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2Sd C O N G R E S S ,
IsJ Session.

£ lxep. N o . 2G3. ]

PAYMENT

OF

H o . OF R B P S

VRNSIONEKS.

[ T o accompany bill H. 11. No. 299.]

F E B R U A R Y 11,

1834.

M r . P O I , K , from the Committee of W a y s ami M e a n s , made the following

REPORT:
The Committee of FFays and J\Iean$. to which ivas referred the .message of
the President of the United Sttu^v, ff the-4 th of February* 1C34. ivith
the accompanying
documents* cojnutn:eieaiiag -t-* Congress the refusal
tf
the Bank of tlie f"uUcl Stiiies in deliver over, on the 01 der x)f the "Secretary
of T a r , i)te books, pa/:ris. and funds cuttnected tvith the thshnrsements to
be made render t/^ u(-t of June. 7, Jo32> <?nti\ttetl ?- J.ht act supplementary
to
the act for the^elitf
of certain sit:~yl*vnig: ^ffzrxfs and soldiers of the revolution,9'
reports
T h a t t h e y h a v e s i v e i i ' l o t h e subject all the. consideration w h i c h its i m portance d e m a n d s , as w e l l from /t& intrinsic c h u i a c t e r , as from t h e class of
most meritorious p e r s o n s , w h o s e i n t e r e s t s m a y b e affected b y the d e l a y
w h i c h m a y t a k e place in t h e p a y m e n t of t h e sums r e s p e c t i v e l y d u e to
t h e m , in c o n s e q u e n c e of the, refusal .of ; .the B a n k of t h e U n i t e d S t a t e s to
d e l i v e r o v e r t h e funds h e r c t o ' o i c t / r6y df!d *»y J a w for t h e i r p a y m e n t , t o g e t h e r with the book? am 1 papers* l o n n t t t a d \\ itV its d i s b u r s e m e n t .
T h e B a n k , b y tho a p p o i n t m e n t of t h e S e c r e t a r y oi\ W a r , h a s h e r e t o f o r e
b e e n the disbursing r.gent of t h e G o v e r n m e n t , undtvr the act of J u n e 7 ,
1832, " f o r the *\*l^f of t e r t a i n ( su^vjvinj^ officers and soldiers of t h e r e v o l u t i o n . " lYi .ordinary c i r c u i \ ? u i n s ^ s hR* disbursing offiqe*v* a r e r e s p o n sible for t h e flithful performance of the duty assigned t h e m , and a r e
r e m o v a b l e ' )xy t h e E x e c u t i v e . . T h i s , eoatrnl c v a r t h e m has b e e n d e e m e d
essential to t h e corre* t perfo? m i n c e pf >beir ,d»ny, az w e l l as to t h e j u s t
s e c u r i t y of the public interests* T h e B a n k , h o w e v e r , u n d e r t h e act of
J u n e 7, 1 8 3 2 , claims to b e t h e d i s b u r s i n g officer of t h e G o v e r n m e n t , i n d e p e n d e n t of t h e a p p o i n t m e n t of t h e E x e c u t i v e , to hold t h e office b y
l a w , and to b e b e y o n d the p o w e r of r e m o v a l by t h e E x e c u t i v e a u t h o r i t y .
S u c h a claim, to b e s u p p o r t e d , should b e clearly e s t a b l i s h e d , as it is at
v a r i a n c e w i t h t h e g e n e r a l principles of t h e constitution and l a w s .
T h e c o m m i t t e e , on an e x a m i n a t i o n of the d o c u m e n t s a c c o m p a n y i n g
t h e P r e s i d e n t s m e s s a g e , find that an o r d e r w a s given by t h e C o m m i s sioner of P e n s i o n s , w h i c h o r d e r w a s a u t h o r i z e d by t h e S e c r e t a r y of W a r ,
for r e m o v i n g from t h e B a n k of t h e U n i t e d States a n d its b r a n c h e s t o t h e
local b a n k s of d e p o s i t e , at p l a c e s w h e r e such local b a n k s h a d b e e n s e l e c t e d ,
t h e b o o k s , p a p e r s , and funds r e l a t i n g to t h e e x e c u t i o n of t h e act of J u n e



2

[ Hep. No. 2G3. ]

7 1832. With this requisition the Bank has declined a compliance, on
the around that the Bank is constituted by law the agent for making
payments under the act of 1832, and that the Secretary of W a r has consequently no right to transfer these duties to any other agent.
T h e question is, therefore, one of authority between one of the d e partments of the Government and the Bank of the United States, in which
the Bank has undertaken to retain the money and other property of t h e
Government, until some measure, legislative or judicial, can be adopted >
whereby the authority of the Kxecutive over the public money and property, and the right claimed by the Bank to retain them, can be determined, and provision made for their ultimate disposition.
T h e committee are of opinion that the Bank has taken a position, and
set up a claim to the possession of the funds, books, and papers in question, which cannot be supported. T h e opinion]of the Attorney General,
communicated by the President, contains a history of the agency of t h e
Bank in the payment of pensions, and of claims under the act of 1832, and
also a full, and, as the committee think, a correct view of the law of the
case- T o this opinion they refer v a5 greatly diminishing their labors on
this part of the subject/ H\& oofc^ord that by various legislative enactments, direct ?;nd irfdifefct, the Bank was constituted the disbursing agent
for paying invalid and revolutionary pensioners 1 }?\ior to and under the
act of March 18, 181 H. .TI19 Sf-cr^Uiyy of War has ^iven no directions
for the change of this agency , and u»« J^ank remains as it was, the disbursing officer for the payment of pensions under these ^aws. But the
case is otherwise U!H\OI\ tliQt^ictflof June ,7, 1ST>2. Under that act the
Bank was not, by.the^e/wser any fair-construction of the law, constituted
the disbursing agent for paying the annuities which it granted. That
act is supplementary to the act " for the relief of certain officers and
soldiers of the army of the revolution," passed May 15, 1828. T h e s e
two acts form parts of the same system. T h e act of 1832 has reference
to that of 1828, and the phr'iJbe^Ioacy*Vif' both is nearly identical. T h e y
provide for making paj*i refits to* I'he siuVivihg officers and soldiers of the
revolutionary armyvlr consideration of serviced, i*nd the sums to be paid
are denominated p'ay 'J and before any payments, can be "majde under either
of these laws, if the person^ chfiniiog* their benefit are Jdre^uly receiving
pensions imclcr former laws, s&eh pensions ; re required *,o bo relinquished* JVO wounds are required to entitle a man to this i,f.monthly
pay^
as they arc, agreeably tt# i k e , system of the invalid pension laws ; nor is
poverty essential to this r.id, *s,,ti y* uglier th^i.;*c*s of March 18, 1818,
and the t\ct of May I, J8.\J0, supplementary thereto. But the whole claim
seems to be placed 73 the ground of services, and, in consideration of
on
u
them, the annuity
is ^iven and received. T h e execution of both
these acts was confided to the Secretary of the Treasury, and that officer
was authorised to cause the payments to be made at such times and
places as he thought proper. T h e act of 1828 provides " t h a t the pay
allowed by tins act shall, under the direction of the Secretary of the
Treasury, be paid to the officer or soldier entitled thereto, or to their authorized attorney, at such places and days as said Secretary may directs**
T h e act of 1832 pz-ovides " that the pay allowed by this act shall, u n d e r
the direction of the Secretary of the Treasury, be paid to the officer,
non-commissioned officer, musician, or private entitled thereto, or his o r




