, the present institution upon the footing
of a new one, and guarding its future operation
by such judicious checks and limitations as experience may have shown to be necessary.
" These considerations, and others which will
be adverted to in a subsequent part of this Report,
the experience of the department in the
trying periods of its history, and the convictions
ofhis own judgment, concurring with those of the
—
9
86
eminent
men who have preceded the undersigned
—
induce him to recommend
the expftdiency of chartering the present bank
at the proper time, and with such modifications,
as, without impairing its usefuhiess to the goyernment and the community, may be calculated
to recommend it to the approbation of the exin its administration
ecutive, and
— what
is vitally
important
—
to the
confidence of the people."
On the 9th of January, 1832, Mr. Dallas pre-sented a memorial of the bank petitioning for a recharter, which was referred to a select commitOn the iSth of March, this committee retee.
ported in favour of a renewal of the charter for
fifteen years, with the following modifications
:
" First, No notes (under fifty dollars) were to
be issued from the Bank or any branch, unless
made payable at the bank or branch whence
issued, except at the request of the persons to
whom
they are delivered.
" Second, The notes of the bank to be received by every branch in payment of balances
due by any State bank.
" Third, The corporation to be prohibited retaining any real estate, other than for banking
purposes, longer than two years, under a penalty
of ten thousand dollars in each case.
" Fourth, Not more than two branches to be
87
established' or retained in
more than one, except
riiey now exist, without
any State
in the
;
and not
States in which
the assent of the legis-
lature.
A bonus of 81,500,000 to be given
government, payable in three annual payments."
" Fifth.
to the
This bill was ordered to a second reading, and
then laid upon the table of the Senate, until after
the Report of the Committee appointed by the
House to inquire into the affairs of the bank.
It was in that body, that the main battle concerning the bank was to be fought. Upon the
presentation of the memorial by Mr. M'Dutfie,
on the 9th of January, parties at once arrayed
themselves upon the question of reference the
friends of the bank being in favour of a reference
to the Committee of Ways and Means
while
its opponents sought to refer it to a select committee.
The former prevailed by a vote of 100
yeas, 90 nays, and the memorial was accordingly referred to the Committee of Ways and
Means, by whom a report was made in favour
of a renewal of the charter, on the 10th of February.
The minority made a counter report,
containing the views of the opponents of the
bank'; and both parties now addressed themselves to sustain their respective views on this
important question. The next step taken by its
opponents consisted in a motion, made by Mr.
Clayton, on the 23d of February, for a Committee of Inquiry into the Affairs of the Bank,
with power to send for persons and papers.
An
—
;
88
animated diecupsion ensued upon this motion.
Mr. Clayton said lie believed, upon investigation,
the following charges would be substantiated,
viz.
:
First, The issue of $7,000,000 and more of
branch bank orders as a curiency.
Second, Usury exacted on the loan of broken
bank notes in Kentucky and Ohio.
Third, Domestic bills of exchange issued
being disguised loans at more than the rate of
six per cent.
Sixteen millions of these bills
were issued
in
December
last.
—
Non-use of the charter: in this,
that from 1819 to 1626, a period of seven years,
the south and west branches issued no currency
of any kind.
Fifth, Building houses to rent
which is conFourth,
—
trary to the limitation in their charter, on the
right to hold real property.
Sixth, In not having a due proportion of coin
in the capital stock.
Seventh, Foreigners
through their trustees.
voting
for
directors,
Mr. Clayton also stated, that there were
abuses worthy of inquiry, not amounting to forfeiture
;
but going,
it'
true, to
show the inexpe.
diency of renewing the charter.
First, Not cashing its own notes, nor receiving in deposit at each branch and post of the
parent bank the notes of each other. By reason
of this practice, notes of the mother bank are at
discount at many, if not all, of her branches,
which completely negatives the assertion of establishing a sound and uniform currency.
Second, Making a difference in receiving
notes from the federal and private citizens.
This is admitted as to all notes above five dollars.
Third, Making a difference between members
of Congress and the citizens generally, in both
granting loans and selling bills of exchange. It
is believed it can be made to appear that members can obtain bills of exchange without citizens ifith a premium : the first give nominal endorsers
the others must give two sufficient resident endorsers.
Fourth, In permitting the undue accumulation of proxies in the hands of a few, to control
the election for directors.
Fifth, A strong suspicion of a secret understanding between the bank and brokers to job
in stocks contrary to the charter.
For example,
to buy up the three per cent, stock at this time,
and to force the government to pay at par for
that stock
and that the government deposites
are used to enhance the value of its own debts.
Sixth, Making subsidies and loans, directly or
indirectly, to printers, editors, and lawyers, for
purposes other than the regular business of the
—
—
—
bank.
Seventh, Making distinctions in favour of merchants in sellinfT hills of exchange.
Eighth, Practising upon local banks and
debtors, to make them petition Congress for a
renewal of its charter, and thus to impose upon
Congresls by false clamour.
9*
90
Ninth, Mr. Clav-ton also proposed to inquire
management of the bank, whether safely and prudently conducted ?
into the actual
Tenth, Into the actual condition of the bank,
debts and credits
how much it has increased
its debts, and diminished its means to pay in the
last year? how much it has increased its credits
and multiplied its debtors, since the President's
IMessage m 1929, without ability to take up the
notes it has issued and pay its deposiles?
Eleventh, Into its excessive issues, all on pub-
its
lic
;
deposites.
Twelfth, Whether the account of the bank's
prosperity be real or delusive
Thirteenth, Into the amount of gold and silver
coin and bullion, sent from the westein and
southern branches of the parent bank, since its
establishment in 1817.
The amount is supposed
to be 15 or 20,000,000
and, with bank interest
on bank debts, constitutes a system of the most
intolerable oppression of the south and west.
The gold and silver of the south and west have
been drawn to the mother bank, mostly by the
agency of that unlawful currency created by
.'
;
branch bank orders.
Fourteenth, Into the establishment of agencies
in
different
States,
under the direction and
management of one person
only, to deal in bills
of exchange, and to transact the other business
properly belonging to branch banks.
Fifteenth, Into
banks
its
giving authority to State
to discount its bills, without authority frona
the Secretary of the Treasury.
91
After these charges had been fully stated by
Mr. Clayton, Mr. M'Duffie replied that he
should consider them to be what Mr. Clayton
had called them that is, an indictment against
that
the bank, and should answer them in detail
—
;
—
charge, " the issue of seven millions or
more of branch bank orders as currency," he
considered a fair specimen of the whole. After
showing the constitutional right of the bank to
issue such orders, their beneficial efiect upon the
interests of the institution and the country, he
denounced it as the idlest of all charges ever
brought forward. It would not bear discussion.
the
first
He
showed, also, that the issue by the branches
of such orders was a matter of sheer necessity,
the cashier and president of the mother bank
not possessing the physical power to sign.
The next specification for usury taken on
broken bank notes in Kentucky and Ohio.
This specification, Mr. M'Dutfie showed, was
based on a transaction which occurred ten years
ago where an individual, on presenting a note
for discount, was told by the officer of the branch
where it took place, that it could not be done.
This individual knowing that the bank had some
uncurrent notes of State banks in its possession,
proposed that he would receive them his proposition was acceded to
he received those
notes, and afterwards pleaded usury, and thus
avoided payment.
The third charge alleges that the bank dealt
in domestic bills of exchange.
Mr. M'Duffie replied, that it was authorized
—
—
;
92
by its charter and that those bills of
exchange were of great benefit to the community
BO to do
;
at large.
The
was a non-use of its chara period of seven years, the
southern and western branches had issued no
currency of any kind.
Mr. M'Duffie said, that it was not obligatory
upon the bank, that all its branches should issue
currency that the issue of such evidences of
debt was wholly discretionary with the bank.
The fifth charge is, "the building of houses
to rent."
Mr. M'Duffie replied, that the charter authorized the bank to purchase property which had
been mortgaged as a collateral that it had become possessed of real estate in no other manner than this that the authority to buy land is
an authority to own land and an authority to
own land, is an authority to use it for the advantage of the stockholders.
The sixth count is, " for not having in its capital stock a due proportion of com."
Mr. M'Dufiie could not understand the bearing of this charge, or to what Mr. Clayton alluded.
Mr. Clayton said, " the branch cannot pay its
debts, and is broke."
fourth charge
ter, in this, that for
—
—
;
;
Mr. M'Duffie pronounced the allegation unfounded.
He averred, that the bank was not
only able to pay its debts, but had a large sui'plus
and could leave its capital wholly untouched.
—
93
The seventh charge
is,
"foreigners voting for
directors through their trustees."
Of this
he was
fact,
Mr. M'Duffie knew nothing, but
it would turn out to be with-
satisfied that
out foundation.
The next charge
is,
" not cashing
its
own
notes, or receiving in deposit at each branch,
and at the parent bank, the notes of each other."
Mr. M'Duffie showed, that the attempt of the
bank in 1819, to do what Mr. Clayton would now
require it to do, had brought on it all the embarrassments of that period. If it were to do if, all
the commercial exchanges of the country would
be conducted at its expenses. The drafts of the
respective branches were payable at the places
of issuing they bore this fact on their face
—
the operation was a fair one.
The next is, "the making a difference in receiving notes from the federal government and
the citizens of the United Slates."
This charge was met by Mr. M'Duffie, byshowing that the very stipulations of the charter
required the bunk to make this difference.
The next is making a difference between
members of Congress and the citizens generally,
both in granting loans and selling bills of exchange.
Mr. M'Duffie showed that it had been the uniform practice of the bank from the beginning
and for one, he
to grant such accommodations
;
felt
grateful for the favour extended to himself.
" The undue accumulation of proxies in the
hands of a few to control the election for
directors."
94
The bank had no control over the action of
stockholders in such matters, and therefore was
not responsible for their conduct.
" A slTong suspicion of^ secret understanding
between the bank and brokers to job in stocks,
contrary to the charter."
Mr. M'Duifie expressed his surprise at the
language of this count in Mr. Clayton's indict,
ment. He thought, that that gentleman had received some admonitions on the subject of yielding his ear too credulously to suspicions whispered by anonymous and irresponsible informers.
He maintained that suspicion mere suspicion
was not an adequate ground for instituting such
an iuquiry as this.
The next charge is, "that the bank made a
distinction in selling bills of exchange."
This, Mr. M'DutKe denounced as unfounded.
The next charge is, " that the bank has used
undue and improper practices to induce the local
banks to petition Congress for a renewal of its
charter, and thus to impose upon Congress by
false clamour."
This charge, said Mr. M'Duffie, was, in its
very nature, and upon its face, founded upon
mere surmise and therefore not entitled to no-
—
;
tice.
The
into
next charge in order proposed an inquiry
the
manner
conducted
—
in
was
which the bank had been
not, therefore, properly
speaking, an allegation, and required no special
notice.
The information sought for had already
been placed before the nation.
:
it
95
The
next allegation, "that the bank had
made
iQxcessive issues, all on public deposites."
Mr. M'Duffie maintained, that if the bank had
rendered itself obnoxious to censure in this respect, that there was no bank in the United
for
States that could escape condemnation,
there was not one in proportion to its capital
who did not issue a larger amount of bills than
He said that there was no bank in the
it did.
country and there never had been one, which
had conducted its issues with more perfect
—
—
safety to
all
the interests involved.
The
next inquiry, the gentleman from Georgia
proposed to make by the agency of a select
committee, related "to the amount of gold, and
silver coin, and bullion sent from southern and
western branches to the parent bank since its
establishment in 1817."
Mr. M'Duffie remarked, that the transfer of
specie, like that of any other article, was regulated by the course of domestic exchange, -and
the demands of the different parts of the Union.
To
complain that
this transfer is
performed by
the bank, almost free of any charge, was to complain of one of its most wholesome and salutary
operations.
In nothing had the bank done more
essential service to the people, than in the very
matter lor which the gentleman from Georgia
was now arraigning it.
The next charge was, " the establishment of
agencies, in different States, under the direction
and management of one person only, to deal in
bills of exchange, and to transact the other business properly belonging to branch banks."
Mr. M'Duffie considered that the charter had
96
expressly granted the power exercised by the
bank.
The
last specification
was " giving authority
banks to discount their bills without authority from the Treasury."
Mr. M'Duffie could not understand what it was
that the gentleman from Georgia meant to condemn. Did he suppose that the State banks
to State
were not authorized
to discount the bills of the
United States Bank without a special authority
from the Bank to do so? or that any authority
of that kind could give them a greater right in
that respect, than they had without such au-
thority
?
In conclusion, Mr. M'Duffie said, I will repeat
the declaration I have already made, that if the
honourable member from CTeorgiawill state upon
his responsibility, as a member of this House,
that there is any respectable man, who has assured him that he will prove against the bank
the' alleged charge of corrupt dealing with
brokers, or any other description of persons, I
will give my vote for creating this special commission, be the cost and be the consequences
what they may. But in the failure of the gentleman to give this assurance, I shall feel constrained by every consideration to give my vote
against it.
This discussion was continued for several days
during the time devoted to the consideration of
resolutions.
In the course of this discussion a
motion was made by Mr. Root to appoint the
committee by
ballot, with the
view of taking the
97
appointment from the speaker, who was hostile
and the question being taken, the
to the bank
House divided 100 in favor, and 100 opposed to
Whereupon the speaker voted in
the motion.
;
the negative, and retained the power in his
own
hands.
An attempt was
made to amend the resolution
so as to direct the committee to inquire into all
but the House adopted
the affairs of the bank
instead thereof an amendment directing the committee to inspect the books and examine into
the proceedings of the bank, and to report whether the provisions of its charter had been vio;
This amendment was adopted
yeas 106, nays 92 and the committee was appointed, with directions to report by the 21st of
lated or not.
—
April.
fact, made the 30th of
majority of the committee only, Col.
R. M. Johnson, who signed the report of the
majority, stated that he did so for the purpose of
bringing the subject before the House that he
had not asked a single question nor examined a
single paper, and that he neither concurred with,
nor dissented from the majority report. By
that report it appeared, that the investigation had
not been confined to the alleged violations of the
This report was, in
April,
by
j\
;
charter, but had been extended to all the affairs
of the bank. The conclusion at which the majority, consisting of Messrs. Clayton, Carabre-
10
98
leng, Thomas, and R. M. Johnson arrived, from
this investigation was, that Congress should not
act upon the question of re-chartering the bank
until after the
pubhc debt was discharged, and
the revenue adjusted to the expenditure of the
They did not, however,
federal government.
give
lated
as their opinion, that the
it
its
bank had
vio-
charter.
The minority, composed of Messrs. Adams,
M'Duffie, and Watraaugh, made a counter report, vindicating the conduct of the bank, and
recommending a renewal of the charter.
These reports were ordered to be printed for
general circulation, and on the 22d of May the
bill was taken up in committee of the whole in
the senate tor consideration.
Upon motion of Mr. Webster, the bill was
amended by striking out that section, which promore than two branches in a State.
hibited
This section was atterwards restored in the Senate.
He also moved an amendment increasing
the bonus to $2,250,000, and making it payable
in fifteen annual instalments of 8150,000 each,
and prohibiting the banks from issuing notes of
less denomination than 820.
Mr. Moore then offered two amendments.
The
first,
prohibiting
the
establishment
of
branches in a State without the consent of the
State Government, was rejected by a vote of 28
and the second proposing to subject each
to 18
branch to taxation in the same manner, that the
local banks in such State should be taxed, was
and in its stead
rejected by a vote of 26 to 18
was substituted an amendment, providing for
;
;
99
the distribution of the annual bonus among the
respective States, according to the federal num-
This amendment was adopted.
Yeas
was afterwards rejected in
Yeas 16 Nays 31.
the Senate.
Mr. Bibb also moved several amendments.
bers.
25
— Nays 19
The
;
but
it
—
giving to the President, with the conof the Senate, the power of appointing
the president of the bank and its branches
was negatived. Yeas Bibb and Benton Nays
first
sent
—
43.
The second, fixing the rate of interest at 5
per cent, was negatived. Yeas 20
Nays 25.
The third, prohibiting any individual from voting
upon more than thirty shares at an election, was
rejected. Yeas 10
Nays .35.
—
—
Mr. Ewing moved to strike out that provision
prohibiting the bank from holding real estate,
except for banking purposes, for more than two
years but the motion was negatived. Yeas 22
Nays 23 and the time was then enlarged to
—
;
;
lie also moved to strike out the
section prohibiting the issuing of notes less than
fifty dollars, payable at other branches than the
one issuing it, and it was carried. Yeas 24
five
years.
— Nays
15.
Mr. Benton then moved several amendments,
the first to strike out the clause restraining Congress from creating any other banking incorporation during the continuance of the charter,
which wasnegatived. YeaslG— Nays 26. Thesecond prohibiting anymember of Congress, officer
of the federal government, or alien, from holding
100
any stock
Nays
in the
84.
The
6—
bank, was negatived. Yeas
third, rendering stockholders
liable in their private capacities to the
amount
of their stock, for any violations of the engage,
ments of the bank, met with the same fate.
Yeas 11 Nays 33 as did the fourth prohibiting
the issuing of checks or notes payable at other
branches than that where they were issued.
—
;
Yeas 17— Nays 27.
Mr. Marcy then moved
to add a clause expressly retaining in Congress the right to modify or repeal the charter at any time after
Yeas 15 Nays
1836, which was negatived.
—
29.
Mr. Tazewell then moved to limit the charter
which was negatived. Yeas 20
Nays 27. It was then proposed to increase the
annual bonus to 8o25,000, which was negatived.
Yeas 10— Nays 36 and the sums of 8350,000,
8300,000 and 8250,000, were successively neNays 21.
It was finally
gatived. Yeas 10
agreed to fix it at .'i;20"0,000. Yeas 43— Nays
to ten years,
;
—
4.
Mr. White then proposed an amendment by
which the bank was to allow interest at the rate
of three per cent, upon the public deposites,
wheneverthey should exceed $1,000,000. This
was negatived. Yeas 23 Na3s 24. As was a
motion of i\Ir. Benton to refer the bill to the Se-
—
cretary of the Treasury, for his opinion as to the
expediency of renewing the charter at the preNays 37. The bill was
sent session. Yeas 10
—
prepared by the 9th of June for a third reading,
101
and
after
an unsuccessful
effort to indefinitely
was ordered to a third readYeas 25 Nays 20 and on the 11th of
ing.
June was passed. Yeas 28 Nays 20 as folpostpone
lows
it,
it
—
;
—
;
:
—
Yeas Messrs. Bell, Buckner, Chambers,
Clay, Clayton, Dallas, Evving, Foot, Frelinghuysen, Hendricks, Holmes, Johnston, Knight,
Naudain, Poindexter, Prentiss, Robbins, Robinson, Ruggles, Seymour, Silsbee, Smith, Sprague,
Tipton, Tomlinson, Waggaman, Webster, Wilkins.— 28.
Nays
— Messrs.
Benton, Bibb, Brown, Dick-
Hayne,
Kane, King, Mangum, Marcy, Miller,
Moore, Tazewell, Troup, Tyler, White.— 20.
Mr. Dallas said, that having been owner of
stock in the bank he had sold it out as soon as
he knew the subject of re-chartering the bank
would come before the Senate.
Mr. Silsbee said the same.
Mr. Webster said he had seen his name on
the list of stockholders, but it was altogether the
erson, Dudley, Ellis, Forsyth, Grundy,
Hill,
mistake of a Clerk
at
the
Bank
in
Philadel-
phia.
When
it came into the House strenuous ex.
were made to postpone its consideration, but that body having refused by a vote of
111 to 88 to lay the bill upon the table, the minority yielded to a motion of Mr. M'Duffie, that
it be made the special order of the day for the
The House was then, however,
18th of June.
engaged in the consideration of the Tariff, and
it was not until the 30th (jf June that the sub-
ertions
10*
102
was taken up in the Committee of the Whole.
motion then made for its postponement to
the next session was negatived. Yeas 75
Nays 100 and 3Ir. M'Dufiie proposed an amend-
ject
A
;
merit to that section, which limited the number
of branches in each State, providing the existing branches should not be interfered with.
Various attempts were then made to alter this
proposed amendment, so as to incorporate in the
bill all the provisions with v/hich its opponents
sought to restrict the bank.
Mr. Beardsley moved as an amendment that
the Secretary of the Treasury should first certity that the branches retained are necessary
in transacting the public business of the United
Yeas 57 Navs
States, which was negaiived.
113.
iflr. Wardwell moved, that the branches be
liable to be taxed by the States to an amount
not exceeding one per cent, annually, negativ-
—
Yeas 89— Nays 93.
Mr. Warren R. Davis moved an amendment,
ed.
declaring that nothing in this act should be
construed as exempting the bank from being
taxed by the States, negatived. Yeas 81
Nays
103.
Mr. Wayne then moved that the branches
pay an annuity of one per cent, to the State
wherein they are situated, negatived. Yeas 67
—
^Nays
109'.
Mr. Hubbard moved, that the States be permitted 'to tax to the amount of naif per cent.,
negatived.
5lr. Bell
Yeas 81
— Nays 90.
moved, th^t the States be permitted
103
of their respective brandies
income of
their local banks and of their own citizens, negatived.
Yeas 88 Nays 94.
Mr. Mann moved, that a tax of one per cent,
be laid upon all the stock held by foreigners,
negatived. Yeas 69
Nays 110.
Mr. Clayton moved, that foreigners be not
permitted to hold stock in the bank under penalty of forfeiture, and asked the Yeas and
Nays ; but the House refused to order them,
and negatived the motion without a divito tax the
to the
profits
same
extent, that they tax the
—
—
sion.
Mr. Lewis moved
at
five
to limit the rate
per cent., negatived.
of interest
Yeas 83 — Nays
103.
Mr. Clayton also moved an amendment, by
which Congress could incorporate other banks,
which was also negatived.
Mr. M'Kay moved to subject the foreign
stock to the same taxation, that was levied by
the States on the stock of resident citizens.
Yeas 79 Nays 101. Amendments were then
moved to prevent stockholders from receiving
discounts to a larger amount than half of the
stock owned by them, and to prevent officers or
agents of the bank from voting at elections or
proxies, both of which were negatived without
—
a division.
Mr. Thomas then moved to increase the annual bonus to 8'250,000, negatived. Yeas 74
Nays 109.
Mr. Coulter moved to provide for an annual
Committee of inquiry into the affairs of the bank
104
consisting of one Senator and two members of
the House, which was negatived without a division.
Mr. M'Duffie's amendment was then carried,
and a motion being made by Mr. Lewis to reduce the rate of interest to five per cent., the
previous question was moved bv Mr. Barbour,
but it was negatived. Yeas 82
Nays 95. It
was however moved again the next day, July
third, by Mr. Dearborn, and carried. Yeas 96
—
—Nays
82.
The
Bill
third reading.
Yeas 106
was then made
to
was then ordered
—Nays 84.
to a
A motion
suspend the rule of the House
in order to permit the third reading of the bill
—
carried. Yeas 124
Nays 61.
previous question was again called and
ordered, 109 to 76, and the bill was then passed
with Mr. M'DufBe's amendment. Yeas 107
the
same day and
The
Nays 85.