[ Rep. No. 2(33. ]

3

their authorized a t t o r n e y , at sttch places and times as the Secretary of the
Treasury may directs
A n d both acts contain a p e r m a n e n t appropriation of the sums necessary to carry them into effect, T h e Secretary of
t h e T r e a s u r y , u n d e r the authority given b y t h e act of 1828, has caused
the payments to be m a d e at the T r e a s u r y directly to t h e individuals entitled- T h e B a n k n e v e r had any agency w h a t e v e r u n d e r tins law, nor is it
k n o w n to t h e committee that they ever interposed any claim to m a k e
these payments. It is very clear that if the p a y m e n t s u n d e r the act of
1828 could b e m a d e at the T r e a s u r y , or ai such o t h e r place as the S e cretary of t h e T r e a s u r y might direct, without t h e intervention of the
B a n k as the disbursing agent, so could the p a y m e n t s under the act of
1832 be made in like m a n n e r , had the execution of the act of 1S32 r e mained with the S e c r e t a r y of the T r e a s u r y . T h e execution of this act
w a s , h o w e v e r , by a joint resolution of J u n e 2S, 1832, devolved upon t h e
S e c r e t a r y of W a r , and the duties which the act required to be performed
b y t h e Secretary of the T r e a s u r y w e r e cc transferred to the S e c r e t a r y of
\ V a r . " T h e S e c r e t a r y of W a r w a s , by this resolution, clothed with t h e
same authority to m a k e payments to those entitled u n d e r the act of 1832,
at such times and places as h e might direct, as was previously possessed
b y the Secretary of the T r e a s u r y . In w h a t e v e r m o d e t h e p a y m e n t s
could have b e e n made by the T r e a s u r y D e p a r t m e n t previous to the adoption of the resolution of J u n e 28, 1S32, in the same mode they can b e
m a d e at the W a r D e p a r t m e n t after the adoptioncc of that resolution.
The
w h o l e business then w a s to be done under the d i r e c t i o n " of the S e c r e tary of W a r , and the payments made at such " times and places" as h e
may direct. It will not be disputed that the words of the law confer
upon the Secretary of W a r a general supervisory authority over the p a y m e n t s to b e made tinder it. T h e y authorize the p a y m e n t s to be m a d e
w h e n s o e v e r , w h e r e s o e v e r , and by w h o m s e v c r the Secretary may direct.
If t h e Secretary w e r e to direct the payments to be made at the T r e a s u r y ,
( a s by t h e law h e has a clear right to do,) it surely cannot be maintained
that an agent of the B a n k must stand by to r e c e i v e the m o n e y , and pass
it over to those entitled. It surely cannot be contended that the money
is not properly disbursed, unless it first pass through the hands of the
B a n k . If the S e c r e t a r y of W a r thinks the convenience of those entitled
to pay u n d e r this act, or the public interests, require that places of paym e n t should b e designated w h e r e there are no branches of the United
S t a t e s B a n k , may the B a n k , by refusing to establish an agency at such
p l a c e s , ( a n d t h e r e is no law requiring them to do so,) defeat the contemplated a r r a n g e m e n t ? It appears to the committee that the p o w e r
confided to the S e c r e t a r y of W a r to designate times and places of p a y m e n t necessarily includes the authority to select the persons who are to
act as agents in m a k i n g the p a y m e n t s , as, without such authority, t h e
p o w e r to direct the times and places of p a y m e n t would b e wholly nugatory.
T h e committee are of opinion that upon no correct principles can the
B a n k claim the legal right to m a k e these p a y m e n t s , either in their char a c t e r of commissioners of loatis, or as disbursing agents of the G o v e r n m e n t - T h e charter does not 'confer on the B a n k the right of b e i n g in all
c a s e s t h e agent for the. p a y m e n t of pensions. \t r e s e r v e s to C o n g r e s s t h a
p o w e r to impose on the B a n k t h e duty w h i c h w^s before performed b y



4

[ Rep. No. 203. ]