The following
are the Yeas and Nays on the
passage of the bill, viz:
Yeas Messrs. Adams, Chilton Allan, H.
Allen, AIHson, Appleton, Armstrong, Arnold,
Ashby, Babcock, Banks, Noyes, Barber, Baninger, Barstow, Isaac C. Bates, Boon, Briggs,
Bucher, Bullard, Burd, Burgess, Choate, Collier, Lewis Condict, Silas Condict, Elentheros
Cooke, Bates Cooke, Cooper, Corwin, Coulter,
Craig, Crane, Crawford, Creighton, Daniel,
John Davis, Dearborn, Denny, Dewart, Doddridge, Drayton, Ellsworth, G. Evans, Joshua
Evans, Edward Everett, Horace Everett, Ford,
Gilmore, Grennell, Hodges, Heister, Horn,
Hughes, Huntington, Ihrie, Ingersoll, Irvin,
final
—
105
Isaacks, Jenifer, Kendall, Henry, King, Kerr,
Letcher, Mann, Marshall, Maxwell, R. M'Coy,
M'Duffie, M'Kennan, Mercer, Milligan, Newton, Pearce, Pendleton, Pitcher, Potts, Randolph, John Reed, Root, Russell, Semmes,
Shepard, August H. Shepperd,
Smith, Southard, Spence, Stanberry,
Stephens, Stewart, Storrs, Sutherland, Taylor,
Philemon, Thomas, Tompkins, Tracy, Vance
Verplanck, Vinton, Watmaugh, Wilkin, Elisha
Whittlesey, Frederick Whittlesey, E. D. White,
Wickliffe, Williams, Young.— 107.
Nays Messrs. Adair, Alexander, Anderson,
Archer, Barnwell, Jas. Bates, Beardsley, Bell,
William B.
Slade,
—
Bergen, Bethune, James Blair, John Blair,
Bouck, Bouldin, Branch, John C. Brodhead,
Cambreleng, Carr, Chandler, Chinn, Claiborne,
Clay, Clayton, Connor, Davenport, Dayan.
Doubleday, Felder, Fitzgerald, Foster, Gaither,
Gordon, GrifJin, Thomas H. Hall, William
Hall, Hammons, Harper, Hawes, Hawkins,
Hoffman, Hogan, Holland, Howard, Hubbard,
Jarvis, Cave Johnson, Kavanagh, Kendall,
Kennon, Adam King, John King, Lamar, Lansing, Leavitt, Lecompte, Lewis, Lyon, Mardis,
Mason, M'Carty, M'Intire, M'Kay, Mitchell,
Newman,
Nuckolls, Patton, Pierson, Plummer,
Edward C. Reed, Rencher, Roane, Soult,
W.
Speight,
Standifer,
Francis Thomas,
Thompson, John Thompson, Ward, Wardwell,
Wayne, Weeks, Wheeler, Campbell P. White,
Polk,
—
Wilde, Worthington. 85.
The Senate concurred
in
the amendment,
106
and the
bill
was then
his approbation
President for
sent to the
and signature.
It
was by many
apprehended, that the President would resort to
the mode previously adopted by him to avoid
the responsibility of rejecting bills that he disapproved of, and that he would retain it until
after an adjournment of Congress.
To prevent this, the Senate declined acting
on the resolution for an adjournment until the
bill had been sent to him for concurrence, and
then the 16th of .July was inserted so as to leave
ten full days, exclusive of Sundays, by which he
was compelled to return the bill to Congress, or
to permit it to become a law.
Accordingly the
next day after the Senate had fixed the time of
adjournment a message was sent to that body,
stating the reasons of the President for refusing
his signature to the bill.
The great length of the Veto Message prevents its entire insertion ; the reasons assigned by the President are familiar, it is presumed to all, and were in substance as foU
lows
First, That a monopoly is granted to the
present stockholders for which the bonus is not
a fair equivalent.
Second, That more than one fifth of the stock
is held by foreigners.
Third, Because the provision enabling State
banks to pay their balances in branch notes, is
partial towards hanking establishments at the
expense of the community.
Fourth, Because the concession to the States,
:
107
tax the stock held by their own citizens,
operates in favour of foreign stockholders, and
makes the stock worth more to them, than to
and will render the
resident stockholders
American people debtors to aliens by vesting the
stock in foreign hands.
Fifth, Because, by the greater part of the
stock going out of the country, the control over
the institution will be vested in a few stockand great evils are to be apprehendholders
ed, by so formidable a power being concentrated
in a small body, without responsibility to the
people, and who, moreover, will be peculiarly
accessible to be influenced by the foreign stockto
;
;
holders.
Sixth, Because the law creating a bank is
not one of the necessary and proper means
vested in Congress, to carry into effect its con-
powers.
Seventh, Because
stitutional
the private business of
the bank is exempted from State taxation.
Eighth, Because there are strong suspicions of gross abuse in the management of its
affairs.
Ninth,
Because the Executive was not con-
sulted, as to
the propriety of the provisions of
an act creating a bank as an agent of one of its
Departments.
Tenth, Because the bank tended to increase the power of the rich, and to add to
the artificial distinctions already existing in society.
108
That the reader may have full view of the
subject which has so much agitated the American people for the last three years, the compiler inserts the charter entire, as passed April
10, 1816, with notes and comments to the 16th
fundamental
tion.
rule,
and
to the
16th and 23d
sec
AN ACT
TO INCORPORATE THE SUBSCRIBERS TO
THE BANK OF THE UNITED STATES.
Bank
Jl
Be
of the United Slates, with a capital of
$35,000,000.
enacted by the Senate and House of Reof the United States of America, in
Congress assembled, That a Bank of the United
States of America shall be established, with a
capital of thirty-five millions of dollars, divided
into three hundred and fifty thousand shares, of
one hundred dollars each share. Seventy thousand shares, amounting to the sum of seven
millions of dollars, part of the capital of the
said bank, shall be subscribed and paid for by
the United States, in the manner hereinafter
specified ; and two hundred and eighty thousand
shares, amounting to the sum of twenty-eight
niiUions of dollars, shall be subscribed and paid
it
"prcsentatlves
.
for
by
in the
individuals, companies, or corporations,
manner
11
hereinafter specified.
110
Plates, Aa. /or receiutng Subjcnplimis.
Sectio:n 3. And be it further enacted, That
subscriptions for the sum of twenty-eight millions of dollars, towards constituting the capital
of the said bank, shall be opened on the first
Monday in July next, at the following places,
that is to say: at Portland, in the District of
Maine
at Portsmouth, in the State of NewHampshire at Boston, in the State of Massachusetts
at Providence, in the State of Rhode
Island
at Middletown, in the State of Connecticut
at Burlington, in the State of Vermont
at New-York, in the State of New- York
at
New-Brunswick, in the State of New-Jersey
;
;
;
;
;
;
State of Pennsylvania ;
the State of Delaware
at
Baltimore, in the State of Maryland
at Richmond, in the State of Virginia at Lexington,
at Cincinnati, in the
in the State of Kentucky
State of Ohio; at Raleigh, in the State of North
Carolina; at Nashville, in the State of Tennessee
at Charleston, in the State of South
Carolina ; at Augusta, in the State of Georgia ;
at New-Orleans, in the State of Louisiana
and
at Washington, in the District of Columbia.
And the said subscriptions shall be opened under the superintendence of five commissioners
at Philadelphia, and of three commissioners at
each of the other places aforesaid, to be appointed by the President of the United States,
who is hereby authorized to make such appointments, and shall continue open every day, from
the time of opening the same, between the
at Philadelphia, in the
at
Wilmington,
in
;
;
;
;
;
Ill
hours of 'cn o'clock
in iIig
*
forenoon and four
o'clock in tlie allernoon, for the term of twenty
days, exclusive of Sundays, wlieu the sawe
sliall be closed, and immediately thereafter the
commissioners, or any two of them, at the respective places aforesaid, shall cause two transcripts or copies of such suLsotiptions to be
made, one of which they shall send to the Secretary of the Treasury, one they shall retain,
and the original they shall transmit, ^vithiu
seven days from the closing of the subscriptions
as aforesaid, to the commissioners at PhiladelAnd on the receipt of the said
phia aforesaid.
original subscriptions, or of either of the said
copies thereof, if the original be lost, mislaid,
or detained, the commissioners at Philadelphia
aforesaid, or a majority of them, shall immediately thereafter convene, and proceed to take
an accounl, of the said subscriptions. And if
more than the amount of twentj'-eight millions
of dollars shall have been subscribed, then the
said last mentioned commissioners shall
the
amount of such excess from the
scriptions, in such
tion shall be
manner
as that no subscripamount, while any one
Provided, That, if the sub-
reduced
remains larger
:
deduct
largest sub-
in
scriptions taken at either ef the places aforesaid
exceed three thous^and shares, there
be no reduction of such subscriptions; nor
shall, in any case, the subscriptions taken at
either of the places aforesaid be reduced below
that amount.
And in case the aggregate
amount of the said subscriptions shall exceed
twenty-eight millions of dollars, the smd kist
shall not
shall
112
mentioned commissioners,
tioned the
of
t1ie
made
same as
said
after
having appor-
aforesaid, shall cause lists
apportioned
out, including in
subscriptions
each
list
to
be
the apportioned
subscription for the place where the
original
subscription was made, one of which lists they
shall transmit to the commissioners, or one of
them, under whose superijitendence such subscriptions were originally made, that the subscribers may thereby ascertain the number of
shares to them respectively apportioned as
And in case the aggregate amount
of the said subscriptions, made during the pe-
aforesaid.
riod aforesaid, at all the places aforesaid, shall
not amount to twenty-eight millions of dollars,
the subscriptions to complete the said sum shall
be and remain open at Philadelphia aforesaid,
under the superintendence of the commissioners
and the subscriptions
appointed for that place
may be then made by any individual, companvj
or corporation, for any number of shares, not
exceeding, in the whole, the amount required to
complete the said sum of twenty-eight millions
;
of dollars.
Regulations concerning Subscriptions, and Payments on
them, kc.
Section 3. And be it further enacted. That it
be lawful for any individual, company,
shall
corporation, or
state,
when
the
subscriptions
opened as hereinbefore directed, to
subscribe for any number of shares of the capital of said bank, not exceeding three thousand
shares, and the sums so subscpibed shall be
shall
be
113
payable, and paid, in the manner following, that
seven raillious of dollars thereof in
is to say
gold or silver coin of the United States, or ia
gold coins of Spain, or the dominions of Spain,
at the rate of one hundred cents for every
twenty-eight grains and sixty hundredths of a
grain of the actual weight thereof, or in other
foreign gold or silver coin, at the several rates
prescribed by the first section of an act regulating the currency of foreign coins in the
United States, passed the tenth day of April,
one tlionsand eiglit hundred and six, and twenty<one millions of dollars thereof in like gold or
silver coin, or in the funded debt of the United
States, contracted at the times of the subscrip:
And the payments made in
the funded debt of the United States, shall be
paid and received at the following rates, that is
tions, respectively.
the funded debt bearing an interest of
at the nominal or
par value thereof; the funded debt bearing an
to
say
:
six per
centum per annum,
interest of three per
centum per urmum,
rate of sixtv-five dollars for every
at the
sum of one
hundred dollars of the nominal amount thereof;
and the fun<led debt bearing an interest of seven
per centum per anaum, at the rate of one hundred and six dollars, and fifty-one cents, for
every sum of one hundred dollars of the nominal amount thereof;
together with the amount
of the interest accrued on the said several denominations of funded debt; to be computed
and allowed to the time of snbscribinfj the same
to the capital of the said bank as aforesaid.
And the payments of the said subscriptions
11-
114
he made and completed by the subscriber?respectively, at the time, and in the manner foilowing, that is to say: at the time of subscrib-
shall
ing there shall be paid five dollars on each
share, in gold or silver coin as aforesaid, and
twenty-five dollars more in coin as aforesaid, or
in funded debt as aforesaid
at the expiration of
six calendar months after the time of subscribing^
there shall be paid the further sum often dollars
on each share, in gold or silver coins, as aforesaid, and twenty.five dollars more in coin as
at
aforesaid, or in funded debt as aforesaid
the expiration of twelve calendar months from
the time of subscribing, there shall be paid the
further sum often dollars on each share, in gold
or silver coin as aforesaid, and twenty-five dollars more in coin as aforesaid, or in funded debt
;
;
as aforesaid.
SECTfON
4. A7id be it further enacted, That,
time of subscribing to the capital of the
said bank as aforesaid, each and every subscriber shall deliver to the commissioners, at
the place of subscribing, as well the amount of
their subscriptions, respectively, in coin as
aforesaid, as the certificates of funded debt, for
the funded debt proportions of their respective
subscriptions, together with a power of attorney,
authorizing the said commissioners, or a majority of them, to transfer the said stock, in due
form of law, to " the president, directors, and
company of the Bank of the United States," as
soon as the bank shall be organized Provided
always, That if, in consequence of the apportionment of the shares in the capital of the said
at the
:
115
bank among the subscribers in the case, ami in
the manner hereinbefore provided, any subscriber shall have delivered to the commissioners, at the time of subscribing, a greater amount
of gold or silver coin and funded debt than shall
be necessary to complete the payments for the
share or shares to such subscribers, apportioned
as aforesaid, the commissioners shall only retain so much of the said gold or silver coin and
funded debt as shall be necessary to complete
such payments, and shall, forthwith, return the
surplus thereof, on apphcation for the same to
subscribers lawfully entitled thereto.
And the
commissioners, respectively, shall deposit the
gold and silver coin, and certificates of public
debt, by them respectively received as aforesaid, from the subscribers to the capital of the
said bank, in some place of secure and safe
keeping, so that the same may and shall be specifically delivered
and transferred, as the same
were by them respectively received,
to
the
the Sank
of the United States, or to their order, as soon
as shall be required after the organization of the
said bank.
And the said commissioners ap-
president, directors, and
company of
pointed to superintend the subscriptions to tlie
capital of the said bank as aforesaid, shall receive a reasonable compensation for their serrespectively, and shall be allowed all
reasonable charges and expenses incurred in
the execution of their trust, to be paid by the
president, directors, and company of the bank,
out of the lands thereof.
vices,
116
Tfi6
United Slates may redetm the funded debt, &c., and
the bank may sell for gold and silver, &c.
Section
And
5.
he
it
further enacted, That
tt
be lawful for the United States to pay and
redeem the funded debt subscribed to the capital of the said bank, at the rates aforesaid, in
such sums, and at such times, as shall be
shall
deemed
expedient, any thing in any act or acts
contrary thereof notwithstanding.
And it shall also be lawful for the
president, directors, and company, of the said
bank, to sell and transfer, for gold and silver
coin, or bullion, the funded debt subscribed to
Prothe capital of the said bank as aforesaid.
vided always, That they shall not sell more
thereof than the sum of two millions of dollars in
any one year nor sell any part thereof at any
time, within the United States, without previously giving notice of their intention to the Secretary of the Treasury, and offering the same
to the United States for the period of fifteen
days, at least, at the current price, not exceeding
of congress to the
;
the rates aforesaid.
The Secretary of
the Treasury to subscribe
on behalf of
the United Slates.
at
Section 6. Ajid he it further enacted, That,
the opening of subscription to the capital
stock of the said bank, the Secretary of the
Treasury shall subscribe, or cause to be subscribed, on behalf of the United States, the said
number of twenty thousand shares, amounting
to seven millions of dollars as aforesaid, to be
117
paid in gold or silver coin, or in stock of the
United States, bearing interest at the rate of
five per centum per annum ; and if payment
thereof, or of any part thereof, be made in pub.
lie stock, bearing interest as aforesaid, the said
interest shall be payable quarterly, to commence
from the time of making such payment on acand the princount of the said subscription
cipal of the said stock shall be redeemable in
any sums, and at any period, which the government shall deem fit. And the Secretary of the
Treasury shall cause the certificates of such
;
public stock to be prepared, and made in the
usual form, and shall pay and deliver the same
to the president, directors, and company of the
said bank, on the first day of January, one thou-
sand eight hundred and seventeen, which said
stock it shall be lawful for the said president, directors, and company, to sell and transfer for
gold and silver coin or bullion, at their discreProvided, They sliall not sell more than
tion
two millions of dollars thereof in any one
:
year.
The
subscribers to (he
hank incorporated, kc,
name and
their
style.
Section 7. And he it further enacted, That
the subscribers to the said Bank of the United
States of America, their successors and assigns,
shall be, and are hereby, created a corporation
and body politic, by the name and style of " The
president, directors, and company of the Bank
of the United States," and shall so continue
until the
3d day of March,
in the
year one thou-
118
sand eight hundred and thirty-six, and by thaf
name shall bo, and are hereby, made able, and
capable, in law, to have, purchase, receive,
possess, enjoy, and retain, to them and their
successors, lands, rents, tenements, heredita-
ments, goods, chattels, and effects, of whatsoever kind, nature, and quality, to an amount not
exceeding, in the whole, fifty-five millions of
dollars, including the amotrnt of the capital
and the same to sell, grant,
stock aforesaid
demise, lien, or dispose of; and to sue and be
sued, plead and be impleaded, answer and be
answered, defend and be defended, in all state;
courts having competent jurisdiction, and in any
circuit court of the United States ; and also to
make, have, and use, a common seal, and the
to break, alter, and renew, at their pleaand also to ordain, establish, and put in
sure
execution, such by-laws, and ordin^ances, and
regulations, as thcv shall deem necessary and
convenient for the £ 'Vernment of the said corporation, not being contrary to the constitution
thereof, or the laws of the United States ; and
generally to do and execute all and singular the
eame
;
acts, matters,
and things, which
to
them
it
shall
may
appertain to do; subject, nevertheless,
to the rules, regulations, restrictions, limitations,
and provisions, hereinafter prescribed and deor
clared.
Twenty-Jivt directors—Jive to be appointed by the
President, Sec.
Section
for the
8.
And
be
it
management of
further enacted, That,
affairs of the said
the
119
eorporation, there shall be twenty. five directors^
five of whom, being stockholders, shall be annually appointed by the President of the United
by and with the advice and consent of
more than three of whom shall
any one State and twenty of
whom shall be annually elected at the banking
house in the city of Philadelphia, on the first
Monday of January, in each year, by the qualiStates,
the Senate, not
be residents of
;
fied stockholders of the capital of the said bank,
other than the United States, and by a plurality
of votes, then and there actually given, according to the scale of voting, hereinafter prescribed.
Provided always, That no person, being a direc.
tor in the Bank of the United States, or any of
its branches, shall be a director of any other
bank ; and should any such director act as a
director in any other bank, it shajl forthwith
vacate his appointment in the direction of the
Bank of the United States. And the directors,
so duly appointed and elected, shall be capable
of serving, by virtue of such appointment and
choice, from the first Monday in the month of
January in each year, until the end and expiration of the first Monday in the month of January,
the year next ensuing, the time of each annual
election to be held by the stockholders, as
aforesaid.
And the board of directors, annually,
meeting after their election in each
and every year, shall proceed to elect one of the
directors to be president of the corporation, who
at their first
same period
appointed and elected,
shall hold the said office during the
for
which the
as aforesaid
direc?tors are
:
Provided
also,
That the
first
ap-
120
pointment and election of the directors and president of the said bank shall be at the time and
for the period hereinafter declared
And pro'
vided also. That, in case it should at any time
happen that an appointment or election of directors, or an election of the president of the said
bank, should not be so made as to take eflect on
any day. when, in pursuance of this act, they
ought to take effect, the said corporation shall
not, for that cause, be deemed to be dissolved ;
but it shall be lawful at any other time to make
such appointments, and hold such elections, (as
the case may be,) and the manner of holding the
election shall be regulated by the by-laws and
ordinances of the said corporation and until
such appointments or elections be made, the
directors and president of the said bank, for the
time being, shall continue in office
And provided also. That in case of the death, resignation,
or removal, of the president of the said corporation, the directors shall proceed to elect another
president from the directors, as aforesaid ; and
in case of the death, resignation, or absence from
the United States, or removal of a director from
office, the vacancy shall be supplied by the
President of the United States, or by the stockholders, as the case maybe.
But the President
of the United States alone shall have power to
remove any of the directors appointed by him,
:
:
:
as aforesaid.
Manner and
Section
time of the bank''s going into operation,
9.
as soon as the
sum
Sec.
further enacted, That,
of eight millions four hun-
Aiid be
it
121
gold and silver coin,
have been actually
received on account of the subscriptions to
the capital of the said bank (exclusively of
the subscription aforesaid, on the part of
the United States) notice thereof shall be
given by the persons under whose superintendence the subscriptions shall have been
made at the city of Philadelphia, in at least two
newspapers printed in each of the places (if so
many be printed in such places respectively)
where subscriptions shall have been made, and
the said person shall, at the same time, and in
like manner, notify a time and place, within the
said city of Philadelphia, at the distance of at
least thirty days from the time of such notification, for proceeding to the election of twenty
directors as aforesaid; and it shall be lawful for
such election to be then and there made. And
the President of the United States is hereby
authorized, during the present session of congress, to nominate, and, by and with the advice
and consent of the senate, to appoint, five
directors of the said bank, though not stockholders, any thing in the provisions of this act
to the contrary notwithstanding ; and the persons who shall be elected and appointed as
aforesaid, shall be the first directors of the said
bank, and shall proceed to elect one of the
directors to be president of the said bank ; and
the directors and president of the said bank, so
appointed and elected as aforesaid, shall be capable of serving in their respective office, by
virtue thereof, until the end and expiration of
dred thousand dollars,
and
in
in the public debt, shall
12
122
first Monday of the month of January next
ensuing the said appointments and elections
and they shall then and thenceforth commence
and continue the operation of the said bank, at
the city of Philadelphia.
the
;
The directors empowered
to
appoint
officers, clerks, servants,
kc.
Section 10. And be it further enacted, That
the directors for the time bein^ shall have power
to appoint such officers, clerks, and servants
under them, as shall be necessary for executing
the business of the said corporation, and to allow
them such compensation for their services, respectively, as shall be reasonable ; and shall be
capable of exercising such other powers and authorities for the well governing and ordering of
the officers of the said corporation, as shall be
prescribed, fixed, and determined by the laws,
regulations, and ordinances of the same.
Fundamental
Section 11. And be
the
following
rules,
it
articles.
further enacted, That
restrictions,
limitations,
and provisions, shall form and be fundamental
articles of the constitution of the said corporation, to wit
:
Rules concerning voting for
First,
directors.
The number of votes to which the stock-
holder shall be entitled, in voting for directors,
shall be according to the number of shares he,
she, or they, respectively, shall hold, in the pro-
portions fellowing, that
is to
say, for one share.
123
and not more than two shares, one vote; for
every two shares above two, and not exceeding
for every four shares above ten,
len, one vote
and not exceeding thirty, one vote for every
six shares above thirty, and not exceeding sixty,
one vote for every eight shares above sixty,
and not exceeding one hundred, one vote and
for every ten shares above one hundred, one
but no person, copartnership, or body
vote
poHtic, shall be entitled to a greater number than
;
;
;
;
:
and, after the first election, no
share or shares shall confer a right of voting,
which shall not have been holden three calendar
months previous to the day of election. And
stockholders actually resident within the United
States, and none other, may vote in elections by
proxy.