the commissioners of loans ; and as those commissioners, at the date o f
the B a n k charter, performed the duties of agents for paying the invalid
pensions, the reservation in the charter authorized Congress to impose
that duty on the B a n k . But Congress may, or may not, at its own plea*
s u r e , exercise the p o w e r it has thus reserved. T h e B a n k can have no
right to demand its exercise- T h e charter, therefore, in this respect, confers no right on the B a n k . It merely reserves to Congress the p o w e r ta
impose a duty, and t h e duty of the Bank in this particular cannot h e
more extensive than the laws passed subsequently to the charter shall b e
found to require of it.
T h e act of the 3d of M a r c h , 1817, made it the duty of the B a n k t o
pay as agent the pensions which before that time were paid by the commissioners of loans ; hut it does not require that all pensions afterwards
created shall h e paid in like manner by the B a n k . Its provisions a r e
expressly confined to the duties which w e r e then performed by the commissioners of loans, and no allusion is made in the law to pensions w h i c h
may afterwards be created.
T h e act of 1818 directs the pensions which it gave to be paid in t h e
same manner as pensions to invalids had before that time b e e n p a i d ;
and it is by virtue of this provision that the B a n k pays the p e n s i o n e r s
u n d e r this law. But this act, like that of 1817, makes no general provision on the subject of paying pensions. It directs the manner in w h i c h
the particular pensions it created should be paid, but it does n o t h i n g
more.
From this statement, it appears that the duty of pension agent h a s
b e e n imposed on the Bank by law, in those cases w h e r e the p e n s i o n s
w e r e given by the act of 1818, or by some previous act of Congress. B u t
it is not the duty of the Bank to act as pension agent, in relation to p e n sions created since the law of 1818, unless some subsequent act of C o n gress has imposed that duty on it.
If, then, it be assumed that the payments under the act of 1832 a r e
to be regarded as pensions, yet the Bank would not be bound to take u p o n
itself that duty, unless it was required of it by act of Congress. F o r it is
not enough that new pensions are c r e a t e d ; there must also be some l a w
directing the Bank to act as agent in paying them, otherwise the B a n k
can be nothing more than a voluntary agent, and at liberty, therefore, t o
surrender their trust w h e n e v e r they think proper.
But there is no pretence that the law or resolution of 1832 contains
any direction that the Bank should act as agent in paying these claims.
T h e r e is no reference in the law to any former act of Congress, from
which such an intention can be inferred, even by the most strained a n d
forced construction. A n d , therefore, if these payments
be considered
pensions^ in the legal sense in which the word is used in the acts of C o n gress, yet the duty of paying them has not been imposed on the B a n k ,
and they were not bound to perform the duty, unless they supposed it t o
be to their interest to do so.
T h e r e is another point of view in which the subject presents itself,
and which it is believed is still more important, and that is, the attitude a s sumed by the B a n k . T h e y do not claim the books, papers, and funds a s
belonging to them ; these are confessedly the property of the G o v e r n m e n t ,
But they claim the right to retain the possession of t h e m , not from a n y



[ Rep. No. 263. J

5

i n t e r e s t w h i c h t h e y h a v e in them, for this is disavowed, but m e r e l y that
t h e y may take care that the laws he faithfully executed- T h i s is cert a i n l y a novel p r e t e n s i o n , and it is believed is n o w for t h e first time ass e r t e d — b y a corporation, at least, in the U n i t e d States. B y the constit u t i o n , t h e e x e c u t i o n of the laws is confided to t h e E x e c u t i v e .
T h e allegation of t h e B a n k , as contained in the letter of the P r e s i d e n t
of the B a n k , of J a n u a r y 2 3 , 1834, that tC it is no justification to t h e B a n k
to o b e y any o t h e r authority," ( t h a n Congress,) " f o r , if it pays m o n e y , or
transfers m o n e y , without the authority of Congress, its accounts may
b e disallowed by the accounting officers," does not, in the opinion of
t h e committee, d e s e r v e to be seriously considered or refuted. It is impossible to conceive upon what grounds such an apprehension as is h e r e
p r e t e n d e d could b e seriously entertained : for w h a t e v e r authority t h e
B a n k had to disburse the annuities u n d e r the act of J u n e 7, 1832, w a s
d e r i v e d not from Congress, for the act directs the payments to be m a d e
"under the direction of the Secretary,"but,
from their appointment as paying
a g e n t , by the Secretary of W a r ; and if lie gave the authority, it would be
s t r a n g e , i n d e e d , if he could not r e v o k e it, T h e public money had b e e n
p l a c e d in the hands of the Bank by the order of the Secretary of W a r ;
and if h e makes that order, and directs the money to be r e t u r n e d to t h e
T r e a s u r y , or transferred to other agents, it is absurd to suppose that the
B a n k , by obeying, should be in any way embarrassed in the settlement of
t h e i r accounts. T h e r e was not the slightest ground for such a belief, and
it c a n n o t therefore be urged as any extenuation or apology for the course
of t h e B a n k ,
I n n o view of the subject can the B a n k , in the opinion of the committ e e , rightfully retain possession of t h e money and property of t h e Gov e r n m e n t . If t h e law of 1332 had constituted the B a n k ( w h i c h the
c o m m i t t e e do not concede, but on the contrary maintain it did n o t ) t h e
p a y i n g agent of the G o v e r n m e n t , it would not necessarily follow that they
m u s t k e e p possession of these books, p a p e r s , and funds. M a n y cases
m i g h t b e conceived in which it would be not o n l y p r o p e r , but the duty
of t h e G o v e r n m e n t , to resume the possession of them. T h e books and
p a p e r s might be w a n t e d for copying, examination, or correction, or other
c o n c e i v a b l e p u r p o s e s . T h e money appropriated for these p a y m e n t s ,
m i g h t b e accumulated in an unnecessary d e g r e e at a given point, and
m i g h t b e wanted e l s e w h e r e , in consequence of a diminished supply at
o t h e r "places"
designated by the S e c r e t a r y for the paymentsBut
t h e ground t a k e n by the B a n k excludes all possibility of the exercise of
this supervisory regulation of the head of the d e p a r t m e n t , whose duty
t h e l a w m a k e s it to see that the " p<*y^ allowed by the act, shall be
m a d e u n d e r his " direction,"
and at such " times and places'* as h e m a y
d e s i g n a t e . T h e B a n k in effect says, w e have decided that w e are t h e
p r o p e r agents to make the p a y m e n t s , and, therefore, the G o v e r n m e n t
shall in n o case h a v e any p o w e r to w i t h d r a w t h e p r o p e r t y w h i c h it has
heretofore placed in our possession* Such a principle, if applied to all
o t h e r cases of disbursing officers, who may assume the ground that they
h a v e b e e n illegally dealt with, would lead to consequences which do not
r e q u i r e to b e stated, and could not for a moment b e tolerated.
If t h e B a n k , w h e n the demand was made for the books, p a p e r s , and
m o n e y of t h e G o v e r n m e n t , in its possession, had <c p r o t e s t e d " if t h e y



6

[ Rep. No. 263. ]

thought the demand illegal, and had then delivered them up, and had afterw a r d s appealed to Congress or the judicial tribunals for such r e d r e s s o r
decision as the nature of the case might call for, their position w o u l d
h a v e b e e n far different from what it now is. Assuming to decide t h e
law for themselves, and arrogating the p o w e r to see that the laws b e
faithfully executed, they assume a power heretofore unknown to o u r
laws and institutions. Claiming to define their own legal rights, t h e y
have so far forgotten the rights of the public as to withhold vouchers a n d
funds to which they can have no title.
It further appears to t h e committee that the change directed to b e
made by the Secretary of W a r was called for by the circumstances. It
is understood that the change has been confined to a substitution of t h e
local banks of deposite for the Bank of the United States and its b r a n c h e s ,
at those places w h e r e local banks of deposite have b e e n selected. W h e r e
the public funds are yet deposited in the branches of the United States
B a n k , those branches arc yet the agents for making the payments, b y appointment of the Secretary of War, under the act of J u n e 7, 1S32.
W h e r e the change has been made, the business is to b e done by the n e w
agency, without any charge w h a t e v e r to the Government.
T h e reason and propriety, therefore, of the measure are obvious. T h e
object is to direct the banks holding the public money to pay out this
money to persons claiming it under the act of J u n e 7, 1832, instead of
having the funds drawn from these banks, and placed in the United States
B a n k and its branches, for the mere purpose of doing what the former
may do a s well. T o h a v e continued the agency of the B a n k of t h e
United States in making these payments, w h e n the public moneys w e r e
in other b a n k s , would have b e e n unnecessarily to put it in the p o w e r of
the B a n k of the United States, by means of the public funds, to d r a w
large amounts of specie, from time to time, from the selected b a n k s , to
hoard in its own vaults, thereby to increase, for its own purposes, a need*
less and unjustifiable pressure on the people.
It remains to be considered what effect this unwarrantable act of t h e
B a n k may have upon the future payments to be made to the officers and
soldiers entitled to the benefits of the provisions of the act of 1832,
T h e committee called upon the Secretary of W a r for information on
tilts point, and h e r e w i t h submit the answer which has b e e n r e c e i v e d . It
appears that on the 1st of January last, the B a n k , as disbursing a g e n t for
the p a y m e n t of claims under the act of J u n e 7, 1832, held, of public moneys drawn from the T r e a s u r y for this object, the sum of $470,546 98*
Since then, other payments to a comparatively small amount may have b e e n
made, and it is possible that subsequent settlements may further r e d u c e
this balance. T h i s sum had b e e n regularly drawn from the T r e a s u r y by
warrants in the usual way, and placed in the possession of the B a n k t o be
disbursed. T h e act of 1832 makes a standing appropriation of the amount
necessary to carry its provisions into effect. T h e B a n k , by withholding
the sum which it has in possession, stands in the situation of any o t h e r
defaulting disbursing agent, and a sum equal to that which it thus w r o n g fully retains, must be drawn from the T r e a s u r y , and applied to t h e p a y m e n t s , until the amount withheld by it shall be recovered. T h e d e t e n tion of t h e books and papers by the B a n k will not necessarily p o s t p o n e
t h e payments until the possession of such books and papers may b e r e 


f Rep. No. 2G3. J

7

c o v e r e d from t h e B a n k , but it will r e n d e r it n e c e s s a r y for t h e D e p a r t m e n t
of W a r to m a k e out n e w lists of those entitled to pay, and t h e r e is no
probability that this can b e done stifficiently early to e n a b l e the p a y m e n t s
u n d e r the act of J u n e 7, 1832, to be made on t h e 4th of M a r c h n e x t , especially at t h e distant agencies, agreeably to t h e established usage. T h e
labor of p r e p a r i n g n e w lists and papers is understood to b e g r e a t , and,
w i t h all the care that can be t a k e n , t h e r e will be a liability to e r r o r , in
m a n y cases, until t h e p r e s e n t agents settle t h e i r accounts, resulting from
t h e u n c e r t a i n t y of the periods to which t h e p a y m e n t s may h a v e b e e n
made* B u t as no surviving claimants h a v e b e e n paid to a period later
t h a n t h e 4th of S e p t e m b e r last, all w h o are n o w living may be paid on
t h e 4th of M a r c h , for the half y e a r e n d i n g at that time.
If any i n c o n v e n i e n c e should be felt by any of those v e t e r a n s of the r e volution, as t h e committee believe it will be b y all by t h e delay w h i c h
will take place in t h e p a y m e n t of t h e next annuity d u e to them, it is to b e
attributed to the unjustifiable conduct of the B a n k in interposing to t h w a r t
t h e v i e w s of G o v e r n m e n t , in withholding from the officers of G o v e r n m e n t the public m o n e y and public p r o p e r t y , to which they do not p r e t e n d to have any claim. T h e committee cannot condemn in terms too
strong the conduct of t h e B a n k in this transaction. T h e B a n k withholds
from t h e public service the large sum of four h u n d r e d and seventy thousand five h u n d r e d and forty-six dollars and ninety-eight cents, and thus
p u t s t h e G o v e r n m e n t to the inconvenience of applying other funds to t h e
objects for w h i c h t h e sum they retain was appropriated and d r a w n from
the Treasury,
So far as respects the delivery of the public property in their possession, they refuse to obey the instructions issued ; but, so far as r e s p e c t s
t h e termination of the duty of making payments, they yield a r e a d y acq u i e s c e n c e , and yet t h e r e is the some authority for the one o r d e r as for
t h e o t h e r . B u t in the former case they have a direct pecuniary interest
in t h e course t h e y pursue ; in the latter, their interest is not at s t a k e , and
no o n e suffers b u t the G o v e r n m e n t , which must advance other funds to
supply the place of those illegally retained by t h e B a n k , and the v e t e r a n s
of t h e revolution, w h o must wait for the amount due to them, until t h e
n e c e s s a r y documents can be prepared to justify their p a y m e n t .
T h e existing laws a r e , in the opinion of the committee, adequate to
e n a b l e the G o v e r n m e n t to effect a recovery from the B a n k of its m o n e y
and p r o p e r t y ; a n d , therefore, they propose no measure of legislation in
this r e s p e c t . N e i t h e r is any further appropriation r e q u i r e d to supply t h e
p l a c e of t h e smn thus retained by the B a n k , for, as has been already r e m a r k e d , t h e act of J u n e 7, 1S32, m a k e s a standing appropriation of the
sums necessary to c a n y its provisions into effect* If the B a n k , or any
o t h e r disbursing agent for the p a y m e n t of these claims, b e c o m e defaulters,
and refuse to pay o v e r the public moneys placed in their hands to m a k e
such p a y m e n t s , t h e meritorious class of citizens provided for by the act
c a n n o t , o n that account, b e d e p r i v e d of their rights, though some of t h e m
m a y e x p e r i e n c e delay in r e c e i v i n g the sums d u e to t h e m , as in this case
t h e y p r o b a b l y will, in c o n s e q u e n c e of the conduct of the B a n k in w i t h h o l d i n g t h e public books and p a p e r s , b y which the exact amount of t h e i r
claims is to be a s c e r t a i n e d .
T h e committee d e e m the course of the B a n k such, in this case, as to