Second, Not more than three-fourths of the
directors elected by the stockholders, and not
more than four-fifths of the directors appointed
by the President of the United States, who shall
be in office at the time of an annual election,
shall be elected or appointed for the next succeeding year; and no director shall hold his
office more than three years out of four in succession but the director who shall be the president at the time of an election may always be
re-appointed or re-elected, as the case may be.
Third, None but a stockholder, resident citizen of the United States, shall be a director
nor shall a director be entitled to any emolument but the directors may make such compensation to the president for his extraordinary
thirty votes
;
;
;
124
aftendanee at the bank, as shall appear to them
reasonable.
Fourth, Not less than seven directors shall
constitute a board for the transaction of business,
of whom the president shall always be one, except in case of sickness or necessary absence
in which case, his place maybe supplied by any
other director whom he, by writing under his
hand, shall depute for that purpose. And the director so deputed, may do and transact all the
necessary business, belonging to the office of the
president of the said corporation, during the continuance of the sickness or necessary absence
of the president.
Fifth, A number of stockholders, not less than
sixty, who, together, shall be proprietors of one
thousand shares or upwards, shall have power at
any time to call a general meeting of the stockholders, for purposes relative to the institution,
giving at least ten weeks' notice in two public
newspapers of the place where the bank is
seated, and specitying in such notice the object
or objects of such meeting.
Sixth, Each cashier or treasurer, before he
enters upon the duties of his office, shall be required to give bond, with two or more sureties,
to the satisfaction of the directors, in a sum not
less than fifty thousand dollars, with a condition
for his good behaviour, and the faithful performance of his duties to the corporation.
Seventh, The lands, tenements, and heredita.
ments, which it shall be lawful for the said corporation to hold, shall be only such as shall be
125
immediate accommodation in re
convenient transaeting of its business, and such as shall have been bona fide mortgaged to it by way of security or conveyed to it
in satisfaction of debts previously contracted in
the course of its dealings, or purchased at sales,
upon judgments which shall have been obtained
for such debts.
Eighth, The total amount of debts which the
said corporation shall at any time owe, whether
by bond, bill, note, or other contract, over and
above the debt or debts due for money deposited
in the bank, shall not exceed the sum of thirtyrequisite for
its
lation to the
five millions of dollars, unless the contracting
of any greater debt shall have been previously
authorized by law of the United States.
In case
of excess, the directors, under whose administration it shall happen, shall be liable for the same
and private capacities and an
may, in such cases, be brought
against them, or any of them, their or any of
their heirs, executors, or administrators, in any
in their natural
;
action of debt
court of record of the United States, or either
of them, by any creditor or creditors of the said
corporation, and maybe prosecuted to judgment
and execution
any condition, covenant, or
agreement to the contrary notwithstanding.
But this provision shall not be construed to exempt the said corporation, or the lands, tenements, goods, or chattels of the same, from being
also liable for, and chargeable with, the said exSuch of the said directors, who may have
cess.
been absent when the said excess was contracted
;
or created, or
12*
who may have
dissented from the
126
resolution or act whereby the same was so contracted or created, may respectively exonerate
themselves from being so liable, by forthwith
giving notice of the fact, and of their absence
or dissent, to the President of the United States,
and to the stockholders, at a general meeting,
which they shall have power to call for that purpose.
Ninlh, The said corporation shall not, directly
or indirectly, deal or trade in any thing except
bills of exchange, gold or silver bullion, or in the
sale of goods, really and truly pledged, for money
lent and not redeemed in due time, or goods
which shall be the proceeds of its lands. It
shall not be at liberty to purchase any public
debt whatsoever, nor shall it take more than at
the rate of six per cent, per annum, for or upon
its loans or discounts.
Tenth, No loan shall be made by the said
corporation, for the use or on account of the government of the United States, to an amount
exceeding five hundred thousand dollars, of any
particular state, to an amount exceeding fifty
thousand dollars, or of any foreign prince or
state, unless previously authorized by a law of
the United States.
Eleventh, The stock of the said corporation
shall be assignable and transferable, according
to such rules as shall be instituted in that behalf,
by the laws and ordinances of the same.
Ticelvth, The bills, obligatory and of credit,
under the seal of the said corporation, which
shall be made to any person or persons, shall be
assignable by endorsement thereupon, under
127
the hand or hands of such person or persons,
and his, her, or their executors or administrators, and his, her, or their assignee or assignees,
and so as absolutely to transfer and vest the
property thereof in each and every assignee or
assignees, successively, and to enable such assignee or assignees, and his, her, or their executors or administrators, to maintain an action
thereupon, in his, her, or their own name or
names Provided, That said corporation shall
not make any bill, obligatory or of credit, or
other obligations under its seal, for the payment
of a sum less than five thousand dollars. And
the bills or notes which may be issued by order
of the said corporation, signed by the president, and countersigned by the principal cashier
or treasurer thereof, promising the payment of
money to any person or persons, his, her, or
their order, or to bearer, nUhoughnot under the
seal of the said corporation, shall be binding
:
and obligatory upon the same, in like manner,
and with like force and effect, as upon any private person or persons, if issued by him, her,
or them, in his, her, or their private or natural
capacity or capacities, and shall be assignable
and negotiable in like manner as if they were
so issued by such private person or persons ;
that is to say, those which shall be payable to
any person or persons, his, her, or their order,
shall be assignable by endorsement, in like
manner, and with the like effect as foreign bills
of exchange now are
and those which are
payable to bearer, shall be assignable and ne;
by delivery only Provided, That all
or notes, so to be issued by said corpora-
gotiable
bills
:
128
tion, shall
be made payable on demand, other
or notes for the payment of a sum not
less than one hundred dollars each, and payable to the order of some person or persons,
which bills or notes it shall be lawful for said
than
bills
corporation to make payable at any time not
exceeding sixty days from the date thereof.
Thirteenth, Halfyear dividends shall be made
of so much of the profits of the bank as shall apand once in
pear to the directors advisable
every three years the directors shall lay before
the stockholders, at a general meeting, for their
information, an exact and particular statement of
the debts which shall have remained unpaid
after the expiration of the original credit, for a
period of treble the term of that credit, and of
the surplus of the profits, if any, after deducting
losses and dividends. If there shall be a failure
in the payment of any part of any sum. subscribed to the capital of the said bank, by any
person, copartnership, or body politic, the party
failing shall lose the benefit of any dividend
which may have occurred prior to the time of
making such payment and during the delay of
the same.
Fourteenth, The directors of the said corporation shall establish a competent office of discount and deposite in the district of Columbia,
whenever any law of the United States shall
also one such
require such an establishment
office of discount and deposite in any state in
which two thousand shares shall have been subscribed or may be held, whenever, upon application of the legislature of such state, Congress
;
;
129
may, by law, require the same
:
Provided,
The
bound to establish such office before the whole of the capital
And it
of the bank shall have been paid up.
directors aforesaid shall not be
shall be lawful for the directors of the said corporation to establish offices of discount and deposite, wheresoever they shall think fit, within
the United States or the territories thereof, and
to commit the management of the said offices,
and the business thereof respectively, to such
persons, and under such regulations, as they
shall deem proper, not being contrary to law or
the constitution of the bank.
Or, instead of
establishing such offices, it shall be lawful for
the directors of the said corporation, from time
to time, to employ any other bank or banks, to
be first approved by the Secretary of the Treasury, at any place or places that they deem safe
and proper, to manage and transact the business
proposed as aforesaid, other than for the purposes of discount, to be managed and transacted
by such
offices
under such agreements, and
subject to such regulations, as they shall
deem
and proper. Not more than thirteen, nor
less than seven managers or directors, of every
office established as aforesaid, shall be annually
appointed by the directors of the bank, to serve
one year
they shall choose a president from
their own number each of them shall be a citizen of the United States, and a resident of the
state, territory, or district, wherein such office
is established
and not more than three-fourths
just
;
;
;
of the said managers or directors, in office at
the time of an annual appointment, shall be re-
130
appointed for the next succeeding year
and
shall hold his office more than three
years-out of four in succession
but the president may always be reappointed.
Fifteenth, The officer at the head of the
Treasury Department of the United States
shall be furnished, from time to time, as often as
he may require, not exceeding once a week,
with statements of the amount of the capital
stock of the said corporation, and of the debts due
to the same
of the moneys deposited f/jerein, q/"
the notes in circulation, and of the specie on
hand
and shall have a right to inspect such
general accounts in the books of the bank as
shall relate to the said statement
Provided,
That this shall not be construed to imply a right
of inspecting the account of any private individual or individuals with the bank.
Sixteenth, No stockholder, unless he be a
citizen of the United States, shall vote in the
choice of directors.*
;
no director
;
;
;
:
* The object of this clause undoubtedly was, to guard
against any foreign influence that might, directly or indirectly,
creep into the institutions of our country ; and whilst die government have wisely fortified the administration of the affairs
of tlie bank against every avenue that might seem to admit of
any dangerous exercise of power, they have, with equal wisdom, left the stock to find its proper value, both in the foreign
and domestic market. Stock, like any kind of unprohibited
merchandise, has for years been an article of traffic in all civilized countries. A large proportion of the stock of the state
of New-York, called " Canal Stocks," also the stocks of other
states, and of local banks, are owned by foreigners.
majority of tlie stock of die Manhattan Bank in the city of NewYork, one of the depositories of the public funds, is said to b«
owned by a single foreigner, who has the right of voting for
A
131
Seventeenth,
amount than
directors;
No
note shall be issued of le3s
five dollars.
and can choose president,
directors, cashier,
and
all
other officers or agents of the institution. The interest both
of government, and of individuals, is frequently promoted by
the sale of stocks in foreign markets.
Suppose, for instance, as it is frequently the case, a scarcity
of money, and a consequent high rate of interest in the United'
States, whilst at the same time, there is an abundance, and a
consequent low rate in Europe; the government, on an emergency, from the general confidence of capitalists in stocks',
would be enabled to immediately raise funds for any national
object on more favourable terms, than if the sale of American
stocks to foreigners was prohibited. Suppose, also, an American owner of stock, bearing an interest of seven per cent.,
desirous of selling the same, he would consider it, and very
justly, an act of great injustice, to be prohibited from selecting
the best purchaser.
Money, in the American market, for ordinary business
transactions, might be worth, on the best securities, seven per
cent. ; and at the same time, and for the same purposes, iti
Europe, not more than four per cent. the consequence of
this state of things would be, that the American owner of
—
stock, if restricted in his sale to an American citizen, would
realize only a hundred cents on a dollar of its nominal
amount; whereas, if permitted to sell it to a foreigner, h6
might realize 10, 15, or 20 per cent, profit.
There would be as much propriety in prohibiting a farmer",
in time of peace, from selling his wheat and other productions
in a foreign market, and at an advanced price, as in prohibiting hitn, in like manner, from the sale of stifcks. The principle might appear too evident to need a word of comment or
illustration indeed, the subject would not have been mentioned, had it not been for the sake of noticing some singular
;
and extraordinary remarks in the Message of the President
of the United States, of July 10th, 1832, vetoing the bill " to
modify and continue the present bank charter," of which the
following are extracts.
" Should the stock of the bank principally pass into the
hands of Ike subjects of a, foreign countrij, and ice should unfortunately become involved in a rear vilh thai cnunlry, vhat
would be our condition
Of the course which w ould be pur'!
132
Penalties for dealing in a
way
or inarlicks interdicted.
Sec. 13. And be it further enacted, That if
the said corporation, or any person or persons
sued by a bank almost wholly owned by the subjects of a
foreign power, and managed by those whose interests, if not
affections, would run in the same direction, there can be no
doubt. All its operations within, would be in aid of the hostile
fleets and armies without; controlling our currency; receiving our public moneys, and holding thousands of our citizens
in dependence, it vwuld he more formidable and dangerous
than the iiaval and miliiary power oj the enemy.
" If we must have a bank with private stockholders, every
consideration of sound policy, and every impulse of American
feeling, admonish that it should be purely American, lis
stockholders should be composed exclusively of our own
citizens, who, at least, ought to be friendly to our government,
and willing to support it in times of difficulty and danger. So
abundant is domestic capital, that competition, in subscribing
for the stock of local banks, has recently led almost to riots.
T'o a bank, exclusively of American stockholders, possessing
the powers and privileges granted by this act, subscriptions
for two hundred millions of dollars might be readily obtained.
Instead of sending abroad the stock of the bank, in which the
government must deposit its funds, and on which it must rely
to sustain its credit in time of emergency, it woidd rather seem
to be expedient to prohibit its sales to aliens, under penalty
of absolute forfeiture."
''^
Had sentiments similar to those contained in the foregoing
extract, been avewed by the ordinary class of porter-house
politicians, some excuse, in the whole range of human charity,
might be afforded.
might condemn Ihe principle, while
pitying the ignorance and stupidity from which it proceeded
—but considering that it emanated from the chief magistrate
of a nation, professing to be the most enlightened in the world,
I am led to believe, that thousands, on reading the production,
experienced the same sensations that I did ; I considered myself as an American citizen degraded ; I considered the whole
nation, in the eyes of true patriotism and intelligence, degraded ; and I should feel as though I was rendering the
country, did I but
greatest service to the reputation of
— We
my
possess the power, and then exercise
it,
of not only oblite-
133
or to the use of the same, shall deal or
trade in buying or selling, goods, wares, metifor,
extract from the face of paper, but from the
of the human race. In it we are told, in substance,
that although foreign stockholders have no voice in the selection of directors chosen to manage the concerns of the bank,
still these very foreigners would possess an influence and con"trol over the directors, inimical to the best interests of the
country that in the event of a war, although American citizens have the exclusive control of the funds of the enemy,
still such control, and " all its operations witliin (meaning the
operation of the Bank within the United States) would be in
aid of the hostile fleets F.nd armies without," (that is, if the
Americans were to employ the funds of the bank in providing
men and the implements of war to repel the hostile attacks of
the enemy, still such a measure " would be in aid of hostile
fleets and armies without.")
Suppose the enemy were to
surrender into our hands " their hostile fleets and armies,"
"
would such an event be in aid of the hostile fleets andarmi
ratiug'
this
memory
—
without."
Seriously, the topic is too insignificant to merit one mo*
ment's discussion the only consideration that it is worthy ofj
Had a merchant
is cither that of contemi)t or of ridicule.
promulgated such doctrines as those avowed by President
Jackson, he would have been considered by all men of ordinary understanding, either insane, or as wanting common
honesty, or common sense. And had a person ten years ago
predicted, that in the short period of eight years, a chief magistrate of these United States, after avowing such sentiments,
would be re-elected with acclamation, to that exalted station,
I should have considered it a wilful slander upon the intelligence, sagacity, and patriotism of the Amflrican people. But
time has shown that what the imagination might have painted
as a fiction, or an impossibility, exists in reality that which
may be fairly considered an insult upon the understanding of
the American people has been ratified by a majority of themselves; and considering that they are thus deluded by their
President, what may not be expected from the jiress of the
country, dcvoled to him, or under his control ? These remarks
are induced from an article in the Albany Argus, of the 26th
of May, 1834, which says: " During the very period whea the
United States Bank was curtailing its accon)modations to an
amount of about twenty-eight millions of dollars in sixteen
—
—
months, and when the merchants were falling before
13
its
mighty
134
chandi&es, or commodities, ^vho(6oc^ er, contrary to the provisions of liiis act, all and every
power, Mr. Bicldle, who controls the hank hv the aid of
proxies from British lords, loaned twoliundred tliousand dollars to construct a canal in Canada, a rival to the Erie Canal
and loaned, as has been alleged and not denied by the hired
presses of the bank, eight liundred thousand dollars to an
ag'ent of the Barings, of London."
I shall never forget tlie
indignation, I mighf say almost fury, manifested by a young
and ardent politician, towards the bank, on reading this article
in the Argus, when a bystander gently observed to him,
"Young man, do yon know that the editor of the Argus is deceiving you do j'ou not know that a foreigner cannot vote
on his stock ?" "Deceiving me!" .-^aid the young politician,
•
—
—
" I don't believe it the editor of the Albany Argus is state
printer his papeVhas a greater circulation than any other in
the state he is the organ of the republican party : do you
suppose," said he, "that the rei)ublican members of the legislature would employ one as State printer that would pubfish
a falsehood ?" " I do not suppose any thing about it," said
the bv'stander, " I know that a foreigner cannot vote on his
stock." " I'll bet you ten dollars of it," said the young politician.
"I don't wish to bet," said the bystander, "I know
and I perceive you do not." '.'Ah-hah!" said he, wagging
Lis head, "you dare not bet." "Dare not I" said thebystander, " I don't wish to take your money." "I'm able to
lose ten dollars," said the young politician, "but if I don't
lose ten dollars till I lose it on such a bet, I shall never be
poorer on that account I say. sir, }-ou dare not bet me."
" Young man," said the bystander, " 1 perceive that you have
a wonderful deal of assurance I have told you once that I
did not want your money; if you wish to give me ten dollars,
say 30 : or ifj-ou insist upon betting, so be it. I bet with you
upon no other principle than thinking that the loss of ten
dollars may teach you prudence, and not to trust too much to
euch newspapers as the Albany Argus." The money was
staked the Bank Charter was produced and the holder of
the stakes decided in favour of the bystander. The Albany
Ar^us, as stated by the young jiolitician, is state printer the
article undoubtedly had the effect intended
to inflame the
passions of the ignorant. But, of what consequence is it to
the editor of the Albany Ar!:us,if a few dollars are lost by
the ignorant, in consequence of his misrepresentations. He
is a siigacious mau, ctad a poUlici*B, Luowing that there are
—
—
—
—
—
—
—
—
—
135
person or porfjons by whosn any order or dlYccfor so dealing or trading shall have been
given, and all and every person and persons
tion
who
shall
have been concerned as parties ©r
agents therein, shall forfeit and lose treble the
value of the goods, w;ires, merchandises, and
commodities, in which such dealing and trade
shall have been, oiie half tiiereof to the use of
the informer, and the other thereof to the use
of the United States, to be recovered in any
action of law, with costs of suit.
Penalties for mnkins: unlawful loans to the United Stales,
or particular Stales, or to foreign governmenU.
if
Section 13. And he it further enacted. That,
the said corporation shall advance or lend any
in the country who are told that they are moro cnliglitened than any other people in the civilized world, hut in
reality who never read scarcely any thin^ besides a corrupt
thousands
partisan newspaper; whose habits and education are such as
never lead them to a calm, dispassionate reflection upon any
subject. Men that are influenced by their passions insto id of
their reason.
-Men that have no fixed principles of their own.
Men that are led l)y artful and ambitious demagogues, who,
after accomplishinjr their selfish objects, laugh iu their sleeves
at those who have been made their tools.
Hundreds of misrepresentations, in relation to the Bank of
the United States, similar to that of the Albany Argus, and
made by partisan newspapers, mi^ht be shown ; but th<j limits
of this work will not admit of their insertion. Indeed, a work
of this size would scarcely begin to contain them. If a persort
will take the trouble to examine, he will find that scarcely an
editorial article upon the subject of the Bank of the United
States appears iu the Globe, and other kindred prints, but
that id falsely stated or falsely coloured
and so long ns the
people will bo influenced by such papers so long will they
ho siibj 'cts of error, and blind to their own interests, and the
general interests of the community.
Compiler
—
—
:
—
—
13G
sum of money
for use or on account of the government of the United States, to an amount exceeding five hundred thousand dollars or of
any particular state, to an amount exceeding fifty
thousand dollars; orofanyforeign prince or state,
(unless previously authorized thereto by a law
of the United States,) all and every person and
persons, by and with whose order, agreement,
consent, approbation, and connivance, such unlawful advance or loan shall have been made,
upon conviction thereof, shall forfeit and pay, for
every such offence, treble the value or amount of
the sum or sums which have been so unlawfully
advanced orient; one-fifth thereof to the use of
the informer, and the residue thereof to the use
of thft United States.
;
JVbfei of the bank, unless specially prohibited hy law, receivable inpayment of all dues to the United States.
Section 14. And be it further enacted, That,
the bills or notes ojf the said corporation, originally made payable, or which shall have become
payable on demand, shall be receivable in ali
payments to the United States, unless otherwise
directed by act of Congress.
The bank
to give the necessary facilities, without any
charge, for transferring the funds of the United Slates to
different quarters.
Section 15. And he it further enacted, That^
during the continuance of this act, and whenever
required by the Secretary of the Treasury, tho
said corporation shall give the necessary facilities for transferring the public funds from plac^
137
to place, within the
United States, or territories
and
same
thereof,
for distributing the
in
payment
of the public creflitors, without charging commissions or claiming allowance, on account of
dilFerence of exchange, and shall also do and
perform the several and respective duties of the
Commissioners of Loans for the several states,
or of any one or more of them, whenever required by law.
D'posiles of Ihe public moneys to be made in the bank or
Us branches, or the reasons to be laid before Congress by
the Secretary of the Treaswijfor its not being done.
Section 16. And be it further enacted, That
the deposites of the money of the United States,
in places in which tlie said bank and branches
thereof may be established, shall be made in the
said bank, or branches thereof, unless the Secretary ofthc Treasury shall, at any time, otherwise order and direct
*
the
;*
in
which case the Secre-
The depository of the public moneys was changed from
Bank of the United States on the 1st of October, 1833, in
coasequence of an order from the Secretary of the Treasury,
previously dictated to him, on the loth September, by the
President of the United States.
The reasons dictated by the President, to be assigned by the
Secretary, and which were declined by Air. Duane, then Secretary of the Treasury, (for wiiich he Avas removed from
but were, in a great measure, asoffice by the I'resident)
signed by his successor, Roger B. Taney, (who it was known
to the President would yield to his unwarranted dictation,)
;
were
:
That he had thought, as
was a dangerous institution.
First,
Second,
The motive
13*
early as 1829, that the
bank
of tho bank, in askhig for a re-charter
138
tary of the Treasury shall immediately lay before Congress, if in session, and, if net, im-
make it a leading political question in the
pendin;; presidential election, and as avoTved by some of the
bank advocates to biing the PresideiU to the test.
Third, That the bank, from Januarv, 1831, to !\rav,1832,
had extended its discounts from §4-2,40i,3U4 SI, to §T0,4-J8,O7O
in 1832, was, to
7:2.
Fourth, That the people, by re-clectiiig him, had decided
that the bank should not be re-chartcred.
Fil'lh, The President considers the question definitely settled, tiiat the bank will not be re-chartered.
Sixth, The responsihiHtjj bein^ tkroini vpon the execvtire
of decidiii'^ how long before the expiration of the charter, the
public interests u iil require tlte dtposites to be placed elsewhere, the President fixes upon the 1st day of the following
October as the proper time.
Seventh, That the bank Lad charged the government
$153,842 77 damages on a bill drawn by the L'nited States
upon the French government, which bill was not honourwl
by the French government.
"Eighth, 'I hat tlie most important business, even that of
granting discounts, is intrusted to five members, who do not
report to the board.
Ninth, That the government directors were not appointed
on the Exchange Committee.
Tenth, That the bank had expended during the years 1830,
'31, aud '32, under the direction of the president of the bank,
about $80,000 in rejiublishiug and distributing "an article
copied from the American Quarterly Review, containing favourable notices of the bank:" numerous Reports of the Committee on Fiiiance made in the Senate during the Session of
1330, of whi;h General Smith (a decided supporter of President Jackson) was chairman; a large number of Reports of
the Committee of Ways and Mesius, made in the House of
Representatives during the year 1^30, (a majority of this committee were pohtical friends of President Jackson, and they
are said to have been unanimous in tlieir report.) Besides
the expenses incurred in these publications, it is alleged by
the President, that the bank purchased and distributed "some
hundred thousand copies of newspapers, reports, and speeches
made in Congress, reviews of the veto message, and reviews
of speeches against the bank," &c. &c.
139
mediately after the commencement of the next
session, the reasons of such order or direction.
Accompanying the President's manifesto, was a "Report of
the g()verniiieut directors of the Bank of the United States to
the President," in relation to the expenditures by the bank
for printing', the substance of which are contained in the tenth
ciiarge.
report of December 3, 1833,
of the President, showing.
That the bank had, in no instance, violated its charter that
several charges, made by the President, were wholly unfounded that, in others, the motives of the bank had been
njisrepresentcd and that the President had assumed the
province both of accuser aud Judg-c. That every thing done
b V the bank, was warranted by its charter, and had, uioreover,
been done with reference to the pecuniary aid of the country.
That the bank must necessarily be the judge of its own
concerns, and that the President had no lawful right to interfere with thcni, except to sue out a scire facias for violating
its charter; but that " a judicial investigation of his charges
is precisely what he (the President) dreaded."
in answer to one of the charges made by the President,
t^iat " The fact that the bank controls, and in some cases substantially owns, and by its money supports some of the leading presses of the country, is now more clearly understood,"
the directors of the bank say, " This whole allegation is
denied."
" The bank does not twic control, and never did control any
press whatever the bank does not now support, nor did it
ever support, by its money, any press. Created for the purpose of giving aid to every branch of industry, it has not presumed to proscribe the conductors of the press, from their
share of the acconmiodation, due to their capital and industry.
Of the extent and security of those loans, the directors claim
the privilege of judging."
Speaking of the views and course of policy, ever pursued
by the bank, in relation to the politics of the countr}', the directors say that, " Since the establishment of the institution it
has devoted itself anxiously and exclusively to the purposes
of its creation, the restoration of the currency, the maintenance of the general credit, and the accommodation of the internal and foreign trade of llie country. That it has not failed
The directors of the bank, in a
made a reply to all the charges
—
—
—
—
—
—
—
140
Corporation prohibited from tuspcndini; payments in tpecie, by being made chargeable with the payment of interest at the rate 12 per centum per annum.
Section 17. And be it further enacted, That
the said corporation shall not at any time, sus-
—
in these objects
that it has indeed realized m&re than the
anticipations of the most sanguine, is attested by all parts of
the community. It was in the midst of this career of inofl'ensive usefulness, when, soon after the accession to power of
the present executive, the purpose was distinctly revealed,
that other duties than those to the country were required
and that it was necessary for the bank, in administering its
affairs, to consult the political views of those who had now
obtained the ascendency in the executive. It is understood,
tliat soon after that event, a meeting was held in Washington of the principal chiefs, to consider the means of perpetuating their new authority, and the possession of the bank
was among the most prominent objects of the parties assembled. The first open manifestation of this purpose was in
June, in 1829, when a concerted effort was made by tlie executive officers to interfere in the election of the board of directors at Portsmoutli. At tlie head of this attempt was Mr.
Levi Woodbury, now a member of the present cabinet 'at
Washington, who did not hesitate to avow, in a letter to tlie
Secretary of the Treasury, which, though marked "confidential," was subsequently ordered to be published by the Committee of Investigation, in 1832 tliat he wished' the interference of the government to remove tlie president of the
—
branch at Portsmouth; of whom he says
" The neir president, Jeremiah Ma^oa,isapaHicularfriend
of Mr. Webster, ami his pvUtical character is doubtless trell
known to you and he requested ihe Secretary of the Treasury to communicate tcith some of the directors of the mother
bank in favour of such a change.
" This letter of Mr. Woodbury was transmitted to the bank
by the Secretary of tlie Treasury, who stated that "from
some expressions in this letter, it may be inferred diat it is
partly founded on a supposed application of the influence of
the bank, widi a view to political effect," in consequence of
which he deemed it his duty to present it to tlie bank ^^ tcith
:
—
—
the rietcs of the administration in relation to it." At the
time, Mr. Isaac Hill, acting as the Comptroller of the
same
141
pend or refuse payment in gold and silver, of
any of its notes, bill, or obligations nor of any
;
Treasury, until rejected by the Senate, and now a Senator of
the United States, sent a memorial from the members of his
political party in the legislature of New-Hampshire, requesting the removal of 3Ir. Mason.
In another communication
presented to the bank, he gave it as his opinion, that no measure short of Mr. Mason's removal would tend " to recmicile
the people of New- Hampshire to the bank," and that " tlie
friends of General Jackson in New-Hampshire, have had but
too much reason to complain of the management of the branch
bank at Portsmouth." Finally, the Secretary at War ordered
the transfer of the pension fund from the branch bank at
Portsmouth to another bank in Concord; an act so obviously
in violation of the laws, that it was first resisted by the bank,
and then retracted by the Secretary.
"It became then manifest to the bank, that there was a combined effort to render the institution subservient to political
purposes; and that it was necessary to come to some immediate and distinct understanding of its rights and duties.
This
was done in the correspondence of the president of the bank
with the Secretary of the Treasury, of which the following
passages will indicate the general puri)ort.
"Presuming that we have rightly apprehended your views,
and fearful that the silence of the bank might be hereafter
misconstrued into an acquiescence in them, I deem it niy
duty to state to you, in a manner perfectly respectful to your
official and personal character, yet so clear as to leave no
possibility of misconception, that the board of directors of the
Bank of the United States, and the board of directors of the
branches of the Bank of the United States, acknowledge not
the slightest responsibilitij of any description irhalsoever to
the Secrcfarj/ of the Treasury ioiicliing the poliiira/ conduct
of their officers. That being a subject on vbich lliry never
consult, and never desire to know the views of any adniinistration."
Again : " Accordingly the act of Congress simply declares,
that for the management of the affairs of the said corporation,
there shall be twenty-five directors. When these are chosen,
the whole administration of the bank is committed to their exclusive care.
Their responsibility for the mnnagement of it
Congress, and to Congress alone; but no executive
of the government, from the President of the United
Stales downwards, has the slightest authority to interfere in
tt; atul there can be no moix warrant for suggesting Hie,
js to
officer
142
moneys received upon deposit in said bank, or in
any of its offices of discount and deposit. And
views of the administration to the BtinJ: of the United Slates,
than to the Supreme Court of the United States.
Finally "For the bank, which has specijie duties to perform, and which belong^s to the cotintri/, antl not to any parti/,
there is but one course of honour or of safety,
^^'heneter its
duties come in conflict with the spirit of parly, it should not
compromise with it, nor capitulate to it, hut resist it resist
it openly and fearlessly.
In this its interest concurs with its
duty, for it will be found at Ihst, such is the g'ood sense of the
Country, that the best mode of satisfying all parties is to disregard them all."
:
—
"
These extracts reveal the whole secret of the
hostility to
Bank of those, who, finding it impossible to bend it to
their purposes, have resolved to break it.
For this purpose,
all the poisoned weapons of political warfare have, for the
last four j-ears, been unsparingly and unceasingly emplovej
against the institution. Thus far their eflbrts have failed
they have been defeated before Congress, and discountenanced by the community. But now, being relieved from the presence of Congress, and die legal guardian of the public revenue being removed, they have ventured on tliis last act of
violence.
" To justify this measure is the purpose of the paper signed
the
Andrew Jackson.' Of the paper itself and of the individual who has signed it, the Committee find it difficult to speak
with the plainness by which alone such a document, from
Buch a source, should be described, without wounding their
own self-respect, and \iolating the consideration which all
American citizens must feel for the chief magistracy of their
own country."
'
2. The reply of the bank to this charge is, that the President had, for three years in succession, in his annual Message to Congress, invited the attention of that body, to a subject of a renewal of the Bank Charter. "It was," say the directors, " under these distinct and repeated invitations, by the
President himself, that the bank felt itself obliired not to decline his call upon Congress, and accordingly the subject
was brought before that body."
3.
The
following explanation
tion to this charge.
is
given by the bank in rela-
143
if the said corporation shall, at anytime, refuse
or neglect to pay on demand, any bill, note, or
1st, "The fact in regard to the increase of loans is misanil that the motives of them are wholly perverted.
stated
The truth is, that the loans at the period mentioned stood
—
thus:
January, 1831.
"
Loans to individuals,
Loan to Government,
Domestic Bills,
May, 1832.
$33,575,403 43
o,G74,C81 06
10,450,653 90
$47,375,078 20
$52,700,738 39
§70,428,050 72
52,706,738 39
23,05:>,972 52
$17,721,312 33
" Baring, Brothers &. Co.
$2,387,331 19
Cr.,
From
the hank
ment of
Dr.$l,878,122 29
manifest that hetween those two periods
had received from Government the reimburse$8,674,681 06
tins
it
is
" It had drawn for
funds,
And drawn on
its
its
correspondents
additional
Making a
total
sum
foreign
2,387,331 19
foreign
for
an
1,878,122 20
of
of
$4,265,453 48
furnishing additional means of
discounting to the amount of
Thus
Yet
$12,940,134 54
—
actual loans its actual discounts were increased only
its
$5,124,893 71
In answer to the fourth charge, the bank says, " Now it
impossible for any one to believe this, since it is notorious
that many of the most decided friends of the bank were his
(the I'rcaidcnl) zealous supporters. Thus Pennsylvania was
tho most cflicieut of them all ; yet that same Pennsylvania,
with extraordinary unanimity, iu February, 1831, passed the
following resolution :
4.
is
144
obligation, issued
by the corporation, according
to the contract, promise, or undertaking, therein
"That the Constitution of the United States authorizes, and
near half a century's experience sanctions, a Bank of the United Stales, as necessary and proper to regulate the value of
money, and prevent pajier currency of unequal and depreciated value."
Again, with equal unanimity, in February, 1832, the following
" That the Senators from this state in the Congress of the
I'nited States be instructed, and the Representatives requested to use their exertions to obtain a renewal of the Charter of
the Bank of the United States, during the present Session of
Congress, with such alterations, (if any be necessary) as may
secure the rights of the states."
:
5.
Notliing said.
The compiler
thinks that the President
assumes a heavy responsibility, in saying|uhat will hereafter
be done. He moreover thinks that the people's Representatives have the right of reconsidering the question, as to a
re-charter of the bank, should they think proper to do so.
Notliing in particular said. The compiler has attenexamined the Constitution of the United States, the
charter of the bank, and all the laws of the United States
in relation to " Executive Duties," and he cannot see from
what source the President derives the authority to exercise
euch powers or duties as are claimed in this instance.
6.
tively
7. The bank clearly show, that they were entitled to the
damages claimed and that the Government when a purchaser of foreign bills, had uniformly exacted damages on all
that were protested. They cite the case of a bill purchased by
Government of Stephen Girard exactly analogous to their
own. In the case referred to, the Government would not re-
—
linquish the usual damages.
o. In answer to this charge the bank says
" The Charter does not require seven directors to make
discounts.
"iVor do the ndea of the bank require seven directors.
" Nor is it true that any Committee of five has tlie power
to discount.
145
expressed
;
or shall neglect, or refuse to pay,
in said Bank,
on demand, any moneys received
"Nor does any Committee
discount without reporting to
the Board.
The business of the Board is, to prescribe how the deit may details of the operation of the Bank are to be, made
legate a portion of its power of making loans to Committees;
for in truth to require a Board of seven directors to meet before any bill could be discounted, would entirely destroy the
most useful operations of the Bank. And accordingly the
exchange Committee meet every day, for the purchase of
bills, and their purchases are submitted to the Board at their
"
—
—
next meeting."
9. In answer to this charge the Bank says,
"Now of these (five government) directors who could t nee
be appointed, there were but two residents of Philadelphia
the third not having yet been appointed. Why these two
directors, one of whom had just come for the first time into a
banking institution, were not named on the Committees in
place of old a nd valued directors, it would be more invidious
than difficult to decide but that there was no studied ex
elusion was obvious from the fact, that at the very next
quarterly appointment, two out of the three of the Government directors were placed on Committees."
The compiler considers this to be the most futile charge
imaginable. The President of the Bank exercises powers,
in tlie appointment of Committees, similar to those of the
Speaker of the House of Representatives. If the course pursued bv the President of the Bank be a sufficient cause of
;
—
bo asked, would ever be the presiding
Should the Speaker of the
officer of any deliberative body ?
House of Representatives, for instance, appoint Mr. A. on the
complaint, who, let
it
—
Committee of Ways and Means, one might say
that there
great injustice, Mr. A. ought to have been appointed on
the Committee of Manufacturers, of Commerce, or of Foreign
if appointed on either of these, one might say that
Afiairs
he ought to have been appointed a Member of the Committee
of Ways and Means, so that it would be impossible to silence
complaints of that nature, should any one feel disposed to
make them. It is well known that the presiding officer of
all deliberative bodies, uniformly exercihes his judgment in
the selection of persona to s ervo on Committee, a nd it i$
was
—
14
146
or in any of its offices aforesaid, on deposit,
to the person or persons entitled to receive
always understood that he generally chooses such as he
considers best qualitied to perform the requisite duties.
answer
10. In
to this charge, the
bank
" This too is another misstatement."
foUowmg expenditures, viz.
Printing and circulating
Reports to Congress-.
1830
1831
1832
1833
.
.
.
.
.
.
....
....
.
says,
They admit
the
Speeches in Congress
and miscellaneous
publications.
67
2,650 97
4,395 63
$2,901
19,057
22,183
2,600
§'5,086
$12,132 27
47
56
74
00
$-46,132 77
So that the general result is, that within four years
past the bank has been obliged to incur an expense of
$58,000 to defend itself against injurious misrepresentations.
" This has been done with regret that it should be neeesmry^ but with the strongest conviclion of its propriety,
and without the slightest wish either to disavow or to conOn the contrary, the bank asserts its clear right
ceal it.
to defend itself equally agaiubt those who circulate false
statements, and those who circulate false notes.
Its sole
It cannot sutFer itobject, in either case, is self-defence.
self to be calunmiated down, and the intere.sts confided to
A
care sacrificed hy falsehoods.
war of unexampled
violence has been waged against the bank.
The institulis assailants are what are called
tion defends itself,
poli'aciuns ; and when statements, wliich they cannot
answer, are presented to the country, they reproach the
bank uith interfering in politics. As tliese assaults, too,
are made at a period of public elections, the answers of
the bank must of course follow at the same time
and thus,
its
—
147
the same, then, and in every such case, the
holder of any such note, bill, or obligation, or
because those politicians assail the bank on the eve of
elections, unless the institution stands mufe^ it is charged
villi intfrftrins in politics, and influencing elections,
Tlie bank has never interfered in the slightest degree in
politics, and never influenced or sought to influence elections
hi't it will not be deterred by the menaces or clamours
of politicians, from executing its duty in dffending itself.
Of the time, and manner, and degree, and expense, connected with this service, the board of directors iaitn to
be the sole and exclusive judges. Whether the defence
is too costly, is for the stockholders whose interests are
sustained by it to decide; but certainly the assailants
themselves have no right to complain of the expenses
they have occasioned. Their own duty in the full proportion which may be npeded for defending iho institution intrusted to them, the board of directors will cheerfully and Zealously perform."
;
<
The shock produced to the trading portion of the
United States, the want of confidence that pervaded every
class of community, and the general embarrassment experienced in every kind ot business throughout the whole
community, in consequence of the removal of the deposits, are facts, too familiar with every one, to need
particularizing.
But these disasters are but of minor
consideration to the people, when compared with the
palpable usurpation of power by the Executive, and by
the Secrctiry of the Treasury, and with wlial may be
its future results, upon the civil liberties of the country,
if sanctioned by the people.
Ill the first place, the word " deposits," in the section
under consideration, clearly has reference, not to moneys
already in the hank, but to moneys to he put into the hank
this wis the construction given by Mr. CalJioun and
other eminent statesmen, and it was never controverted
it is believed, by any one, either in or out of Congress.
—
148
the person or persons entitled to demand and re.
ceive such moneys ae aforesaid, shall, respec-
It was clearly the intention of the framers of the charter,
that nrioneys, once deposited in the bank, should never
be withdrawn, except in the direct payment of claims
upon the government ; still, several drafts, amounting to
more than a million and a half of dollars, were given by
the Secretary of the Treasury, not in payment to public
rlaimanls, but to Slate deposit banks : here was clearly
an assumption of power, on the part of the Secretary of
the Treasury, not warranted by the bank charier, nor by
any other act of Congress.
Were this the only unlawful exercise of power, connected with the *' removal of the deposits," (as the act
was generally termed) there might be less cause of animadversion than exists in consequence of the whole
transaction.
The source from which the order emanated, to change the depository of the public moneys, is
pregnant with more serious consequences to the rights
and liberties of the people, than any thing else in relation to the subject.
By reference to the 16th section, it
will be clearly perceived, that Congress, in framing that
section, contemplated, not the performance of any specific
duty, but an exigency, that might arise, requiring the
exercise of discretionary authority.
This discretionary
authority was unqualifiedly vested by law in the Secretary of the Treasury ; for which he is accountable to
Congress and to that body only. Should the Secretary
•wilfully abuse the trust reposed in him. Congress would
have the riglit. and it would be their solemn duty, to impeach him. But it appears from the history of this transaction, that although Congress has expressly conferred
this discretionary pouer upon the Secretary of the TreaBury, and that although the Secretary of the Treasury,
after bestowing all the reflection upon the subject required by its magnitude, comes to the conclusion that
the public good did not require a change of the depository, slill the President decides, in the first place, that
—
149
be entitled to receive and recover interest
on the said bills, notes, obligations, or moneys,
lively
not reposed in the Secretary of
Treasury, but in /(im, the Executive: and in the second
place, that the depository sliall he chang'ed
" He takes
Ihe responsibihty." By reference to the 23d sect, it will
be perceived, that a discretionary authority is conferred
upon the President, lo "order a scire facias to be sued
out of the Circuit Coiirtof the District of Pennsylvania.''
If, then. Congress had intended that the President should
exercise the same discretionary power conferred by the
16th section, as is expressly given him by the 23d section,
would they not, in framing the law, have inserted the
word " President" instead of the words " Secretary of
the Treasury.'" Unless words have lost their meaning,
the Secretary of the Treasury has as great authority to
eicerciso the trust reposed in the President by the 23d
section, as the President has to exercise flie trust reposed in the secretary by llie 16lh section. But the only
rational conclusion at which we can arrive, is, that each
has duties prescribed by law, and each, for the sake of
preservinor that almost inimitable harmon)', planned by
the skilful architects that framed our excellent constituthis discretionary trust is
—
must move in his own orbit. A
upon the structure of onr governmeni,
tion,
little
reflection
will satisfy
any
belioved, with ihe correctness of this position.
By the 2d section of the 2d article of the Constitution,
it is declared, that " the President shall be commander
in chief of the army and navy of the United States,
one,
it is
when called into the actual service of the United States."
By the same section, il is declared, that " he (the President) sliall have power by and with the advice and consent of the Senate, to make treaties."
For the purpose of carrying into effect these provisions
of the Constitution, Congress, on the 2"tli of July, 1789,
passed an act "for establishing an earec?/hwe department,
lo be denominated the department of Foreign Affairs"'
(" Department of State," since substituted for Foreign
14*
150
until ti;e
same
shall be fully paid
at the rate of t.nelve per
and
satisfied,
centum per annum,
among other duties, requirep, that the
Secretary "shall perform and execute such duties as
shall, from time to time, be injoined on or entrusted to
him by the President of the United Slates, agreeable to
the Constitution, to or with public ministers or consuls
from the United States, or to negotiations with public
Affairs), which,
ministers from foreign states or princes, or to memorials
or other applications from foreign public ministers or
other foreigners, or to such other matters respecting
foreign affairs as the President of the L'niltd Slates shall
assii^n said department, i;c."
On the 7lh of August, 1789, an act was passed " to
establish an executive dtparlment to be denoniifiated the
Department of War;" and on the 30th of April, 1798,
an act was passed '' to establish an executive department
to be denominated the department of the Navy."'
The provisions of Loth these acts require the Secretary
of each department, like that of the Department of State,
/o execute such orders as he shall receive from the President
of the United Stales.
It is perfectly clear, from the provision contained in
the Constitution, and from the aforementioned acts of
Congress, that in certain cases, they require the Secretary not to execute ani/ specific duties prescribed by law,
but to aid and assist the President, as occasion may require, in such transactions, as, by the Constitution, are
intrusted to his discretion.
That being the case, the Secretary does not act upon his oivn responsibility, but upon
the responsibility of the President, for which the President is accountable to his country. The President being
commander in chief of the army and navy, is also accountable to his country for their operations, and of
course the right to control the Secretary of each department, in such transactions as are intrusted to his discretion.
The
principles in our Constitution, in relation to ex-
151
from the lime of such demand, as aforesaid
Provided, That Congress may, at any time here-
ecutive duties are similar to those contained in the EngConstitution, under which the kin^ possiessea the
prerogative of making treaties. He is als'i ;ominander
in chief of the army and navy, but not of the treasury.
The king can declare war, but he must depend upon
pailiament for supphes to carry it on. Were it not for
and the
this provision, he could render himself despotic
English nation, whilst they have apparently clothed the
king with great power, have wisely reserved to the people the exclusive control of the most formidable power
ihe purse of the nation.
The same in the United States
the President, as already shown, is authorized to make
treaties
he is also commander in chief of the army and
navy, but has no control over the treasury. The titles
of the acts of Congress establishing the departments of
state, war, and navy, make them " executive departments," whilst the title of the act in relation to the
treasury does not make it an " e.'cecutive department,"
it being entitled " an act to establish the Treasury De-
lish
;
:
;
partment."
The duties of the Secretary of State, War, and Navy,
are to be performed " under the direction of thz President
of the United States,''' whereas, in the act " to establish
the Treasury Department (see act of September 2d,
1789, oh. )2), no such phrase as " under the direction of
the President of the United States,'" nor any thing tantamount thereto, either expressed or implied, is to be found
in the whole act.
The following are the first and second
sections of the act referred to.
1. " i?e it enacted. Sec. That there shall be a Depart,
ment of Treasury, in which shall be the following officers,
namely a Secretary of the Treasury, to be deemed head
;
of the department; a comptroller, an auditor, a treasurer, a register, and an assistant to the Secretary of the
152
enact laws enforcing, regulating the re
covery of the amount of the notes, bills, obligaafter,
Treasury, which assistant shall be appointed by the said
secretary.