L Re P- N o -

8

263

* J

justify the repeal of the several provisions constituting them p e n s i o n
agents, under the invalid acts and the acts-of 1818 and 1820There
s e e m s to b e no propriety in the separation of these duties, but as o n e
may b e conveniently performed by the agents selected by the S e c r e t a r y
of W a r , so may the other- T h e r e seems to b e a propriety, too, in c o n fiding to a responsible officer of the Government the duty of m a k i n g
t h e s e payments, rather than leave it in the hands of an irresponsible c o r poration. T h e y therefore recommend this course, and report a bill a c cordingly.
D E P A R T M E N T OF W A R ,

February 6, 1 8 3 4 .
S I R : I have the honor to reply, in part, to your letter of this date, b y
transmitting a report received from the Commissioner of Pensions*
A further statement, now in preparation by the Third Auditor, w i l l b e
furnished as soon as possible. 1 will remark, h o w e v e r , that a similar
paper was prepared and sent with the President's message, and may b e
found among those papers.
V e r y respectfully, I am, sir, your obedient servant,
LEW. CASS.
Hon,

J* K.

POLK,

House of

Representatives.
WAR

DEPARTMENT,

Pension Office^ February 6, 1 8 3 4 .
S I R : In reply to the inquiry of the H o n . J. K. Polk, I have the h o n o r
to make the following report:
T h e effect of the refusal of the United States Bank to surrender t h e
possession of the books, papers, and funds, to meet payments under t h e
act of June 7, 1832, will not be to postpone the payments until t h e
books, &c. shall be recovered from the Bank, but it will reduce this office to the necessity of making out n e w lists, which will consume so m u c h
time, that the lists will not be prepared sufficiently early to reach distant
agencies by the 4th of next month, w h e n the semi-annual p a y m e n t s
should be made, in conformity with the practice which has heretofore
e x i s t e d . Funds can be drawn from the Treasury at any time for p a y i n g
pensioners under the act of June 7, 1832, and placed in the h a n d s of
the n e w l y appointed agents. T h e funds now in the hands of the U n i t e d
States Bank and its branches, for paying pensioners under the act of
1832, w e r e drawn from the Treasury by warrants under the standing
appropriation which that law makes. I cannot furnish so particular a
statement showing the amount of funds set apart for paying p e n s i o n e r s
under this law as is desirable, but the Third Auditor can give s u c h a
statement, and I would respcctftilly suggest the propriety of requiring
the necessary information from that officer.
I have the honor to b e ,
V e r y respectfully,
Your obedient servant,
J. L . E D W A R D S .



[ Rep. No. 263. ]

9

P . S. It is p r o p e r for me to add, that w e shall not be able to ascertain in many cases to what time the pensioners have been paid, until the
former agents settle their accounts at the end of the first quarter of the
p r e s e n t y e a r ; but as none have b e e n paid to a period later than the 4th
of last S e p t e m b e r , all who are now surviving may be paid on the 4th
M a r c h , for the half y e a r ending at that timeJ. L. E .
Hon* L E W I S C A S S ,
Secretary of War.

T h e Secretary of W a r has the honor to enclose the statement p r e p a r e d by the T h i r d Auditor in relation to pension funds, which was
p r o m i s e d to the Hon* M r . Polk, in a note of the 6th instant.
W A R D E P A R T M E N T , February 7\ 1S3-1.

TREASURY

DEPARTMENT,

Third Auditor's
Office, 1th February, 1834.
S I R : I have the honor to hand you, enclosed, agreeably to your r e q u e s t , a copy of a " cstatement of balances on hand on the 1st J a n u a r y ,
1834, on account of pensions under the act of 7th J u n e , 1832,' as app e a r s from the accounts of the agents, as far as they have been r e n d e r e d
to that d a t e , " the original of which was furnished to Mr, E d w a r d s , Commissioner of Pensions, on the 3d instant, for the P r e s i d e n t of the United
States.
It is proper to add, that two accounts were accidentally omitted in the
s t a t e m e n t above mentioned, vizB a n k of the United States, Washington city
- $7,957 68
Do
do
Portland, Maine
- 35,596 85
A n d since the statement was furnished, the account of the B a n k of the
U n i t e d States at Boston has been received, exhibiting a balance on hand
t h e 1st of J a n u a r y , 1834, of $36,731 52T h e letter of t h a J l o n . J- K. Polk is herewith r e t u r n e d .
W i t h great respect, your most obedient servant,
PETER HAGNER,
Auditor.
The

Hon.

LEWIS CASS,

Secretary

of

War-

Statement of balances on hand on the 1st of January, 1834, on account
qf tc pensions under the act of1th June, 1 8 3 2 , " as appears from the accounts of the agents, as far as they have been rendered to that date.
Burlington, Vt., u n d e r act of 7th J u n e , 1832,
$22,930 96
C h a r l e s t o n , S. C.
' 13,637 7 5
Nashville, Tenn.
13,096 30
Baltimore, Md.
30,970 50
Cincinnati, O*
42,819 13