2. '• That it shall be the duty of the Secretary of the
Treasury to digest and prepare plans for the improvement and management of the revenue, and for the support of public credit; to prepare and report estimates of
the public revenue, and the public expenditures to super,
intend the collection of the revenue; In decide on the
form of keeping and staling accounts and making returns,
and to grant, under the limitations herein established, or
/o be hereafter provided, all varranlsfor moneys to be issued
from the treasury, in pursuance of appropriations by law;
;
execute such services relative to the sale of the lands heto the United States, as may be by law required of
him ; to make report, and give information, to either
to
longing
the legislature, in person or in writing, (as he
be required) respecting all matters referred to him by
the Senate or House of Representatives, or which shall appertain to his o/ftce ; and generally, to perform all suck
services, relative to the finances, as he shall be directed to
branch of
may
perform.''^
Affain : the Secretary of the War Department, and
the Secretary of the Navy, make their annual Report to
the President of the United Slates: but the Secretary of
the Treasury is required by law, to make his annual Report to Congress, as will be perceived by the following
act of Congress, entitled " An act supplementary to the
act entitled ' An act to establish the Treasury Department,' " passed May 10, 1800, eh. 58.
" Be it enacted, kc. That it shall be the duty of the
Secretary of the Treasury to digest, prepare, and lay before Congress, at the cominenceinent of every session of
Congress, a report on the subject of finance, containing estimates of the public revenue, and public expenditures, and plans for improving or increasing the re-
153
lions or other debts, of which payments shall ha«ve
been refused as aforesaid, with the rate of
in-
venues from time to time, for the purpose of giving information to Congress adopting modes of raising the money requisite to meet
the public
Pursuing the inquiry
expenditures.''''
farther, it will be perceived,
that the comptroller, auditor, treasurer, and register are
subordinate to the Secretary of the Treasury. The
Commissioner of the General Land Olfice, also, as will
appear from part of the first section of the act of April
25, 1812, ch. 68, is required to perform his duties, " under
the direction of the Secretary of the Treasury."
The act alluded to is in these words
still
" Be it enacted, kr. That there shall be established in
the Department of the Treasury an office, to be denomthe chief officer of
inated the General Land Office
which shall be called the Commissioner of the General
;
Land
Office, whose duty it shall be, under the direction
of the head of the department, Sec.
From
appears, that the Comraissioner of
stands in the same relation to
the Secretary of the TVea^urv, that the Secretary of Slate,
War, or of the J^avy does to the President. Congress,
in framing particular laws, have, without doubt, taken
into consideration the most competent head, to whom
their supervision with the greatest advantage to the public, may be intrusted
and in all cases, when any national
object is to be carried into effect, and where the act of
Congress for that purpose, expressly directs that it be
" und(r the direction of the President of the United Slates,'''
there can be no doubt but that the executive has the
right to give any officer intrusted by law with its execation, such lawful orders and directions, as he may
think proper. And it is equally clear, that where such
authority is not given the President, he has no more right
or authority to control an officer of government intrusted
tlie
this act
General Land
it
Office,
;
154
terest
above mentioned, vesting jurisdiction
any courts, either of law
that purpose in
for
oi
with the performance of specific duties prescribed by
law, than such officer has to order, control, or direct the
President in such duties as are assigned to him by law.
This, however, is a point, not applicable to the question
under consideration. In this case, no specific duties are
assigned to the Secretary of the Treasury he is clothed
with discretionary authority and it is impossible, from
the very nature of the case, and from the act of Congress
itself, without first divesting him of this discretionary
authority, that it can be lawfully exercised by any one
else; and should the people sanction the act of the President, they in effect ratify the usurpation of power, and
voluntarily surrender their rights and liberties to the
funeral pile. The consequences of one instance of usurpation are not confined to that act alone
it not only
paves the way for further usurpation, but affords a precedent, which will often carry with it, the force of a settled
principle ; and there is reason to fear, tliat if the people
suffer an encroachment to be made, first, upon one part
of the Constitution, and afterwards upon another, that
its vital principles, if not its form, will become totally
subverted.
Carrying into operation the pretensions of
the executive as already avowed, that all civil officers
appointed by the government, are to exercise the trust
reposed in them, as Ae shall direct that he has the control of all the government property, whether it be in
munitions of war, or bank bills that he is to be the sole
judge of the actions and sentiments of all civil officers,
and is to decide whether they be such as will warrant
their continuance in, or dismissal from office; carrying
these once into effect, and what, let it be asked, is wanting, to constitute the most refined despotism?
ma.y call
it repuljlicanism
but in reality, it is republican despotism.
To the people, I, as one of their number, submit the
question of tiie late daring usurpation of power, and
must abide their decision.
—
—
—
—
—
—
We
155
equity, of the
courts of the United States, or
territories thereof, or of the several States, as
they
deem
expedient.
Ptnalliesfor forging, counterfeiting.
if
Section 18. And he it further
any person shall falsely make,
Sec,
enacted,
That,
forge, or coun-
or cause or procure to be falsely made,
forged, or counterfeited, or willingly aid or
terfeit,
making, forging, or counterfeitor note in imitation of, or purport
ing to be, a bill or note issued by order of the
president, directors, and company of the said
assist in falsely
ing,
any
bill
bank, or any order, or check, on the said bank
or corporation, or any cashier thereof, or shall
falsely alter, or cause or procure to be falsely
altered, or willingly aid or assist in falsely
altering, any bill or note, issued by order of the
president, directors, and company of the said
bank, or any order or check on the said bank
or corporation, or any cashier thereof; or shall
pass, utter, or publish, or attempt to pass,
utter, or publish, as true, any false, forged, or
counterfeit bill or note, purporting to be a bill
or note issued by order of the president, directors, and company of the said bank, or any
false, forged, or counterfeit order or check upon
the said bank or corporation, or any cashier
thereof, knowing the same to be falsely forged,
or counterfeited ; or shall pass, utter, or publish,
or attempt lo pass, utter, or publish, as true,
any falsely altered bill or note, issued by order
of the president, directors, and company of the
156
any falsely uttered order or check
on the said bank or corporation, or any cashier
said bank, or
thereof, knowing the same to be falsely altered,
with intention to defraud the said corporation,
or any other body politic, or person
or shall
sell, utter, or deliver, or cause to be sold, uttered, or delivered, any forged or counterfeit note,
or bill in imitation, or purporting to be, a bill
or note issued by order of the president and directors of the said bank, knowing the same to
be false, forged, or counterfeited every such
person shall be deemed and adjudged guilty of
felony, and being thereof convicted by due
course of law, shall be sentenced to be imprisoned, and kept to hard labour for not less than
three years, nor more than ten years, or shall
be imprisoned for a term not exceeding ten years,
and fined not exceeding five thousand dollars
Provided, That nothing herein contained shall
be construed to deprive the Courts of the individual States of jurisdiction, under the laws of the
several States, over any ofience declared punishable by this act.
;
;
:
Penalties for engraving, after the similitude^ of the plates
used for the bank, any plates, kc.
if
Section 19. And be it further enacted, That,
any person shall make or engrave, or cause
or procure to be made or engraved, or shall
have in his custody or possession, any metallic
plate, engraved alter the similitude of any
plate from which any notes or bills, issued by
the said corporation, shall have been printed,
157
•with intent
suffer the
terfeiting
to
use such plate, or to cause or
same to be used in forging or counany of the notes or bills issued by the
or shall have in his custody
;
or possession, any blank note or notes, bill or
bills
engraved and printed after the similitude of any notes or bills issued by said corporation, with intent to use such blanks, or cause
or suffer the same to be used in forging or counterfeiting any of the notes or bills issued by the
said corporation
or shall have in his custody
or possession, any paper adapted to the making
of bank notes or bills, and similar to the paper
upon which any notes or bills of the said corporation shall have been issued, with the intent to
use such paper, or cause or suffer the same to
be used in forging or counterfeiting any of the
notes or bills issued by the said corporation,
every such person, being thereof convicted, by
due course of law, shall be sentenced to be imprisoned, and kept to hard labour, for a term
or shall be imprisonnot exceeding five years
ed for a term not exceeding five years, and
fined in a sum not exceeding one thousand dolsaid corporation
;
;
;
lars.
Bonus to
be paid lo the United Slates for this charter.
Section 20. And
be
it
further enacted, That,
in consideration of the exclusive privileges
and
benefits conferred by this act, upon the said
bank, the president, directors, and company
thereo.",
shall
pay
to the
United States out of
sum of one
the corporate funds thereof, the
]5
158
million and five hundred thousand dollars, in three
equal payments, that is to say, five hundred
thousand dollars at the expiration of two years ;
five hundred thousand dollars at the expiration
and five hundred thousand dolof three years
lars at the expiration of four years, after the
said bank shall be organized, and commence its
operations, in the manner herein before pro;
vided.
Congress
to establish
no other banks except in the District
of Columbia,
&:c.
Section 21. And be it further enacted, That,
no other bank shall be established by any future
law of the United States, during the continuance
of the corporation hereby created, for which
the faith of the United States is hereby pledged
Provided, Congress may renew existing charters for banks in the District of Columbia, not
increasing the capital thereof, and may also
establish any other bank or banks in said District, with capitals not exceeding, in the whole,
six millions of dollars, if they shall deem it expeAnd notwithstanding the expiration of
dient.
the term for which the said corporation is created, it shall be lawful to use the corporate name,
style, and capacity, for the purpose of suits for
the final settlement and liquidation of the affairs
and accounts cff the corporation, and for the
sale and disposition of their estate, real, personbut not for any other purpose,
al, and mixed
or in any other i;nanner whatsoever, nor for a
period exceeding two years after the expiration
of the said term of incorporation.
:
;
159
Limitation of time prescribed for this bank's going into
operation.
Section 22. And be it further enacted, That,
subscriptions and payments to said bank
shall not be made and completed so as to
enable the same to commence its operations, or
it" the
said bank shall not commence its operaif the
on or before the first Monday in April
next, then, and in that case, Congress may, at
any time within twelve months thereafter, declare by law, this act null and void.
tions
Committee of either House of Congress may inspect the
books. Sic. of the bank.
Section 23. And
be
it
further enacted, That
be lawful for a committee
of either House of Congress appointed for that
purpose, to inspect the books, and to examine
into the proceedings of the corporation hereby
created, and to report whether the provisions of
this charter have been by the same violated or
not ;* and whenever any committee, as aforesaid,
it
shall at all times
* Three different committees have been appointed by
Congress, since the incorporation of the bank, at three
different periods; one 1819, one in 1032, and one in
1834. The proceedings of the first were publislied,
during the year 1019, but they are not considered to be
of suineient interest, to give an abstract of them. A
short outline of the proceedings of the committee of '3'2,
is given in page 97, 9P>.
The committee of 1834, was
appointed May 22, pursuant to the following resolution,
viz.
160
and report, or the President of the
United States shall have reason to believe, that
shall find
" Resolved, Tha.'. for the purpose of ascertaining', as far
as practicable, the cause of the commercial embarrassment and distress complained of by numerous citizens
of the United States, in sundry memorials, which have
been presented to Congress at the present session, and of
inquiry whether the charter of the Bank of the United
States has been violated
and also what corruptions
and abuses have existed in its management ; whether
it has used its corporate power, or money, to control the
;
press, to interfere in politics, or influence elections
;
and
has had any agency, through its management or money, in producing the existing pressure, a
select committee be appointed to inspect the books, and
examine into the proceedings of the said bank, who
shall report whether the provisions of the charter have
been violated or not and, also, what abuses, corruptions
or malpractices, have existed in the management of said
bank; and that the said committee be authorized to
send for persons and papers, and to summon and examine witnesses on oath, and to examine into the affairs
of the said bank and branches; and they are further
authorized to visit the principal bank, or any of its
branches, for the purpose of inspecting the books, correspondence, accounts, and other papers connected with
whether
it
;
management, or business ; and that the said committee be required to report the result of such investigation, together with the evidence they may take, at as
its
early a day as practicable."
The committee appointed pursuant to the foregoing
resolution, consisted of Messrs. Thomas, Jones, Muhlenberg, Mann, Lytle, Ellsworth, and Everett (Mass.),
who proceeded immediately
to the duties assigned them.
to Philadelphia, to attend
In consequence of a dis-
agreement between the directors of the bank, and a mano investigation into the affairs
jority of the committee,
161
the charter has
for
Congress
been
violated,
to direct, or the
it
may be
lawful
President to order
of the b^nk took place. Two reports were made to
Congress one by tiie majority of the committee, condeniiiiiig the conduct of the president and directors of
the bank, accompanied with a resolution, requiring the
president and directors to be brought before the bar of
the House of Representatives, " to answer for their
contempt of its lawful autherity." The other, by the
minority (Messrs. Everett and Ellsworth), who fully
justified the course pursued by the bank, and gave as
ibeir opinion, thai il had iieen guilty of no contempt.
" The report of the minority,'' vvas pronounced by a
number of our most candid and talented journals, to be
one of the a"blest productions, ever presented to the
House of Representatives. Considering the great length
of the two reports, together with the voluminous correspondence between the committee and the ollicers, and
directors of the bank, the limits of this work will admit
of only a few of the leading subjects of disagreement.
First, It appears that a majority of the committee
made a requisition upon tho bank, for certain books
and papers, " without the presence of any person not
required or invited to attend." The bank declined a
compliance with this requisition, unless the books were
furnished and examined in tho presence of some one belonging to the bank.
A majority of the committee
considered this refusal a contempt of the lawful authority of the House of Representatives.
Second, The bank was required to send certain
books to the JJorlh American Hotel.
Tiie bank answered, " That they cannot comply with
that part of the resolution of the Committee of Investigation, which requires that certain books of the bank be
sent to the North American Hotel, this day, at eleven
;
—
—
o'clock."
A
majority of the committee consider this refusal of
15*
1G2
a scire facias to be sued out of the Circuit Court
of the District of Pennsylvania, in tlie name of
the bank a violation of the charter, and a contempt of
the laws and authority of the House of Representatives,
Third, On the 5th of May, a majority of the committee advised the president and cashier that they would
on that day, at one o'clock, repair to the bank for the
purpose of making a demand of certain books and
papers.
The president immediately answered the committee,
that the books referred to, were in the hands of a committee of the board, ihat the committee had adjourned,
and could not be re-assembled at the appointed hour on
so short a notice, but that they should be assembled
without unnecessary delay.
majority of the committee consider this " a violation of the charter, and a contempt of the authority
of the House."
Fourth, On the 7th of May, the committee repaired
to the bank, pursuant to an arrangement made by the
bank for their reception, and then and there demanded
certain books and papers.
The bank replies that the resolution of the House appears to bo so general as to warrant " a general and indiscriminate search," and suggest, that " the committee
specify the books wanted, and for what purpose, and
finally, that the committee have no right to require, and
the bank is not bound to exhibit, 'any papers except
such as go to prove a violation of its charter."
A majority of the committee consider this "a violation of the charter, and a contempt of the authority of
the House."
Fifth, A majority of the committee furnish the bank
a long list of requisitions, demanding copies of certain
books, papers, iic.
The bank furnished some, and then informed the committee that it would require two clerks ten months to
A
163
the United States (which shall be executed
upon the president of the corporation for the
copy all the other papers embraced in their resolution
moreover, that the resolution included some papers over
which the bank had no control.
A majority of the committee say, that " these pretences, and this bold disregard of its (the bank's) charter, are, in themselves, derogatory to the dignity, and
contemptuous to the authority of the House, to witich in
pari it owes its being, "
:
Sixth, On the 9th of May, a majority of the com.
mittee furnished the Marshal of tiie ea.slcrn district of
Pennsylvania, a subpoena, directing him to summon
Nicholas Biddle, and thirteen other persons, directors of
the bank, to attend at their committee room, on the next
day, at noon, to testify to certain matters and things,
and to bring with them "certain boolis therein named
for inspection."
Nicholas Biddle, and the thirteen directors appeared
at the time and place mentioaad, but respectfully declined bringing the books called for ; one of the reasons
offered was, that they had no authority to do so.
majority of the committee do not say that, in this
particular case, the bank have violated their charter.
A
brief outline of some of the demands
by a majority of the committee, with their views
upon the subject, we now proceed to give a short abstract of the views of the minority.
Having given a
made
1st, The minority consider the requisition of the majority
as claiming an exclusive control of the books of the
bank, highly objectionable, partaking of the nature of a
" general search" for facts on which to predicate charges
against the bank. They further say that," It appeared
at a very early stage of the proceedings, in a conference
between the two committees, that the committee of the
directors proposed to exhibit their books in person to the
committee of investigation, expressing at the
same
164
time being, at least fifteen days before the commencement of the term of said Court), calling on
time, their expectation and readiness to withdraw from
the room, whenever the committee of the House should
see fit, in order to furnish the committee of the House
the opportunity to deliberate, without the presence of
any one not required or invited by themselves, to attend.
This proposition was not acceded to by a majority of
the committee of the House of Representatives.
Second, Requiring the bank to send thei(; books to
the North American Hotel.
The minority consider tliis
liable to the same objection as mentioned in relation to
the first. " If valid, in reference to the books named in
the requisition, it was of course valid as to all the books
of the bank and its branches, which, by parity of right,
the committee may have required to be brouglit to their
lodgings, (and why not at any place in the union ?) and
there detained and used at tlieir pleasure. It was to
take them away from the place where the important
interests of the bank require them to be, and to be used."
It would expose them to risks, and it was not to be supposed that books, containing the evidence of pecuniary
transactions to the amount of several hundred millions
of dollars should be thus exposed.
Third, As to making a personal demand of the books,
&-C. This proceeding, says the minority, is but a repetition of previous demands.
Fourth, Similar to the above.
Fifth, This the committee consider in the nature of
a general search.
Sixth, The minority entertained great doubt of the
legality of this process, and give as their opinion, that
the bank had committed no contempt of the authority
of the House.
The majority of the committee of the House, conclude the'T report with the following resolution,
Resolved,
That
the speaker of this
House do
issue his
165
the said corporation to show cause wherefore
the charter hereby granted shall not be declared
to arrest Nicholas
Biddle, President, Manuel Eyre, Lawrence Lewis, Ambrose White, Daniel W. Cox, John Holmes, Charles
warrant to the sergeant-at-arms,
Neff, William Plait,
Fisher, John S. Henry, and
John Sergeant, directors of the Bank of the United
States, and bring them to the bar of this House, to answer for their contempt of its lawful authority."
Chauncey, John Goddard, John R.
Matthew Newkirk, James C.
A
few days after the introduction of the above reso-
another resolution was introduced, fixing the
lOlh day of July for adjournment. Mr. John Quincy
Adams sarcastically suggested, that the House ought to
fix upon a more distant day, that they might have time
to bring up Nicholas Biddle, and others, and punish
them for " a contempt of the House." Had a bomb-shell
been thrown upon the floor of Congress, it would not
have produced a greater fluttering among some members
than did this short expression of Mr. A. The terras,
" bank aristocracy," " moneyed monopoly," " Journals
under bank influence," " corruption of the bank," " con
tempt of the House," and every denunciation was fulminated, with all the fury that could be prompted by
blind revenge and despair.
The conduct of some members varied in no respect
from that of the French Jacobins in the national convention, under Robespierre, only that the latter sometimes had the moral courage, under an able leader, to
carry their threats into execution, while the former
shrunk from their proposed punishment without making
a single effort to carry it into efiect.
The compiler will not say, whether, in his opinion,
He will not
the bank has violated its charter or not.
isay, whether Nicholas Biddle and others have been
^r have not been guilty of a contempt of the authority
of the House of Representatives but lie will saijy and
lution,
166
forfeited ; and it shall be lawful for the said
Court, upon the return of the said scire facias,
he feels himself fully ivarranted in the assertion, that if
Nicholas Biddle and others, have been jjuiity of a contempt of the authority of the House of Representatives,
then is a majority of that house contemptible, and deserve
to be treated with contempt,
they have betrayed tlie
trust reposed in them
tiiey have degraded themselves
—
—
and the American people, and basely yielded the rights
of the people to a moneyed corporation. Talk of the
" bribery of the bank .'" If circumstantial evidence be
entitled to any weight; the fair presumption is, that
those members of Congress, (if any) who are the
loudest in the denunciations of the bank, are the ones
that have received the gold of the bank, and follow the
example of the adroit burglar, who, after having
committed a felony, will run and hallo Stop thief
stop thief! The same may apply to those editors of
papers and bar-room politicians, whose principal song
is
Bank Bank
Bank
I was a few days since
reading a speech of the New-York commercial representative, delivered at Tammany Hall, in which the
crimes, the enormities, and the misdeameanours of the
bank seemed to be the principal theme of his remarks.
The thought struck me, that I should like to ask him
the simple question, why he, as a member of Congress,
did not urge the punishment of Mr. Biddle and others.
As I have not the honour of a personal acquaintanee
with the honourable member, he will excuse me for
asking him the question, through the medium of this
—
—
1
1
I
!
work.
is painful to my feelings, as an American citizen
loves his country, to speak of members of Congress,
any manner other than with respect, or to entertain
any feelings towards them other than those of profound
regard the nature and duties of the office are such as
ought to secure them that treatment, and those
but if men will not respecl
feelings from every one
It
who
in
—
:
167
to
examine into the truth of the alleged violaand if such violation be made to appear,
tion,
themselves, they
have no reason
to look for respect
from
others.
What should we say or think of a judge on the
bench, who after liaving avowed that tlie court had
been in seven or eight instances, treated vvith contempt,
should make out a commitment to be dehvered to an
officer, and tlicn, without the least apology or retraction from the person committing the contempt, suppress
the commitment, and pocket the contempt besides?
Would not every one say, that there was something
morally corrupt or wrong in such a judge ? Would not
every one say, and that very justly, that the people
were insulted? that justice itself was insulted? and
that such a judcre disgraced the sacred ermine, and
owed it to himself and the people whose minister he
might be, to resign the situation which he unworthily
—
?
Every honest man must answer in the affirmative.
Contemptible cowards or unprincipled wretches might
say that such persons were unworthy their notice; that
is generally the subterfuge of meanness.
I once knew
a pretendedly great bully that was ever fighting great
battles with persons, and with one man in particular not
present, till at last his ears were cuffed, and nose wrung
by this very man, who was no professed fighter " Ah !"
said the bully, " I did not consider him worthy of notice."
Before bringing this subject to a close, the compiler
will relate a conversation that took place between himself and some warm friends of the administration, on
the receipt of the resolution under consideration from
Washington. The reader will excuse the apparent ab-
held
—
ruptness of the compiler in the conversation alluded to
on being informed that he and the persoriK alluded to,
were great personal t'riends and frequently indulged
tliomselves in severe jokes at each others' expense.
Meeting my friends, they accosted nie thus, " Now,
what do you think of Biddlc." " Think," said I, " about
;
—
168
then to pronounce and adjudge that the said
charter is forfeited and annulled :* Provided,
—
Biddle, what of him." " What of him, is not Congress
going to bring him up, and punish him for contempt?"
" I am not aware of that fact," said I. " Just look into
the Globe, and see the resolution of the Committee of
Investigation." " I have seen it," said I. "Well, what
do you'think of it?"—" Think,'" said I, " I will tell you
what I think, if you will promise not be offended."
*' Well, say on."
" Why, sir, I think it was introduced
to make fools ::" you and others
the majority in Congress never in
;.l to act upon it; the subject will sleep
where it is, cuu what has been done is the last we shall
ever hear of it in any thing like a legislative or judicial
form. When Nicholas Biddle is brought before Congress
for contempt," said I, "you will be speaker of the house
and I president of the bank." " But do you say that
Congress will never act upon the subject, and never
punish Biddle," "JVcrer.'" " Then I will never vote
another Jackson ticket." " Don't make too rash and
—
—
—
—
—
:
—
—
—
—
inconsiderate a promise, my dear friend," said I, " for
if you intend to adhere to your promise, I assure you
that you will be found among the Whigs." " Then let
me be found there.'' Speaking with my friend a few
days since, he said, " he sliould stick to his promise.''
'*
President Jackson, in his manifesto to the cabinet,
Sept. 18, 1833, speaking of the arrangement made by
the bank as to certain three per cent, stocks, says,
" The agent made an arrangement on terms, in part which
were in direct violation of the charter of the bank."
Again The President, in the same manifesto, speaking of the Exchange Committee discounting notes, says,
that the bank has acted " in direct violation of one of
the most important provisions of the charter."
And in another part of his manifesto, the President in
speaking of the abuses and corruptions of the bank,
says,
" With these facts before him, in an official report from the government directors, the President
—
:
—
—
—
169
however, Every issue of fact which may be joined between the United States and the corporaAnd it
tion aforesaid, shall be tried by jury.
shall be lawful for the court aforesaid to require
the production of such of the books of the
corporation as it may deem necessary for the
ascertainment of the controverted facts; and
vould feel that he was not only responsible for all the
abuses and curruptions the bank has committed, or may
commit, but almost an accomplice in a conspiracy
against that government which he has sworn honestly
to administer, if he did not lake every step within his
constitutional and legal power likely to be efficient in
putting an end to these enormities."
It seems that in a case where the President has assumed to himself the offices of accuser, judge, and I
may add executioner, he is wonderfully punctilious in
the performance of what he considers to be his duty.
Admiltmg for the sake of argument (and upon no other
principle is it admitted), that the President had a lawful
right to order the depository of the public moneys to be
changed, it must be admitted by every one, that his
duty to order a scire facias to be sued out, "for a violation of the bank charter," is not less binding, than that
of ordering a change in the depository of the public
funds.
\Vhy then has he not done it ? was it, as was
alleged by tlie bank, because " a judicial investigation
of his charges is precisely what he dreads.'"' or was
it for some cause not proper to be mentioned
In the absence of any explanation, we must take the
creed of President Jackson and by that creed it is clear,
that President Jackson, in not ordering a scire facias to
be sued out against the bank " is not only responsible
for all the abuses and corruptions the bank has committed, or may commit, but alniobt an ucLomplice in a con.,
spiracy against that government which he has sworn
.''
;
Jioncstly to administer."
KJ
170
the final judgement of the court aforesaid shall
be examinable in the Supreme Court of the
United States by writ of error, and may be
there reversed or affirmed, according to the
usages of law.
Approved, April, 10, 1816.
The
following are the
passage of the
Yeas and Nays on the
bill.
House of Repeese>'tatives.
In the
—
Yeas Messrs. Adgate, N. Y. Alexander, Oh.
Baer, Md.
Atherton, N. H.
Betts, N. Y.
Bradbury, Ms. Brown, Ms. Cal
Boss, R. I.
houn,S. C. Cannon, Tenn. Champion, Con.
Clark, N. C.
Chappell, S. C.
Clark, Ken.
Comstock, N. J.
Cleodenin, Oh.
Con
Conner, Mass.
Creighton, Ohio
diet, N. J.
Cuthbert, Geo.
Crocheron, N. Y.
Edwards
N. C. Forney, N. C. ; Forsyth, Geo. Ghol
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
Penn.
Grosvenor, N. Y.
Hawes, Va. Henderson, Tenn. Huger, S. C.
Hungerford, Va.
Hulbert, Mass.
Ingham
Jackson, Va. Jewett
Irving, N. Y.
Penn.
King, N. C.
Kerr, Va.
Love, N. C.
Vt.
Lumpkin, Geo.
Lowndes, S. C.
Maclay
Penn.; Mason, R. I.; M'Coy, Va.
M'Kee
Middleton, S. C.
Moore,* Mosely
Ken.
son, Va.
;
Griffin,
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
* Thomas Moore was from South Carolina, and
Nicholas R. Moore, from Maryland, one of whom only
voted on this question but which it was it is not easy
;
to discover, as they are not dislinguisijed in the journals
by Iheir Clirislian names.
171
Murfree, N. C.
Nelson, Mass. ;
Pickens, N. C. ; Pinkney, Md.
Robertson, Louisiana; Sharpe,
Piper, Penn.
Southard,
Smith, Md.
Smith, Va.
Ken.
Taul, Ken.
Taylor,
Taylor, N. Y.
N. J.
Teliair, Geo. Thomas, Tenn.
Throop,
S. C.
Conn.
;
;
Parris, Mass.
;
;
;
;
;
;
;
;
;
;
;
Townsend, N. Y. Tucker, Va. Ward,
Wendover, N.Y.
Wheaton, .Mass.
Wilde, Geo. Wilkin, N. Y. Williams, N. C.
Willoughby, N. Y.
Wilson, Thos., Penn.
Wilson, Wm., Penn.
Woodward, S. C.
Wright, Md.
Yancey, N.C. Yates, N.Y.—
N. Y.
N. J.
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
80.
Those who voted
Nays
in the negative are,
— Messrs.
Baker, of New-Jersey
Barbour, Va.
Bassett, Va.
Bennett, N.J.
Birdsall, N. Y.
Blount, Tenn.
Brackenridge
Burnside, Pa.
Cudy
Va.
Burwell, Va,
N. Y. Caldwell, Ohio; Celly, N. H. Clayton
Clopton, Va.
Crawford
Del.
Cooper, Del.
Penn. Culpeper, N. C.
Darlington, Penn.
Davenport, Con. Desha, Ken. Gaston, N. C.
Gold, N. Y.
Goldsborough, Md.
Goodwin
Va. Hahn, Penn. Hale, N. H.
Hall, Geo.
Hanson, Md.
Hardin, Ken.
Herbert, Md.
Hopkinson, Penn. Johnson, Va. Kent, N, Y.
Langdon, Vermont Law, Con. Lewis. Va.
Lovett, New-York
Lyle, Penn.
Lyon Ver
mont; Marsh, Vt. Mayrant, S. C. ;"M'Lean
Ken. M'Lean, Ohio Milnor, Penn. Newton
Va. Noyes, Vermont Ormsby, Ken. Pick
ering Mass.
Pitkin, Con.
Randolph, Va.
Reed, Mass. Root, N. Y. Ross, Penn. Rug
gles, Mass.
Savage, N. Y.
Sergeant, Penn.
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
;
172
ShefTy, Va.
Smith, Penn. Stanford, N. C.
Stearns, Mass. ; Strong, Mass.; Sturges, Con.
;
;
;
Taggart, Mass. ; Tallmadge, Con. ; Vose,
Wallace, Penn.
Ward, Mass. Ward,
Webster, N. H.
;
Whiteside, Penn. ;
Wilcox, N. H.— 71.
So the bill was passed and sent to the Senate
for concurrence.
By an analytical arrangement of the vote,
the sense of the different States upon the passage
of the Bank Charter appears to have been expressed as follows
N. H.
N. Y.
;
;
;
;
:
For
New-Hampshire,
its
passage,
1 vote.
173
—Messrs.
Senate.
Barbour, Barry, Brown,
Campbell, Chase, Condict, Dagget, Fromentin, Harper, Horsey, Howell, Hunter, Lacock,
Mason, Va., Morrow, Roberts, Talbot, Tait,
Taylor, Turner, Varnum, Williams.
22.
Nays. Messrs. Dana, Gaillard, Goldsborough,
Gore, King, Macon, Mason, N. H., Ruggles,
Sanford, Tichenor, Wells, Wil.son
12,
(Messrs. Bibb and Thompson, the only absentees, are understood to have been detained
from the Senate by ill health.)
Yeas
—
—
—
AN ACT
thosf provisions of the ^^cl cntilltd^'''' An act to
incorporate the Subscribers to the Bank of the United
States," irhich relate to the right of voting for directors,
and for other purposes.
To ivforce
Skction
1.
Be
it
enacted, <^c. That, in all
elections of directors of the
Bank of
States, hereafter to be held under,
the United
and by virtue
of the " Act to incorporate the subscribers to
the Bank of the United States," whenever any
person shall ofler to the judges of such election
more than thirty votes, in the whole, inclcfding
those offered in his own right, and those offered
by him as attorney, proxy, or agent for any
others, the said judges of the elections, or any
one of them, are hereby authorized and required
to administer to the said person, so offering to
or affirmation, viz.
do solemnly swear, (or
affirm, as the case may be,) that I have no interest, directly or indirectly, in the shares npon
which I shall vote at this election, as attorney for
others ; that those shares are, to the best of my
vote, the following oath
:
/,
knowledge and belief,
owned by the pcrso7is
and in good faith,
whose names they now
truly,
in
175
and thnf, in voting at this election, I shall
any manner violate the first fundamental
article of the " Act to incorporate the subscribers
to the Bank of the United Slates," and tlic said
judges of elections, or any one of them, shall
he authorized and empowered, in their discretion, or at the instance of any stockholder of the
bank, to administer the said oath or affirmation
to any person oifering to vote at any such elec
s/and
;
not in
tion.
Section 2. That no person shall be entitled
any such election, as attorney, proxy,
or agent, for any other person, co-partnership, or
body politic, without a power, for that purpose,
to vote at
being duly executed, in the presence of a witness, and filed in the bank, and on which power
shall be endorsed the oath or aflirmation of the
person, or one of the co-partners, or of the
head, or some of the officers, of the body politic
granting such power, in the words following
do solemnly swear, (or
/,
affirm, as the case may be,) that I am, (or that
the co-partnership consisting of myself and
:
,
are, or that the corporation
of
,
good faith,
or as the case
known by
may
the
name
and in
owners as the
be,) truly
the owner, (or the
case may be,) of the shares in the capital stock
of the Bank of the United States, specified in the
within power of attorney, and of no other shares ;
that no other person has any interest in the said
shares, directly or indirectly, except as stated in
the said power, and that no other power has been
given to any person, which is now in force, to vote
^or me, (or for the co-partnership aforesaid, or
176
body politic aforesaid, as the case may
be,) at any election of directors of ffie said hank ;
which oath or affirmation may be taken before
for the
a notary public, judge, or justice, of the peace,
and shall be certified by him.
Sectiox 3. That, if the judges of any election
of directors, to be held as aforesaid, shall permit any person to give more than thirty votes,
in the whole, at any such election, without the
said person's having taken the aforesaid oath or
affirmation, or shall suffer any person whatever
to vote as attorney, agent, or proxy, for any
other person, or for any co-partnership, or body
politic, without a power for that purpose, as prescribed in the foregoing section, with the oath
or affirmation and certificate aforesaid ; such
of the said judges as shall consent thereto,
shall
severally be
deemed
guilty
of a mis-
meanour, and, on due conviction thereof, shall
be subject to a fine not exceeding two thousand
dollars, or to imprisonment not exceeding one
year, at the discretion of the court before which
such conviction shall be had. And if any person shall wilfully and absolutely swear or affirm
falsely, in taking any oath or affirmation prescribed by this act, such person so offending,
shall, upon due conviction thereof, be subject to
the pains and penalties which are by law pre.
scribed for the punishment of wilful and corrupt
perjury.
Section 4. That, if any person shall directly
or indirectly, give any sum or sums of money,
or any other bribe, present, or reward, or any
promise, contract, obligation or security, for the
177
payment or delivery of any money, present, or
reward, or any thing to obtain or procure the
opinion, vote, or interest of the president of the
Bank of
the United States, or either of the di-
rectors thereof, or the president or a director
of either of the branches of the said bank in
election, question, matter, or thing, which
shall come before the said president and di-
any
rectors for decision, in relation to the interest
and management of the business of the said
bank, and shall be thereof convicted
such person or persons, so giving, promising, contracting,
or securing to be given, paid, or delivered, any
sum or sums of money, present, reward, or
other bribe as aforesaid, and the president or
director who shall, in any wise, accept or receive the same, on conviction thereof, shall be
fined and imprisoned at the discretion of the
court, and shall for ever be disqualified to hold
any office of trust or profit under the said cor
poration, and shall also, for ever be disqualifiec
to hold any office of honour, trust, or profit, un.
der the United States.
;
Approved, 3d March, 1819,
178
In the preceding peges, the compiler has attempted to give a brief but comprehensive view
of the national banking operations, from the incorporation of the Bank of North America, 1781,
to the present time.
As the present Bank of
the United States particularly engages the attention of the community, giving rise to a great diversity of sentiment, the compiler has inserted
its
charter in
full,
account of such
with a faithful and impartial
official
and
legislative proceed-
ings in relation to the same, as he thinks will
give the attentive reader a just idea of the whole
subject
and he would stop here, were it not for
the unwearied pains taken, to create an erro:
neous impression concerning this institution.
In the absence of tangible facts or charges
such as by a plain statement of facts, or by a
fair
course of reasoning could be either sub-
stantiated or refuted, the services of artful and
ingenious writers are brought into requisition,
whose sole object seems to be, to operate, by
means of vague and denunciatory charges, upon
the feelings of that class who are guided by no
fixed or rational principles in arriving at just
conclusions, but are influenced wholly by their
passions.
It is well known that thousands of
indefinite charges can be made
such as " aristhe
tocratic, corrupt, or dangerous institution"
—
—
charges themselves, having no precise or definife meaning, will admit of no definite reply or
refutation.
They are similar to the terms
"rascal," "villain," "scoundrel," and such
general terms of scurrility applied to individuals,
which, Mr. Justice Blackstone in his Treatise
179
upon Slander, says, " may be used with impunity, and are part of the rights of the vulgar."
The compiler is led to the foregoing remarks
from the fact, that a gentleman of high standing
an opponent of the bank intimated to the
compiler, that he might publish every thing in
favour of the bank, and nothing against it.
That intimation led to the following correspondence
—
—
:
» September 13, 1834.
"Sir,
" In consequence of the intimation made by
you, that in my forthcoming work, I might publish every thing in favour of the United States
Bank, and nothing against it it is due to myself to repel any such insinuation, and to say
to you, that I will publish any well attested fact,
tending to show any thing improper on the part
of the bank, that you, or any other person, may
be pleasecj to furnish me with. I say, further,
that I will publish any charge, that you may make,
under the responsiblity of your own name.
" Respectfully,
"R. K. MOULTON."
—
(REPLr.)
"Monday
morning, September 15, 1834.
" Sir,
" Your favour of Saturday was handed me at
too late an hour for a reply on that day
I have
neither the time nor inclination to hunt up
charges against the Bank of the United States.
—
180
The
before the people, they underpresumed that you, as a faithful, and I have no doubt, competent historian,
will be able to find instances enough of the iniquities of that corrupt institution, if you search
subject
stand
it
— and
is
it is
for them.
"
I
."
am, &c.
(akswer to the foregoing.)
" September 17, 1834.
" Sir,
"
1
believe that
I
am
in possession
of every
document in relation to the United States Bank,
and assure you that I shall give a faithful abstract
of every thing ever urged by the administration
or its supporters against that institution.
If no
other facts are furnished me, 1 must, as an
honest man, and as one of the grand inquest of
The
the nation, decide in favour of the bank.
bank may be guilty of " iniquities"* that all the
" people" are not apprized
of, and as I cannot,
usual intercourse, obtain any well authenticated facts, except such as are already before
the public, and that I may be fairly entitled to
the appellation of a " faithful" (I will not say
" competent") historian, T shall advertise for
new information.
in
my
" Respectfully,
"r] K. MOULTON."
Pursuant to the promise, contained in the
foregoing, I caused the following advertisement
181
to
be inserted
the
in the
Commercial Advertiser, and
New-York Evening
Post, of the 30th Sep.
tember, 1834.
"
To
the Republicans of the
City and
State
of New- York.
"The undersigned is compiling a true history
of that aristocratic institution, the United States
Bank, which will be issued from the press in a
few days. The undersigned wishes to collect
all the information he can, showing its iniquity,
and will consider it a great favour in any one to
furnish him such well attested facts as are
proper to lay (to be laid) before the public.
Neither the money of the bank, nor the frowns
of aristocrats, shall deter the subscriber from
publishing the truth.
"R. K.
MOULTON,
» 42 Dey-street."
On
the appearance of the foregoing, the
com-
a number of the
opponents of the bank, for the bold and manly
stand taken by him against "the monster," as
the bank was termed by some ; but no one has
been so good as to furnish him a single charge
against its integrity, nor to furnish him with one
" well attested fact" of its "iniquity." Under
these circumstances, the compiler can do no
more than to notice such common-place charges
Hs have come under his notice, of which the
following are the principal.
First, It was generallv admitted until recently,
piler
was highly caressed by
\7
182
bank ought to be established with a charsomething like the present " with modifications.^^
(See page 183-4.)
Second, The branches of the bank do not
pay the specie for each others' notes neither
will they receive them in payment of notes
made payable at a particular branch, nor will
such branch receive the notes of other branches
in payment of debts due to it
that is to say, the
branch bank of New. York will not pay specie,
nor otherwise redeem the bills issued and made
payable at the branch in New-Orleans, nor will
in payment of any debt
it receive such bills
due the branch bank in New. York. (See page
that a
ter
;
:
184.)
Third,
The bank
is
a corrupt, dangerous, and
aristocratic institution.
(See page 184-5-6.)
Fourth, The bank might do great mischief,
and overturn the government. (See p. 186-7.)
Fifth,
The bank
controls the
government and
people it now governs the people, and if it
should be re-chartered, its charter would then
become perpetual there would then be two
the poor people
classes, the rich and the poor
would lose their right of voting, and the rich
would govern the country. (See page 187-89-190.)
^i Sixth, The bank is not sufficiently under the
control of the people.
(Seepage 190.)
Seventh, The bank is unconstitutional. (See
;
;
;
page 191-2-3-4.)
Eighth, The bank is not necessary as the
state banks might perform for the government
all the duties now performed by that institution.
(See page 194-5»''
183
Ninth, The bank caused the late pressure in
(See page 195 to 202.)
ihe money market.
Tenth, The United States Bank oppresses
(See page 202-3-4.)
the state banks.
Eleventh, The bank
(See page 204.)
is
a political institution.
The bank uses its money to buy up
and control elections. (See page 205-6.)
Twelfth,
votes,
Thirteenth,
The
people are in favour of the
measures pursued by the executive, in relation
(See page 206
to the removal of the deposits.
to 210.)
Fourteenth,
Webb
The bank loaned James Watson
(See pa-e 211.)
stockholders of the bank recently passed a vote of thanks to Nicholas Biddie, their president, for the able and faithful
manner in which he had discharged the trust
reposed in him.
(See page 215-16.)
In concluding this work, it will be more con
venient for the compiler, in some cases, to use
the first person I than the usual term compiler.
These objections will be briefly noticed in
$52,000.
Fifteenth,
The
their regular order.
First,
Modifications of the present charter,
&c.
This appears
to
be more easily said than
About three years since, as a
pointed out.
matter of curiosity, I asked twenty of the most
intelligent supporters of the present administration, whether they were in favour of " re-chartering the bank."
Eighteen answered, "Yes,
with modifications."
On asking them what
modifications they thought were necessary, fif-
184
teen could not suggest a single one.
The three
others mentioned what they thought ought
take place.
One in particular observed, with
considerable confidence, that the directors ought
to be chosen by the people.
Thinks I, that
might be a good project enough, if the stockholders they who own the bank, would consent
to it.
Upon a little reflection, I thought it extremely doubtful whether men wishing to vest
their funds in stock, would place it in an institution, in which persons having no interest should
possess an equal voice and control.
For a list
of modifications suggested by diflferent members
of Congress in 1832, see page 98 to 104.
—
—
Second,
bank
An
account of the operations of the
meet these charges, is given
that would
pagej58
to Gl.
Third,
The bank
and aristocratic
is
a corrupt, dangerous^
institution.
The adjectives " corrupt," " dangerous," and
" aristocratic," appear, in this case, to have an
indefinite meaning, and therefore will admit of
no definite reply. Could it be clearly shown,
bank oppressively exercises its corpopowers for any purposes, other than the
legitimate one contemplated in its charter, such
that the
rate
for instance as taking advantage of the necessitous,
and charging them
fifteen or
twenty per
cent, on discounts, or making loans on real property for a short time, with a verbal promise of
a renewal at the time that it should become
due, and afterwards force a sale of the property,
and buy it in themselves on speculation, then
185
but so long as
might the charge be sustained
the bank manages its concerns according to the
provisions of its charter, it is difficult to determine, how the charge of " corrupt institution,"
can be substantiated. We might say of an individual, that he is "corrupt," but so long as
that individual violates no law, and uses no deception with his fellow man, no one would be
justifiable in making such a charge.
There appears to be the same difficulty in the
term " dangerous" as in the word " eorrupt."
One's imagination might lead him to suppose a
pubhc hotel, a boarding-house, or a seminary of
And
learning to be a " dangerous institution."
indeed he might justly, could he reasonably
show, from the manner in which either was
;
was strong probability,
some serious evil would flow from it, or that
some heinous offence had already arisen out of
established, that there
that
and would probably be repeated but, in the
absence of all such contingencies, no one
would be warranted in exciting the fears of the
community, as to what might happen.
it,
;
Equally,
if
not
more
difficult,
it is
to define
" Aristothe term "aristocratic institution,"
cratical," according to VV^alker, means "relating
to aristocracy," and " aristocracy," means,
" that form of government which places the
in the hands of nobles ;" and
nobles or nobility are generally understood to
be that class who, from the constitution or laws
of a country, possess peculiar and inherent
supreme power
rights.
This definition cannot be made appliWe are, however, free to
cable to the bank.
17*
186
admit, that the term
*'
aristocratic," has a kind
of popular definition, which it is difficult to ex^
plain
say that class, who, by their great
wealth, acquire a kind of factitious consequence
in society that they otherwise would not possess.
Assuming this definition, we are led into a difficulty, in determining who partakes of the aristocracy whether it be the directors of the
bank, or the stockholders ; if the former, they
must be a singular species of aristocracy, inasmuch as they are chosen by the people, whose
they must therefore,
interest they represent
from the very manner in which they are conIf ihe stockstituted, be democratic aristocrats.
holders partake of the " aristocracy," then does
this country present the singular spectacle of
aristocratic widows, aristocratic orphans, and
:
—
—
;
aristocratic
day labourers.
Fourth, The bank might do great mischief,
and overturn the government.
There is no telling what might he done. A.
druggist, with arsenic in his shop, might poison
himself.