[ Rep. No. 263. j

10

22,9fO 26
Providence, R . I .
44,693 27
Hartford, Conn.
31,723 5 3
Lexington, Ky.
8,947 13
Corydon, Ind.
Mobile, Ala.
13,280 69
Utica, N. Y.
11,649 65
Savannah, C e o .
12,792 25
24,749 26
F a y e t t c v i l l e , JN\ C .
Jonesborough, T c n n .
1,807 51
Richmond, Va.
41,585 24
C a r m i , 111.
7,492 m
Detroit, M . T .
5,628 91
Newcastle, Del.
5,956 53
N e w O r l e a n s , I , a . ( t o 4 t h D e c e m b e r , 1833)
6,536 00
Buffalo, N . Y.
1,523 37
T h e foregoing accounts w e r e r e c e i v e d u p to t h e 1st F e b r u a r y ; the
following h a v e since b e e n r e c e i v e d :
Knoxville, T c n n .
4 , 6 7 4 67
Philadelphia, P a .
2 9 , 3 3 0 66
P o r t s m o u t h , N . IT.
2 7 , 5 5 5 48
T h e account of t h e a g e n t at Boston, a n d t h e v o u c h e r s for paj^inent of
pensions for t h e third q u a r t e r of 1833, w e r e r e c e i v e d this m o r n i n g . T h e
a g e n t states in his l e t t e r of t h e 29th ultimo that t h e abstract, & c for th«
fourth q u a r t e r will soon b e forwarded*
TREASURY

Third

DKPARXME^T,

Auditor's

Office, February

3 , 1834.
PETER

ATTORNEY GENERAL'S

HAGNER,

OFFICE,

February 3 , 1 8 3 4 .
S I R : P u r s u a n t to y o u r directions, I h a v e carefully e x a m i n e d t h e com*
munication addressed to t h e S e c r e t a r y of W a r b y t h e P r e s i d e n t of t h e
B a n k of t h e U n i t e d States, u n d e r date of t h e 23d i|)timo, a n d , after a
brief notice of t h e circumstances w h i c h h a v e given rise to t h e q u e s t i o n s
submitted to m e , will p r o c e e d t o state m y opinion t h e r e o n .
T h e act of the 7th of J u n e , 1832, after g a m i n g t o certain officers and
Other p e r s o n s , for t h e i r services in t h e w a r of t h e revolution, t h e p a y a n d
annuities t h e r e i n p r e s c r i b e d , p r o c e e d s to enact that t h e p a y so a l l o w e d
shall, under the direction of the Secretary of the Treasury , b e paid t o the
p e r s o n s entitled t h e r e t o , at such places and times as that officer m a y dir e c t . B y a j o i n t resolution, a p p r o v e d on t h e 28th of J u n e , 1 8 3 2 , a l l t h e
duties imposed on t h e S e c r e t a r y of the T r e a s u r y b y this act w e r e t r a n s ferred to t h e S e c r e t a r y of W a r . In the~exeeution of the duties t h u s d e volved on him, the latter officer assigned to t h e P e n s i o n Office, t h e n , a n d
still, a bureau of his d e p a r t m e n t , t h e task of r e c e i v i n g , e x a m i n i n g , a n d
d e c i d i n g o n , applications for t h e benefits of this act- T h i s a r r a n g e m e n t
w a s m a d e , not b e c a u s e the l a w w a s , strictly s p e a k i n g , a pension law, h u t
b e c a u s e t h e w h o l e subject b o r e so much analogy to t h e pension s y s t e m ,



[ Rep. No. 2G3. ]

11

as t o make it p r o p e r to commit its general management to the Pension
Office.
F o r the like reason, the duty of paying those persons whose claims
w e r e duly admitted, was assigned by the Secretary of W a r to the Presid e n t s of the B a n k of the United States and of its branches, those officers
b e i n g then the disbursing agents actually employed by the Government
u n d e r the various pension laws.
W i t h the v i e w of enabling them to make the proper payments u n d e r
the act of 1832, various lists and other documents have b e e n transmitted
to t h e m from the Pension Office ; and they have also, from time to time,
b e e n p r o v i d e d with funds from the same office, by means of drafts on the
banks in which the public moneys were deposited- In this w a y , the
B a n k and its branches, or the Presidents of those institutions, have become
p o s s e s s e d of various books, vouchers, and other documents relating to
p a y m e n t s u n d e r the act referred to, and are now also in possession of a
c o n s i d e r a b l e amount of funds belonging to the Government, being the
u n e x p e n d e d balances of moneys placed in their hands in the manner and
for t h e purposes above stated.
I n the exercise of the same authority, by virtue of which he originally
c o m m i t t e d this agency to the Bank of the United States, the Secretary of
War has recently thought proper to discontinue the employment of that
institution and its branches, so far as relates to payments under the act of
J u n e 7, 1832, and has appointed in their stead certain of the State banks
lately selected as banks of deposite by the Treasury D e p a r t m e n t . In
the city of Philadelphia, the Girard Bank was appointed for this purpose ;
and, in o r d e r to carry this arrangement into effect in that city, the Commissioner of Pensions, in obedience to an order of the Secretary of W a r ,
has d i r e c t e d the President of the Bank of the United States to transfer
to the P r e s i d e n t of the Girard Bank the funds, books, and papers of the
a g e n c y , u n d e r the act of the 7th of J u n e , 1832.
W i t h this requisition, the Bank of the United States, after first ascert a i n i n g that the Commissioner of Pensions had acted under the directions
of t h e Secretary of W a r , has refused to comply, on the ground that the
requisition w a s not warranted by law, and that the Bank has not only the
right to disobey it, but is bound to do so, by its duty to Congress, and by
a d u e regard to its own safety*
T h e letter referred to me contains an
elaborate argument by the President of the Bank, in support of these positions ; and it is upon the points thus taken and defended that you have
r e q u i r e d my opinion.
I h a v e given to the whole subject, and especially to the argument
transmitted by the Bank, a mature, and, I trust, dispassionate consideration. T h e result of my investigations and reflections is a decided conviction that the order in question was fully warranted by law, and that no
valid reason has b e e n assigned for refusing to obey it.
T h e P r e s i d e n t of the B a n k admits that there is nothing in its charter
which grants or promises to that institution any agency in the payment
of pension moneys ; but he refers to various legal provisions, for the purpose of showing that Congress has devolved upon t h e B a n k , to the exclusion of e v e r y other officer or agent, the duty of paying pensions and pensioners in those States w h e r e the B a n k and its branches are established,
and has given to it the power of selecting some State bank for that pur