A man, entrusted with a razor, might
cut his own throat, and if a person were to
light up a lamp, he might set his house on
fire
;
then
all
the firemen in the city might re-
fuse to do their duty, and then the whole city
Seriously, such an obmight be laid in ashes.
jection as this, deserves to be noticed only with
ridicule, or with
contempt.
All the mights
men-
tioned, are within the range of possibilities, but
any one pretend to say, that they are within
range of the most distant probabilities 1
There is about as much reason in saying, that
will
the
187
the
Bank of
the United States might subvert
as there is in saying that the
the government,
city of New-York might be detroyed by fire in
consequence of the neghgence of the firemen.
Fifth, The bank controls the government
and the people, it now governs the people,
an! if it should be rechartered, its charter
would then become perpetual, there would then
be two classes the rich and the poor, the poor
people would have to work for just what the
rich might please to give them, they would lose
the right of voting, and the rich would govern
—
the country.
What American
citizen, on even reflecting
necessary to notice such a farrago of
nonsense, as that contained in the foregoing
sentence, " does not blush, and hang his head,
to think himself," (not a " man," as the poet
says,) but an American citizen. Yet such is the
case.
I have heard one of the Tammany Hall
orators, in haranguing the multitude, make use
of the above language.
A person that would
consider any one who should even think him to
be any thing but a gentleman, a patriot, and a
When
scholar, as doing him great injustice.
that
it is
the orator delivered this sentence, old Tammany resounded with the hurras of the auditors.
boast of our intelligence, our refinement,
and our patriotism.
even go so far as to
say, that none of the nations of the old world,
begin to compare with us in these qualities.
Would not the above be a fine specimen to send
across the Atlantic ?
But to the argument.
With the present views of a majority of the
We
We
188
American people,
that President Jackson is the
" government," there can be no doubt, but that
"the bank is greater than the government and
the people," and in no transaction, since his induction into office, has he had so great a cause
of complaint, on account of resistance " to the
government," as in his controversy with the
Bank of the United States, for, whilst a trembling cabinet, and a servile House of Representatives, have bowed submissively to his unlawful mandate, that institution, knowing its- own
rights, has had the moral courage to defend them.
It is said that the bank governs the people
—
so does the New-York canal govern, not only the
people of the state of New-York, but of the adjoining states. The Brooklyn ferry governs the
citizens of New-York and Long Island.
The
Fulton market, bakeries, grocery stores, umbrella, and hundreds of other manufactories,
govern the people of the city of New-York.
Thousands of things, which from habit and interest, have become indispensable, govern us
and it would be impossible for any government
of the people to break these governments down.
Why then should not the United States Bank
come in as a like governor? The government
of the United States, under a partial insanity,
similar to that which now pervades the people
of this country, tried the experiment of dispensing with a bank government, and were
very glad again to receive its assistance.
As to a perpetuity of its charter I do not
think that the charter of the present, or any
;
—
189
The peoother bank, will become perpetual.
ple of this country, I should judge from present
appearances of things, are doomed to periods
of popular delusion. Led on by artful and unprincipled leaders, whose only end and aim are
that of self-aggrandisement, they will be making experiments, until experience shall have
taught them their folly.
A propensity for the
marvellous, and for experiment, seem to be an
inherent principle, particularly among the ig1 distinctly recolnorant and inexperienced.
lect, that when a boy, one of my playmates
told me that he had been informed, that the
skin of his tongue would be taken off, by touching it with a frosty piece of iron
I told him
that it would
he would not believe me in
spite of my remonstrances, he would " try the
experiment," then, and not till then, was he
satisfied
so will the people of the United
States be satisfied, from actual experiment,
whether a national bank is necessary, if they
suffer the present institution to go down, and do
not establish another.
The charter of the
Brooklyn ferry is not perpetual, but who believes
that when the term of the present company shall
have expired, that another grant will not be
made, either to the present, or to some other
—
—
—
;
company
As to
?
the slang about two classes, the
rich and the poor, the poor being deprived of
voting and the like, it is not worthy of notice
that there ever has been, and ever will be, in this
as well as in all other countries, some that will
jpossess a greater share of wealth than others,
190
known
Bank is
; but to say that the United States
calculated to elevate one class, and
depress another, or that it can, in any event, be
the means of depriving the poor of" the right of
suffrage, is too preposterous an assertion to
merit a passing notice.
Two classes however
will make the assertion
one, the knaves, who
do not believe what they themselves say the
other, that class that are so degraded, that to
them neither reason nor fair argument would
is
to all
—
avail
any
Sixth,
—
thing.
The bank
is
not sufficiently under the
control of the people.
This may be a doctrine congenial
to the
views of those who wish to either actually
possess themselves of the avails of the honest
industry of others, or to bend them to their own
selfish purposes.
It is admitted, that it would
be quite convenient for political aspirants, and
would tend to subserve their interests, to have
such a control over the United States Bank, as
would compel its directors, in making loans, or
transacting any other business of the bank, to
look well to their political consequences,
they would then, in the view of some, be " sufficiently under the control of the people.^''
No
honest man, however, that faithfully attends to
his own business, will pretend, that the United
States Bank ever did, or ever can, from the
manner in which it is constituted, invade his
He is satisfied that the law sufficiently
rights.
protects him, and is willing that others should
be equally protected.
191
Seventh,
The bank
is
unconstitutional.
the doctrine of President Jackson. In
his veto message of July 10th, 1832, he says,
" It is maintained by the advocates of the bank,
that its constitutionality in all its features ought
to be .considered as settled by precedent, and
That
is
by the decision of the Supreme Court.
conclusion, 1 cannot assent.
the
To
this
If the opinion of
Supreme Court covered the whole ground
of this act,
it
ought not
to control the
co-ordinate
of this government. The Congress,
the Executive, and the Court, must each for
itself be guided by its own opinion of the conEach public officer, who takes an
stitution.
oath to support the constitution, swears that he
will support it as he understands it, and not as
it is understood by others."
Now hear what Mr. Madison, one of the
ablest framers and expounders of the constitution, says in relation to the binding force of
a decision of the Supreme Court " The case
in question, (says Mr. M.) has its true analogy
in the obligation arising from judicial expositions of the law on succeeding judges
the
constitution being a law to the legislator, as the
law is of decision to the judge.
" And why are judicial precedents, when
formed on due discussion and consideration, and
deliberately sanctioned by reviews and repetitions, regarded as of binding influence, or raauthorities
—
;
ther
of
authoritative
force,
in
settling
the
meaning of a law ? It must be answered. First,
Because it is a reasonable and established
axiom, that the good of society requires that
192
the rules of conduct of its members should be
certain and known
which would not be the
;
case if any judge, disregarding the decisions
of his predecessors, should vary the rule of
law according to his individual interpretation
of it.
Misera est seroitus uhi jus est aut-vagum
aut incognitum.
" Second, Because an exposition of the law,
publicly made, and repeatedly confirmed by the
constituted authority, carries with it, by fair inference, the sanction of those who, having made
the law their legislative organ, appear, under
such circumstances, to have determined its
meaning through their judiciary organs.
" Can k be of less consequence that the
meaning of a constitution should be fixed and
known, than that the meaning of a 7aw should
be so? On the contrary, if a particular legislature, differing in the construction of the constitution, from a series of preceding constructions,
proceed to act on that difference, they not only
introduce uncertainty and instability in the constitution, but in the laws themselves ; inasmuch
as all laws preceding the new construction, and
inconsistent with it, are not only annulled for
the future, but virtually pronounced nullities from
the beginning.
" But it is said that the legislator having
sworn
to support the constitution,
must support
it
own
construction of it, however different
from that put on it by his predecessors, or what,
ever may be the consequences of the construein his
tion.
And
is
not the Judge under the
same
193
oath to support the law ?
Yet, has it ever heen
supposed that he was required, or at hljerty to
disregard all precedents, however solemnly repeated and regularly observed
and by giving
effect to his own abstract and individual opinions, to disturb the established course of prac;
in the business of the community ?
Has
wisest and most conscientious judge ever
scrupled to acquiesce in decisions in which he
tice
the
has been overruled by the matured opinions of
majority of his colleagues
and subsequently to conform himself thereto as to authoritative expositions of the law?"
Mr. Madison then goes on to state that he
opposed the creation of a bank in 1791, being
as he thought not warranted by the constitution,
that it being an original question, it was proper for him, as a legislator, to give his views
the
;
—
freely as to its constitutionality
but the measure having been sanctioned by the highest authority it was his duty, as a good citizen, to
cheerfully submit to the majority
that the constitutional question being settled, the only proper question for discussion was its expediency.
He therefore says, that " A veto from the Executive, under these circumstances, with an admission of the expediency and almost necessity
of the measure, would have been a defiance of
all the ohJigations derived fro7n a course of precedents, amounting to the requisite evidence of
the national judgment and intention."
Speaking of the bank of 1791, he says in
reference to the question of its i-e-eharter in
181 1, that "On a single question of constitu;
—
—
18
194
tionality, there
of
was a decided majority
in
favour
it."
Eighth, The United States Bank is not necessary as the State Banks might perform for
;
the government,
by
all
the duties
now performed
that institution.
It
requires but a slight knowledge of the na-
ture and operations of the general government,
show that they who are under such a belief,
are egregiously mistaken.
It is admitted that banks are necessary as a
depository of the public funds; the general government then, so far as its fiscal operations
are concerned, must necessarily have the control of these institutions. State banks, as is well
known, do not derive their existence from the
general government, and in their operations,
are entirely independent of it they therefore
have the right of receiving or not receiving the
public deposits, as may best suit their interests
or inclination.
The general government, it is
admitted, might pass a law, authorizing the pub.
lie deposits to be made in the state banks ;
but it would be left for those institutions to determine, whether thoy would receive them or
not,
they would be under no obligation to
comply with the provisions contained in such a
law some might accede to the terms, and
some might not and under any circumstances,
there would not,^ and could not be such a security to the general government, in relation to
its fiscal concerns, as is necessary for its successful operations.
The embarrassments ex-
to
;
—
—
—
195
perienced and losses sustained by the general
government, during the five or six years that it
was without the aid of a National Bank, ought
to admonish that body not to expose the country to a repetition of like disasters.
The bank caused the late pressure in
money market. This is a definite charge, and
Ninth,
the
although asserted with apparent confidence,
through the newspaper press, and by men in
high political stations, still a plain statement of
facts will conclusively show any one that the
charge is wholly unfounded.
It is alleged, that in order to produce a pres-
bank curtailed its discounts. Now it
to any one, conversant with banking
operations, that the amount of its discounts depend upon various contigencies, particularly
upon its means and that its deposits consti-
sure, the
is
known
—
a part of its means.
By way of illustrasuppose the capital of a bank to be $1000,
tion
and its steady deposits $300, if the three hundred dollars be withdrawn by the depositers,
and that amount be not replaced from some
other quarter, any prudent institution, supposing no change in the times, would curtail its
discounts to the amount of three hundred
dollars.
At the time the depository of the
public funds was changed from the United
States Bank to the State Banks, the public deposits in the United States Bank amounted to
$9,868,435 58.
tute
—
This amount, it is admitted, could not be lawdrawn from the bank, for any purpose,
fully
other than in
payment of public claimants, but
196
" the government" it appears, took " the responsibility"of withdrawing more than a million
and a half of dollars, to be placed in the State
Under such a state of things, the bank,
seeing that the faith of the nation was violated,
that its laws and solemn obligations were left to
the caprice of one man, who did not hesitate to
disregard them or trample them under foot
under such circumstances, it is repeated, (he
United States Bank could consider the public
deposits as only so much dead capital, liable
to
be called for at any moment, and which
they could not with safety loan out.
Banks.
;
197
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198
o
199
In framing the foregoing table, reference has
been had to the "deposits of individuals." If,
during any month, the individual deposites had
—
been increased, the amount of the increase was
to the means
if diminished, the amount
of diminution was deducted from the means.
The average monthly amount of increase of
loans by the bank, after deducting the diminution of its means, was $5,937,860 47.
If, for
instance, the people were to render an account
current of oppresions against the bank, it would
be fair, upon every principle, to allow that institution to curtail its discounts equal to the
amount of public deposits for we learn from
Governor Marcy's Message of March 23, 1834,
to the legislature of the state of New-York, that
such state banks in the city of New- York alone
as received the public deposits had " actually
discounted more than four millions more than
they otherwise would have done."
added
—
;
The bank was admonished
to
curtail its dis-
counts, not only from a removal of the public deposits by government, but, from the govern,
ment's hostile attitude.
The newspaper press
and public
officers generally under the influence
of the general and some of the state governments, were continually teeming with denunciations against the bank,
one press went so far,
as to recommend Congress to sequester the
whole of its funds and other effects. The bank
moreover had reason to fear that a " run for
specie" would be made upon such of its branches,
as required, in its operations, but a small proportion of coin, and where but little was depo-
—
200
sited ia their vaults.
A
made
run was actually
Savannah, which it was generally believed, was aided and abetted by some
officers of government.*
Yet, notwithstanding
all these untoward events, the bank weathered
upon the branch
the storm
;
it
at
continued to extend
its
indulgence
the state banks, and althouijh at the imminent hazard of being severely embarrassed, it
afforded nearly its usual facilities to the people.
to
* For the following anecdote in
upon the Savannah branch, I am
relation to the
"run"
indebi.ed to a gentle-
man who
professed to know the whole circumstance.
" Soon after the removal of the doposits, the parent
became
fearful that a run mi(.rht be made upon
bank
some of its branches, that had but little specie. They
accordingly instructed the branches in the large commercial cities, to receive in deposit the notes of all the
branches, and to report daily to the parent bank, the
amount received, payable at each branch. The branches
of New. York, Boston, and other jiliices did so. The
parent bank perceived, that for three or four days, the
New-York branch had taken no notes on tiie Savannah
branch, this excited suspicion, and the parent bank despatched a large quantity of specie to Savannah. It so
happened, that a day or two after the arrival of the specie at that place the branch was called upon to redeem
it w as ready for them.
in specie, $'300,000, when lo
The holders of the bills did not know what to do they
did not want the specie, the object of their journey from
New-York proved abortive— they hiid been at considerable expense in their journey from New-York, and must
necessarily be at considerable loss in taking home their
$300,000 in specie. The projectors of the plan in NewYork were mortified and ashamed, and in the last agonies of disappointment and chagrin, were left to cry out,
" Monster Monster !"
—
—
—
!
—
I
20i
If then, as the question may be asked, the
United States Bank and the state banks afTorded their usual facilities, why did so great pecuniary embarrassments pervade the whole country ?
The question shall be answered accordIt is well known,
ing to my view of the subject.
that what is generally termed a plenty or scarcity
of money, does not depend entirely upon the
amount of money in a country, but upon its circulation.
Millions might be locked up, and not
do so much service as a twenty dollar bill. The
circulation of money is owing in a great measure to confidence between man and man,
by
way of illustration, suppose a neighbourhood of
twenty persons, and mutual confidence, as to
ability and integrity, pervading the whole
A.,
having a five dollar bill, parts with it to B. B.
parts with it to C, and so on through the whole
—
—
;
—
twenty that five dollar bill, so far as exchange
is concerned, might, in one day, perform the
office of a hundred dollar bill, passing only
from one man to another. Now let us reverse
the scene
suppose the same mutual confidence
to pervade this community as ever
but owing
to extraneous causes, over which they could
have no control, mutual fears are entertained
of each others'' ability ; does not every one perceive that Mr. A. will either lock up his five dollar bill, or exact unusual security ? and does not
every one perceive, that in consequence of Mr.
A.^s locking up his Jive dollar hill, a shock is
given to the whole community of twenty ? The
—
;
foregoing,
—
as
is
believed,
is
of the causes that produced the
a
fair
picture
late six
months'
202
most severe
has been felt
embarrassment
in this countr\\
that
for
years
— In consequence
made upon the United States Bank,
and fear seized the whole community,
its consequences are too famihar to all
and
disguise the fact as we mas% when we look for
the cause that produced bankruptcy in some of
of the war
distrust
—
—
our best established mercantile houses that
compelled manufactories to close their works
threw hundreds of honest and industrious labourers out of employ, bringing poverty upon
themselves and families that drove from employ hundreds of widows, that had no means of
support for themselve's and their children, exDiscept what they earned with their needle.
—
guise the fact, it is repeated, as we will, the
whole of this distress is principally ascribable
to the rash and unlawful measure of President
Jackson, in causing the public deposits to be
removed from the United States Bank.
Tenth, The United States Bank oppresses the
State Banks.
is a definite charge, to which a
can be given. It is destitute of
truth
the balance due the United States Bank
from state banks for years, as appears from official documents, has amounted to from two to
fJiree millions of dollars.
No state bank, it is
believed, has ever made any such complaint,
and it is a notorious fact, that the most amicable
relations have for years existed between the
United States Bank, and the state banks, and
that many have petitioned Congress for a resto-
This again
—
definite reply
:
—
203
ration of the
Had
public
deposits, at*d
for its re-
charge been no more than
the ordinary story of those newspapers, who
only aim at deception, it would have l)een entitled to the same consideration as other charges
of like character
but, the Executive of the
State of New-York, Governor Marcy, in his
Message of March 23, 1S34, to the Legislature,
recomnjending the state to pledge its faith for
$6,000,000 (a measure which the knowing ones
say was intended to mortgage the state for tha
benefit of the " Albany Regency"), expressly
says
" It is undoubtedly true that much of the pressure upon the money market has been occasioned by the destruction of confidence but it is
not easy to perceive, that it is to be charged as
the necessary consequence of the action of the
government. It is the consequence of the attitude assumed by the Bank of the United States
towards other banks."
Again, the Governor says, " the efforts of
the bank seem to be directed against the monied institutions, and business relations of the
State of New-York."
It is impossible that Governor Marcy should
not have known, when he penned the above
sentences, that they were wholly unfounded.—
It requires no argument to show them to be so,
the official report of the bank, and the absence
of all complaint on the part of state banks, show
that he was not warranted in the assertion.
When the Message was received in New- York,
charter.
this
;
:
;
—
the intelligent
men
of
all
parties treated
it
with
204
—
In what a predicament would Governor Marcy have been placed had a resolution passed the Legislature, calling upon his
Excellency, to lay before that body the evidenBut Governor .Marcy well
ces of his charges?
knew what kind of men he was addressing.
And it is to be regretted, that in both branches
of the legislature, there was but one man, who
had the moral courage to expose the mis-statements of the Governor. As to the "mortgage"
as it was called, it was generally understood by
ridicule.
—
—
dealers in money, that the " Albany Regency"
had been speculating largely in bankstocks, that
some had failed and others were about failing,
on account of the " scarcity of money" their
notes were becoming due, and they could not
raise the funds to meet them, and that the " six
—
mortgage" was passed for their benefit,
under the pretence of relieving " the people."
It was well known that the great body of " the
people," the farmers, &;c. would never receive a cent, nor know what would become of it
although their farms were mortgaged for its
payment.
million
—
Eleventh,
The bank
is
a political institu-
tion.
Immediately after the bank refused to remove
Mr. Mason, President of the branch at Portsmouth, because he was a friend to Mr. Webthe cry of " political institution" was
ster,
(For a history of that transaction, see
page 140-1-2.)
raised.
205
Twelfth, The bank uses its money to buy up
votes and control elections.
Truly, if the bank, and particularly Nicholas
Biddle, is guilty of every thing he is charged
with, he must be a " monster,"
Neither an-
—
cient nor
modern
history can furnish an instance
of so extraordinary a character take for instance the following
I recollect reading a long
article two or three years since in the Evening
Post, showing that the bank was insolvent
and,
if I mistake not (I have not the paper at hand),
that on winding up its concerns, the holders of
Since that time, it seems
bills would suffer.
that this very Nicholas Biddle has not only
resuscitated the stock of the bank, $35,000,000,
but has got about ten millions surplus
and
has paid the stockholders an annual dividend of
7 per cent, besides.
But he did not stop here
he first bought up 8 or 10 Jackson Senators,
and about 25 or 30 Jackson members of Congress
seeing that Jackson men could be so
easily bought, he directed his attention to the
city of New-York, and bought up several thousand he then went to Albany, Troy, Utica and
several towns in the State of New-York, and
bought as many as he wanted there.
He then
quit purchasing at retail, and went into the wholesale business
bought up Connecticut and Rhode
Island
not satisfied with that, he goes to the
" ancient dominion," buys up that then going
to the extreme south, buys up the State of Lousiana, coming north, he buys up on his way,
North Carolina, Indiana, Illinois, and Missouri.
Kentucky he did not want he had bought that
:
;
—
—
—
—
—
—
;
—
—
—
—
—
—
19
206
state
before— and to cap the climax, seizes upon
government money, and refuses to
^'158, 000
it up to the Secretary of the Treasury.
do not know what rule is adopted by Biddle in
paying off his troops. When men go out privateering, the captain has a certain number of
shares, the mate a less number, and so down to
the cook and cabin-boy.
Now, I am no more
than a hand before the mast, but from the embarrassments experienced by the community
from 1812 to 1817, in consequence of the want
of some institution that could regulate its currency, I have ever been in fiivour of a Naand whilst many who honestly betional Bank
lieved in its utility, have shrunk from openly
advocating it, for fear of injuring their popularity, I have fearlessly advocated one through
good report, and through evil report still I never
have received, and never expect to receive, either
directly or indirectly, one cent for my services.
I do not know how much my share of the prize
money would be, but if any one wishes to
give
I
—
—
;
;
engage
in
a
speculation,
I
will
sell
it
out
cheap.
the reader maj- suppose that in
foregoine description of Nicholas Biddle,
the object of the writer is nothing but ridicule.
Seriously,
the
may appear ridiculous to some, is adbut the description does not contain a
single charge, but that which has emanated
from what many consider to be " high autho-
That
mitted
it
;
rity."
Thirteenth,
The
jicople arc in
favour of the
207
vneasures pursued by the executive, in relation
to the removal of the deposits.
In speaking of the weight that ought to be
attached to the views and wishes of the people,
the compiler can only give his individual opinion upon the question, and will frankly state
what would be his course, if a legislator. As to
the main question of consulting the views and
wishes of the people, the compiler has to say,
that the whole structure of our government, and
its real essence, are the views and wishes of the
people, and he will yield to none, in a proper
respect to the public will, when fairly expressed.
All public acts of Congress operate generally,
and are supposed (as they in reality do) to
concern the whole community. But notwithstanding the general rule, it must be admitted
Congress more directly
one class of community than another
and considering that a part of our social systern is that of compromise, or mutual concession, it is believed, that it may be admitted
that particular acts of
affect
;
as a safe principle, to particularly consult ihe
and wishes of those that are the most
views
directly interested or concerned
in a law, or
so long as it does not
affect the interests of others.
Suppose, for instance, that a number ofcartmen, of New-York,
government measure,
Philadelphia, Boston, Baltimore, and other lurge
cities were to petition Congress, upon a subject
in which their interests were directly concern-
—
ed will any one pretend to say, but that the
views and wishes of the cartmen themselves
would be entitled to greater weight and con-
208
sideration, than an equal number of farmers,
merchants, whose interests
mechanics,
or
might not be affected ? Now reverse the case.
It is well known, that one of the objects in establishing the Bank of the United States, was
to the trading community.
well known, do not generally
deal with the bank, not but that there w^ould be
a perfect propriety in their doing so, should
to
afford
facilities
Farmers, as
is
lead them to it^— but the very
reverse is the case the interests of that class
of community do not generally lead them to
borrow money of the bank. Where a farmer
deals one dollar with the bank, the trading
community, say the commercial, mercantile,
and manufacturing portion, deal hundreds of
thousands and if it would be right and proper,
to particularly consult the views and the interests
of the cartmen in the case already supposed,
why not, by the same rule, consult the views
and interests of the trading portion of commu.
nity?
God forbid, that the compiler of thi(g
work should advocate the principle, or wish U)
see the time ever arrive, that greater privilegj&s
should be conferred upon merchants than upon
any other class but he does insist, that they
have equal rights and interests with the rest of
the community, and that those rights and inIt would
terests ought to be equally protected.
seem, however, from the tone of some prints,
that they are nothing but a band of mercenary
aristocrats, having no common interest and feelings with the rest of community, and that the
petitions to Congress, with the names of " Jim
their interests
;
:
;
209
Crow," " Jim Crow, jr." " Black Hawk," and
the like, ought to be considered as " the voice
-of"
the people," against the aristocrats, and
be entitled
to
equal weight with those bearing
the signatures of our most respectable merchants, manufacturers and mechanics.
With
these preliminary observations, the compiler
will offer a few remarks upon the petitions presented to Congress during the session of 183334, upon the subject of the removal of the deposits.
He has nut the statement made by the
Clerk of the Senate, at hand, but feels confident
that the number of memorialists against the
measure, was over 120,000, whilst the number
in its favour did not exceed 25,000, say five to
one against the measure.
The compiler cannot speak confidently of
the character of any memorial in favour of the
measure, excepting that from New-York, which
contained, as was said, about 8,000 names.
The compiler examined 3,000 names, by means
of the Xew-York Directory.
This ia a work
intended to contain the name of every householder, whether male or female, with their
street and number in the city.
It also contains
all the usual places of persons doing business,
say their stores, shops, or w'hatever they may
be.
In the directory for 1833, were about
30,000 names; in suine instances a pei son's
name will be inserted t vice, say John Doe and
Richard Roe are a firm that would be inserted
in the directory
also the place of residence
of both John Doe and Richard Roe, njaking
three insertions in tlie directory, for two names.
to
;
19*
210
firm??, for females, and for foreigners, inserted in the directory, deduct one-fourth of the
number of names, and there would be left in
For
work 22,500 names of legal voters, being a
more than half the actual number in tjie
city, the whole number being at least 40,000.
Of the 3000 names examined by the compiler,
a little short of 800 were found in the directory,
and from that ratio, about 2150 names of the
" Tammany Hall Memorial" could be found as
occupants of a dwelling, and upon the most
liberal calculation not 3800 of the SOOO could
have been voters. Among the names not found
in the directory, were those of "Jim Crow,"
"Jim Crow, Jr.," "Black Hawk," and many
Now, it seems that
others of similar import.
with all the pressing solicitude of more than
that
little
100,000 professed freemen of good character
and standing in society, humbly petitioning for
the restoration of the public deposits, a measure
in their opinion, calculated to relieve
them not
only from present pecuniary embarrassments,
but also from impending bankruptcy, with all
this weight of public sentiment, the chief magistrate of a nation, jwofessing to be the most in-
and the most patriotic in the world,
openly avows that if every man, woman, and
child in the country were to fall down upon their
knees, and petition for the restoration of the
public deposits, he would not grant their request.
I can only say, that if this is republicanism, let
telligent,
me
live
lican.
and
let
me
die
any thing but a repub-
211
Fourteenth, The bank loaned James Watson
$52,000.
There has probably been no act ot" the bank
which has afforded ingenious and unprincipled
men a finer field fijr misrepresentation and fiir
exciting groundless suspicion, than this simple
transaction.
The only proper answer to be
given to the charge, is, that the directors of the
bank had a right to make the loan, fisr which
they were accountable to the stockholders, and
to the stockholders only.
Corporate companies,
Webb
like individuals,
own way, and
any one, nor
manage
their
concerns
in their
so long as either does not molest
in
any way infringe upon the
rights of others, no one has caiise of complaint
scarcely a porter-house in the United
which a stranger might stop, who
would not find politicians (some of whom, it is
presumed, scarcely know what bank stock
but there
is
States, into
means) that would make him believe, from the
vehemence of their complaints, that the Bank of
the United States, had been squandering vast
amounts of their property. But, waiving the
plea of the legal right of the bank to make the
loan, a plain statement of facts will be
given,
which will convince any honourable minded
man, that there was nothing in the transaction,
tending in the least degree to implicate the conduct of Col. Webb, or the bank.
James Watson Webb is, and has been for
years, the proprietor of one of the most lucrative and extensive newspaper establishments in
the United States, its annual receipts being from
75 to $100,000. He, like other men in exten-
212
sive business,
must necessarily have bank ac-
commodations.
In the month of November, 1829, an article
at Washington, without the knowledge
or consent of Col. Webb, found its way into his
paper, denouncing the bank.
This was followed
by the first Message of President Jackson, in
December, 1829, also denouncing the bank.
After this (the Courier and Enquirer being a
Jackson paper,) several articles of like import
were written by Mr. Bennet, assistant editor of
the paper, which Col. Webb consented to, although they did not entirely meet his approbavi^ritten
tion.
It had been represented to Col. W. that the
bank was devoted to the interests of Mr. Clay,
he was therefore willing that it should be attacked, if that were the case, for interfering in
In February, 1831, the Legislature of
Pennsylvania, which was almost unanimous for
President Jackson, and among his warmest supporters, passed a resolution with great unanimity
which was decidedly in favour of the bank
about the same time a resolution was introduced
into the Legislature of the State of New- York,
Col. Webb went
disapproving its re-charter.
He underto Albany to oppose the measure.
stood that Senator Marcy (nov/ Governor Marcy)
Mr. Livingston, Speaker of the Assembly, and
other distinguished members of the Jackson
politics.
party,
were also opposed to the resolution, for
it might produce a collision between.
fear that
213
New- York and Pennsylvania. It
was then recommended to Col. Webb to adthe States of
vocate a modified re-charter.
The Courier and Enquirer, from that time,
advocated the re-chartering of the bank: in
consequence of which, as the editor supposes,
he was not only refused his usual accommodations at the city banks, varying from 15 to
$30,000, but was required to pay up what was
Thus situated, he
then due these institutions.
applied in August following (five months after
he had been advocating the re-chartering of the
bank), to Walter Bowne, mayor of the city of
New-York, a former government director of the
bank, a man of wealth, of high character, and at
the head of the Jackson party, and expressed a
wish to obtain accommodations at the United
States Bank.
Mr. Bowne gave him a letter of
introduction to Mr. Biddle, president of the
bank. Col. W. called on Mr. Biddle, and exhibited a full statement of his affairs
upon
which, and upon the strength of the letter from
Mr. Bowne, the bank discounted his note, endorsed by M. M. Noah, for $20,000, payable at
six months.
When the note became due, $2000
were paid, and a new note given for the balance,
payable at six months. On the 16th December
following, another accommodation of $15,000
was granted to Col. W. for six months, which
was paid on the 14th of March following, three
months before it became due.
The foregoing is the length and breadth, the
\»eight and depth of the bribery story of Col.
Webb
a more foolish and silly tale was never
;
:
—
214
invented by man.
Similar loans were made by
the bank to the editors of the United States
Telegraph, the Richmond Enquirer, and the
Washington Globe, all deadly hostile to the bank/
And what are we to inter from these transactions ? are we to charge the bank with attempting to subsidize the press ? If so, we must bear
in mind that there is a quaint saying, " that it is
a poor rule that won't work both ways." Applying that rule, and we must admit that if the
loaning of money by the bank to Col. Webb
amounts to bribery, it proves too much, and the
consequence must be that, whilst the directors
of the bank were bribing him to write in their
favour, they at the same time were bribing the
editors of the United States Telegraph, the
Washington Globe, and the Richmond Enquirer,
to write against them. The charge of bribery is
the intellia contemptible electioneering trick
:
gent part of the supporters of the administration
party laugh about the charge they do not believe it, there was nothing m the whole transaction, that to a rational mind has the most distant
appearance of dishonour, either on the part of
That institution
Col. Webb or of the bank.
freely admits that " it has not presumed to proscribe the conductors of the press from their
share of the accommodations due to their capiOf tiie extent and security of
tal and industry.
these loans, the directors claim (as they very
justly say) the exclusive privilege of judging."
In the month of March, 1831, Silas E. Burrows, a wealthy merchant of New- York, obtained
a loan from the bank on the notes of Messrs.
;
215
Webb and Noah a transaction which art and
ingenuity have attempted to turn to some dishonourable account but it was fully proved before the committee of investigation, that Noah
made an application to Burrows for the loan of
a certain sum, that Burrows told him that he
thought he could obtain the amount from his
being
father, that in this he was disappointed,
a gentleman of good credit, he obtained the
amount of the bank, and paid it over to Noah,
for which he received a commission of 2^ per
cent.
Noah supposing all the time, that Burrows had received the money from his father.
So that whatever may have been the transaction, neither Noah nor Webb had any thing to
do with it.
But as respects the transaction it;
;
—
:
have read it over and over, and can find
nothing that even appears improper or dishonthe whole
ourable on the part of any one
transaction was reported to Congress by the
Committee of Investigation, just before the question of re-chartering the bank came before that
self, I
;
it is believed, was not even
hinted at in debate
nor did it, as is presumed,
produce an unfavorable impression, in the mind
of a single member.
body the transaction,
;
;
Fifteenth, This, in the view of the editor of the
New- York Evening Post was a most grievous offence; so much so, that in an editorial article, he
expressed a wish to know the names of the stockholders, that he might hold
them up
to
" public
scorn." This, it must be admitted, is the charge
Surely the time has arrived, when
of charges.
.1 is considered to be improper for a body of men,
216
whose
interests
concerned,
to
and whose interests alope are
publicly express
manner,
their
appro-
which the trust
committed to their agent, has been performed.
By the same rule, there would be equal
bation
of
the
in
propriety in the interference of the editor of the
Evening Post with the private concerns of every
individual in the community.
No matter under
what circumstances a testimonial as to the talent,
of any one, might
a merchant might give a clerk. that
had been long in his employ, and proved himself
the
trust worthy, a letter of recommendation
mistress of a family might certify to the indusand,
try and honesty of her faithful servant,
last, though not least, some scientific gentleman
might bear testimony to the ability with which
these would all be offenthis work is compiled
ces, for which the editor of the Evening Post,
might wish to know the names of the authors, that he might hold them up to " public
scorn."
Truly we have fallen on scornfril
or moral worth
integrity,
be given
;
—
—
!
times.
CONCLUSION
The compiler thinks it aot improper, before
bringing this work to a close, to frankly state
the motives that prompted him to the undertakand in the first place, he would observe,
ing
that for the last two or three years, he could
scarcely unfold an administration newspaper,
"BANK,"
without meeting, in staring capitals
" BANK," " ARISTOCRATIC INSTITU"
MONOPOLY,"
TION,"
" MONSTER," "
NICHO;
—
MONEYED
THE EMPEROR
LAS," and such
like frightful expressions.
Be-
some measure, in the common saying, that "where there is a great deal of smoke
there must be some fire," I began to think, allievipg in
though one of the early advocates of a National
Bank, that in the whole routine of the operations
of the present institution, something might be
wrong. I could not however fix upon any thing
definite tending to its crimination, and as the
principal articles in the administration papers,
20
218
were so disjointed, so disconnected, so vague,
and in a word, so full of sound and fury without any precise meaning, tliat I at last resolved
to thoroughly investigate the subject
not from
newspaper articles, but from official documents.
In this undertaking, I was favourably situated,
being one of the" Library Committee of the
American Institute, among whose collections
was every document, it is believed, in relation
to the Bank of the United States, from its first
organization in the year 1S16, to the present
;
I attentively investigated the subject for
time.
Not kngwing however but the
four months.
bank might have been guilty of some " iniquities" that were not generally known, or of which
there was no account in the Library of the
American
Institute, I
caused an advertisement
(see page ISl for a copy of the advertisement)
to be inserted in the New-York Commercial
Advertiser, and in the New-York Evening Post,
calling upon all " republicans" to furnish me
with " such well attested facts, showing the
*' iniquity" of the bank, as might be proper to be
Not one charge was
laid before the public.
In the absence, therefore, of
furnished me.
any information, additional to what I possessed,
I made a list of such charges, as appear to be
the most current, and have frankly given my
views upon each, in the preceding pages. With
these preliminary observations, the compiler
deems it proper to observe, that, after the most
thorough investigation, and the coolest and most
deliberate reflection, it is due to truth, and to
the justice of the subject, to say, that in his opi-
219
nion (and he
man
is
willing to pledge
his reputa-
nor no
other country, has ever witnessed a more useinstitution, of
ful and honourably conducted
tion as a
for the opinion), thai this,
and magnitude, than that of the Bank
of the United States.
The compiler is not personally acquainted with one uf its directors,
officers, or agents
but judging from what he
has been enabled to collect, from public documents, from conversing with several gentlemen
of different political sentiments, who have had
dealings with the bank, all of whom be r testimony to its fairness and liberality, and from other
sources, worthy of being relied on, he is led to
believe, that the bank, in the able and judicious
management of its affairs, has adopted the only
true policy of all business men which is to prolike object
;
;
mote the
as far as strict justice will
customers. By-so doing, the bank
interest,
warrant, of its
has undoubtedly promoted its own interest, and
at the same time, rendered its operations equally
advantageous to others.
Having stated the
means taken to arrive at a true and thorough
knowledife of the transactions of the bardc, and
the result of my candid and deliberate opinion
of the same, it is proper to state, that my principal object, in laying this
work before
the
com-
undeceive the people u[ion a subject, which art and corruption have been but too
assiduous, and too successful in misleading
them. Being one of the common people myself,
and feeling the importance of a correct knowmunity,
is
to
ledge, upon all affairs of a public nature, I cannot but feel a deep solicitude that all others, of
220
the
same
class should possess a like
knowledge;
may be
proper to observe, that I do
not arrogate to myself the office either of
teacher or of dictator
I profess only to be
a compiler, and it is well kno-wn that different occupations are pursued, in order to
obtain a livelihood,
that the compilation of a
work of this kind requires labour, in which all
could not, with advantage to themselves, or to
and here
it
:
.
—
I therefore
the community equally participate.
claim, and am entitled to no other appellation
than that of a " working man," (a name which I
am proud of,) and here offer my companions,
pursuing different occupations, a specimen of
I have no reason to
the fruits of my industry.
expect, that in all cases, it will be favourably
I know the unwearied pains that
have been taken, to divert the attention of the
public from the misrule of those in power, and
to fix it upon a subject, which, if not rightly
understood, is well calculated, under experienced demagogues as leaders, to inflame the passions, and cause the people to lose sight of
every other national subject. And it may be
readily imagined how difficult it is for some,
under such circumstances, however well disposed they may be to act justly upon every subject, to overcome preconceived and deep rooted prejudices, there are others, who, from
habit, from party drill, and from education,
never pretend to read any thing, or to form an
opinion upon any political subject, without first
receiving their lesson, from some champion, as
as he
as he reads, so they read,
a leader,
received,
—
—
—
221
says, so they say, and, as he thinks, so they
think.
Th«y are told that they are wonderfully
patriotic and intelligent, which they believe, and
whilst
telling
their sleeves
them
at
so,
their
leaders laugh in
and ntethinks
their credulity,
already see the bar-room circle of politithis work the subject of discussion
the chief speaker whilst over his mug of beer,
exclaiming, " It's nothing but a mess of lies"
another, " Ah, he is undoubtedly bribed by the
bank," a third, "He is one of the 'Whigs,'
and only wants to injure and abuse General
Jackson, that he and the rest of the ' Whigs'
may get an office," and a fourth, slapping
his hands, says, " PU bet ye ten dollars it aint
In answer to the two first charges, or
true."
arguments as some may call them, I can only
say, that they remind me of a very siily and
passionate woman that I once, knew, who was
frequently angry, although as I thought, very
unjustly, with her husband, and always manifested her wrath to him, by using one standing
and invariable expression, which was, "You
As to the third,
are a nasty black nigger."
they that class me politically wilK the vvbigs,
persons that have
are under a great mistake,
been acquainted with me lor years, can testify,
that I have not belonged to the political party
" Whig,"
termed " National Republican,"
Although I fully
".Jackson," or "Tory."
accord in sentiment with the wliigs ; believing
them to be a patriotic, highminded, and honourable class of men, and actuated by the same
sentiments that animated the " whigs of 76,"
that
I
cians,
and
—
—
—
20*
222
and despotic power.
In anargument, I am "opposed to
the principle of betting knowing it to be unlawful, and believing it to have an immoral
tendency still we find, that from habit, or from
to resist unlawful
swer
to the fourth
—
;
various other causes, some of our first citizens
do bet, and 1 can only say to those that may
to bet, that this work is not true, that it has
been principally compiled, and with care, from
official documents,
that if there is a single
error in it, it is either an error of the press, or
such a one as has escaped my notice. My
object has been to give the truth
and if an
wish
—
;
error has imperceptibly crept into the work, no
one would more readily acknowledge it than
myself, and no one would do more to correct it.
I do not believe that there is a single sentence,
inserted as a fact, of which I appear to be the
author, but that could be established in a court
of justice.
I would willingly testify, if lawfully
required to do so, that according to the best of
—
my knowledge and belief, every word in this
book is true. And it is due to myself to say,
that if I were satisfied, or had reasonable grounds
to suppose, that the bank had ever been guilty
of doing anything different from what w.is contemplated by the government, in framing its
charter, or if I could be satisfied that its operations had been, in anywise, injurious to community, no one would go further than I would,
—
to put down such an institution
but I honestly
believe the contrary
I believe that a set of political gamblers, finding that they could not compel the bank, in its operations, to subserve their
—
223
selfish purposes,
have determined
to exercise the
influence which ofTicial stations give them, to
crush it. The officers of the bank however,
like faithful sentinels at their posts, have protected the property and interests of those who
committed them to their care, for which the
tocsin of
war upon the
institution
is
sounded
Louisiana.
And whose interest,
let it be asked, is to be affected ? who is to be
Not
injured in consequence of this crusade ?
Nicholas Biddle, the president of the bank he
can do a business that, in a pecuniary point of
view would be as profitable to himself as that
Not the direcof being president of the bank.
tors, for if the bank were to go down, they
would be relieved from arduous duties, for
which they do not receive one cent's pecuniary
not the rich lords of Europe,
compensation
nor the heavy stockholders in the United States
if they were to lose something on account of
paying a high price for their stock, they could
afford it; and many of them, being active business men, could probably turn their money to
as good an account in some other business
those that
with which they are acquainted
actually would suffe.r, are the widow and orphan
that class who know nothing about the specula,
tions and diversions of money from one object
to another
that class whose funds are vested in
the stock of a safe institution, at a high premium, under the implied faith, at least, of the
nation: this is the class of persons whose interest is to be disturbed
this is the class who are
to reap the fruits of the course pursued by the
from Maine
to
—
;
:
:
—
—
224
men
As to the re-cliartcring of the
in power.
present bank, that will be a question for the deI will hazard no opinion
cision of Congress.
upon it, but I will hazard the opinion, that a similar institution will be established
the nation will
demand it and those that are now proclaiming
their opposition to any National Bank, will, as
in numerous other instances, be compelled to
deny that they were ever opposed to one, or
to say that the condition of the country has
—
—
changed.
THE END.
INDEX.
A.
PAGE
An
act to incorporate the subscribers to the
Bank
109 to 170
of the United States
.
relating to the right of voting for directors 174 to 177
.
B.
Bank
America
of North
want
of,
1 to
M.
Messages of President Jackson
'31,
upon
2
2
under confederation
in 1829, '30,
the subject of the present
UnitedStates
Bank
and
of the
79 to
,
81
106 to 107
Veto, substance of
Veto, extract from, in relation to foreign
stockholder?, with remarks by the compiler.
.
.
.
130 to 135
Modifications proposed in Congress to the present
bank charter
98 to 104
O.
Opinion (substance) of
Thomas
Jefferson, 1791,
upon the constitutional right of Congress
to es-
bank
tablish a national
18 to
21
21 to
30
41 to
43
of the Secretary of the Treasury, 1791,
upon the same subject
of George Clinton, Vice-President, upon
the same subject
of James Madison, Ex-President of the
United States
Objections,
tions to
list of,
291 to 294
against the bank, with direc-
an answer
to the
same.
.
.'.
.
181 to 183
226
p.
PAGE
Proceedings
in the
sentatives, 1791,
Senate and House of Repre-
upon the question of
ing a national bank, including
establish-
substance of
tlie
most distinguished members
the debates of the
ofCongress
11 to
1810 and
re-chartering
Bank
then
the
18
upon the question
'11,
of the United
32to 47
States
1832,
chartering the
upon the question of
present
Bank
re-
United
of the
86 to 106
States
R.
Report (abstract) of the
Treasury, December
first
13, 1790,
Secretary of the
upon the subject
of a national bank
up
in
3 to
11
33 to
37
46 to
78
81 to
86
97 to
9S
Mr. Gallatin (abstract) 1809,
the subject of renewing the then charter
of the
Bank
of the United States
of the Committee of
Means, April
present
..
Bank
13, 1830,
Ways and
upon the subject of the
of the United States
of Mr. BI'Lane, Secretar}' of
..
the Treasury,
December
7,
1831,
ject of re-chartering the present
upon
the sub-
Bank
of the
United States
the
Committee (substance
of) appointed
by the House of Representatives, 1832,
tigate the affairs of the bank
Remarks
to inves-
of the compiler as to the currency from
55
1813 to 1818
dent's
upon that part of the
Veto Message relating to foreign
holders
Removal
Presi-
stock-
•.
130 to 135
of the deposit^, facts in relation thereto,
and remarks by the compiler
137 to 154
227
s.
PAGE
Scire facias, right of the President to sue out, and
remarks upon the same by the compiler
New-York,
and consummation
Safety fund, system
gress,
of,
168 to 169
its origin,
pro67 to
72
40 to
41
Yeas and Nays.
In the Senate, to incorporate the bank of 1791,
(not given).'
1811, on the question of renew-
ing the charter of 1 791
^
..
on the passage of the
..
bill
incor-
173
porating the present bank, 1816
on the question, 1832,
bank of the United States
ter the present
House of
fn the
the
to re-char-
101
Representatives, to incorporate
bank of 1791
16 to
18
on incorporating the present bank,
170 to 172
1816
on the question, 1832,
ter the present
Bank
to re-char-
of the United States
104 to 105
ERRATA.
Page
43, line 21, for
Crawford.
H. Wm. Crawjord,
read
Wm. H.
University of Toronto
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