12

r

Re

p-

N

°-263- ]

pose, in States w h e r e there is no branch of t h e B a n k of the United S t a t e s .
A n d to prove that this agency has been so confided by positive law to t h e
B a n k of the United States, that no change can be made in it e x c e p t b y
special act of Congress, he refers to several such acts, establishing in p a r ticular places new pension agencies, and quotes from a letter of the p r e s e n t
S e c r e t a r y of W a r , u n d e r date of the 1st of March, 1832, a distinct a d mission that the W a r D e p a r t m e n t had, at that time, no authority to a p point " a pension agent in any State or Territory w h e r e the United S t a t e s
Bank has established one of its b r a n c h e s . "
T h e letter referred to me then proceeds to consider what is r e a l l y at
this time the only subject of controversy, the law of J u n e 7, 1 8 3 2 ; a n d
on the assumption that this law is a part of the pension system, and m e r e *
ly extends the benefits of that system to a n e w class of pensioners, it m a i n tains, in effect—
1st. T h a t the pensioners thus created by the act of 1832 a r e , as a m a t ter of course, to be paid by the B a n k of the United States, as the g e n e r a l
pension agent of the G o v e r n m e n t , unless the clause which declares t h a t
they shall be paid u at such places and times as the Secretary may dir e c t , " can be construed to authorize him not only to designate the p l a c e
and time of payment, but also to appoint the agent by whom such p a y ment is to b e m a d e .
2dly. T h a t the clause referred to cannot, with propriety, be so con*
strued ; and
3dly. T h a t the B a n k of the United States has, therefore, always b e e n ,
and still is, the sole agent for making payments under the law of 1832,
and can only be discharged from this employment by act of C o n g r e s s .
I have already mentioned that the Bank of the United States w a s , at
the time of the enactment of the law of 1832, the general agent for the
payment of pensions, properly so called ; and it may also be conceded, for
the purposes of the present inquiry, (although the point is b y no m e a n s
clear as to all the pension laws,) that this agency has been so conferred
on it by law, that it cannot be taken from it, except by some" n e w e x e r tion of legislative power* But after giving the B a n k the full benefit oi
this concession, I cannot yield to it the positions above maintained.
On
the contrary, I think them wholly untenable, and for the following, a m o n g
other reasons :
1st- T h e general pension agency would not embrace the payments authorized by the act of J u n e 7, 1832, even had that act contained no s p e cial provision in relation to those payments ; because it is not, properly
speaking, a p e n s i o n latv, and does not come within the legal regulations
for the payment of pensions.
I have already stated that the execution of this law was, immediately
after its passage, assigned to the Pension Office ; and that, until the r e c e n t
order of the Secretary of W a r , the general pension agents had b e e n e r a ployed to make payments under it* From these and other circumstances,
those payments have usually been spoken of by public officers and o t h e r s
as " pensions under the law of 1 8 3 2 , " and the P r e s i d e n t of the B a n k
builds his entire argument on the assumption that such is their true c h a racter, and that, as part and parcel of the pension system, they are s u b j e c t
to all the incidents of that system. In this I think it very clear that h e
has fallen into an error, probably in consequence of adopting, w i t h o u t



[ Rep. No. 2(>3. ]

13

sufficiently considering the history, character, and provisions of the law
itself, the general language usually applied to it.
T h e exposition of this error will, independently of any other consideration, be perfectly decisive of the questions referred to me. I shall therefore endeavor to place this point in its true light, though, in order to do
so, some minuteness of detail will be found to be unavoidable.
T h e first pension law passed after the organization of the Federal Government, was the act of the 29th of September, 17S9. By this act certain military pensions which had been granted by the States to invalids,
w o u n d e d or disabled during the war of the revolution, were assumed by
t h e United States for one year, and directed to be paid u tinder such regulations as the President of the United States might direct."
T h i s act
w a s continued or its place supplied by subsequent laws ; and various other
l a w s , were also, from time to time, passed by Congress, granting pensions
to invalids by name, or prescribing regulations under which persons who
might be wounded, or otherwise disabled in the public service, might entitle themselves to pensions. By some of these acts, the payments were
to be made under sucli regulations as the President might direct; by
others, and this was the more usual direction, the pensioners were to be
paid in the same manner as the invalids before placed* on the pension list.
In the mean time, the President of the United States, in pursuance of
t h e authority vested in him by some of the first laws, had directed that
t h e several commissioners of loans, in those States where such officers
existed, should be employed as agents of the Government in the payment
of pensions, and they continued to be so employed until after the organization of the Bank of the United States, In the charter of that institution, Congress reserved the right of requiring the Bank, by law, to perform the duties of commissioners of loans ; and this reserved right was
afterwards exercised by the act of the 3d of March, 1817, quoted at
length by the President of the Bank in the letter referred to me- Along
with the duties imposed on the commissioners of loans by the laws creating their offices, or supplementary thereto, the special duties of pension
agents, assigned to them by the Executive, were also transferred to the
Presidents
of the Bank and of its branches, who thus became the disbursing agents of the Government under the pension laws then in force.
T h o s e laws, up to this period, provided only for invalids ; but at the
n e x t session of Congress a large addition was made to the pension list, by
the act of the 18th of March, 1S13, which authorized the payment of
pensions to certain indigent officers and u soldiers of the revolution ; and
w h i c h declared that they should be paid in the same manner as 77
pensions
to invalids who have been placed on the pension list are notvpaid.
By
virtue of this reference to the then existing usage under the invalid pension laws, the Bank of the United States and its branches also became
the paying agent under the law of I S I S ; and as similar clauses have
b e e n inserted in the various acts since passed supplementary to that
law, and to the other pension laws, the payments under them are to be
made through the agency of the Bank, except so far as Congress shall
have authorized, by special laws, the employment of other agents. In
respect to all the laws now spoken of, it is also to_be observed that they
invariably direct that the parties entitled to the benefit of their provisions
shall be placed on the "pension list" and always speak of the moneys



14

[ Rep. No. 263. ]

gtr a n t e d as cc pensions,"
and of the persons w h o are to r e c e i v e them a s
c
pensioners ;" thus furnishing the m e a n s of distinguishing with p r e c i s i o n
those l a w s w h i c h really belong to the pension system, from those that
m e r e l y b e a r some analogy to it,
W e are n o w p r e p a r e d to look into t h e act of J u n e 7, 1832 ; and t h e
first observation w h i c h occurs is, that this act, so far from being s u p p l e *
m e n t a r y to the pension l a w s , or to any one of t h e m , is expressly d e c l a r e d
b y its title to b e s u p p l e m e n t a r y to t h e act of t h e 15th of M a y , 1828, " f o r
t h e relief of certain officers and soldiers of t h e a r m y of t h e r e v o l u t i o n . "
T h e first section also refers to that l a w , and the w h o l e act is evidently, a
m e r e extension of t h e principle established b y t h e act of 1828.
N o w t h e act of M a y 15, 1828, has no connexion w h a t e v e r w i t h t h e
g e n e r a l system of pension laws. It was the c o m m e n c e m e n t of a n o t h e r
and an entirely different system, as will b e s e e n b y referring to its p r o v i sions.
T h e first section of the act of the 15th M a y , 1 8 2 8 , is in t h e following
words :
" lie it enacted by the Senate and House of Representatives
of the
Ci
United States of America in Congress assembled^ T h a t each of t h e s u r " viving officers of the army of the revolution, in the continental l i n e ,
" w h o was entitled to half pay b y the resolve of October t w e n t y - o n e 7
" s e v e n t e e n h u n d r e d and eighty, be a u t h o r i s e d to r e c e i v e , out of a n y
" money in the T r e a s u r y not o t h e r w i s e appropriated, t h e amount of h i s
" full pay in said line, according to his r a n k in the line, to begin o n t h e
"c thir^Jgday of M a r c h , e i g h t e e n h u n d r e d and t w e n t y - s i x , and to continue d u < ring his natural life : Provided^
T h a t , u n d e r this act, no officer shall b e
" entitled to r e c e i v e a l a r g e r sum than the full pay of a captain in said l i n e , "
On t h e face of this section w e p e r c e i v e that, instead of e x t e n d i n g t h e
b o u n t y of t h e nation to a n e w class of invalids or indigent persons in t h e
form of a pension, the law m e r e l y m a k e s provision for the satisfaction of
an equitable claim on the justice of t h e G o v e r n m e n t , and carefully a v o i d s
a n y such expression as might connect it w i t h t h e system of pensions t h e n
in force- T h e like distinction is recognised in the second and fifth s e c tions ; and still more emphatically in the third, w h i c h is in t h e following
words:
" S E C . 3, And be it further enacted^ T h a t e v e r y surviving n o n - c o m ct
missioned officer, musician, o r p r i v a t e , in said a r m y , w h o enlisted t h e r e " in for and during the w a r , and continued in its service until its t e r m i cc
nation, and t h e r e b y b e c a m e entitled to r e c e i v e a r e w a r d of eighty d o l l a r s ,
" u n d e r a resolve of C o n g r e s s , passed M a y fifteen, s e v e n t e e n h u n d r e d
" and s e v e n t y - e i ^ h t , shall be entitled to r e c e i v e his full m o n t h l y
" pay in said s e r v i c e , out of any m o n e y in the T r e a s u r y not o t h e r w i s e
ct
appropriated, to begin on the third day of M a r c h , one thousand e i g h t
" h u n d r e d and t w e n t y - s i x , and to continue during his natural life : Pro" vided, T h a t no non-commissioned officer, musician, or p r i v a t e , in said
" a r m y , w h o is n o w on the pension list of the United S t a t e s , shall be en*
" titled to t h e benefits of this a c t , "
H e r e , again, it is apparent that t h e p a y m e n t s d i r e c t e d b y this s e c t i o n
a r e g r a n t e d , not as pensions gratuitously conferred, but for the p u r p o s e
of providing an equitable equivalent for the r e w a r d p r o m i s e d in t h e r e solve to w h i c h the section refers. A n d by referring to t h e d e b a t e s , a n d



[ Rep. No. 263. ]

15

o t h e r proceedings which accompanied the passage of the law, it will b e
s e e n that its enactment was advocated principally, if not exclusively, on
this ground.
T h e only remaining section, not quoted or alluded to, is the
fourth,
w h i c h is as follows :
" S E C . 4 . And he it further enacted^ T h a t the pay allowed by this act
" shall, under the direction of the Secretary of the Treasury, be paid to
" t h e officer or soldier entitled thereto, or to their authorized attorney,
ic
at such places and days as said Secretary may direct, and that no fo" r e i g n officer shall be entitled to said pay ; nor shall any officer or sol" d i e r receive the same until he furnish to said Secretary satisfactory evi" d e n c e that he is entitled to the same, in conformity to the provisions of
" this act: and the pay allowed by this act shall not in any way be trans" ferable, or liable to attachment, levy, or seizure, by any legal process
" w h a t e v e r , but shall enure wholly to the personal benefit of the officer
u
o r soldier entitled to the same by this act-"
I n this section, and, indeed, throughout the whole act, we have the
clearest indications that the pay then provided for was considered as entirely difFerent from the pensions before granted ; and that it was intende d by the Legislature to leave the selection of paying agents, if any
should become necessary, to the Secretary of the Treasury, an officer
w h o had no connexion whatever with the pension laws. T h e y do not
s a y , as had been done in the act of IS 18, that the payments should be
m a d e " in the same manner as pensions to invalids are now paid ;" nor
d o they in any manner allude to the regulations on that subject then in
force- But with full knowledge, as must be presumed, of the terms of
t h e pension laws, and of the fact that the Bank of the United States was
t h e n employed as the pension agent, they place the whole subject under
t h e direction of the Secretary of the Treasury,
T h e practical construction of the act of 1828 has, in principle and effect, corresponded in all respects with the foregoing view of its intent.
Drafts for the moneys payable under it are transmitted, under the special
direction of the Secretary of the Treasury, to the claimants at their respective residences, or are delivered at the city of Washington to their
authorized attorneys. And although the Cashier of the Branch Bank at
Washington, as one of the depositories of the public moneys, has been
employed by the Treasury Department as its agent to furnish these
drafts, and to deliver or remit them, as the case might require, yet this
w a s done by the Secretary of the Treasury, under the authority given
him by the law itself, and not upon the ground that the Bank was entit l e d to be so employed, by virtue of its general agency under the pension laws. This is evinced by the facts that this agency has been committed to the Cashier, and not to the President of the office ; that in all
transactions between him and the department he is styled an " agent for
paying claims under the act of the 15th of May, 182S," and not a pension agent; that no list or roll is kept by him containing the names of
t h e persons entitled with authority to pay on being satisfied as to the
identity and life of the party ; and that every draft furnished by him is
so furnished in obedience to a special direction given by the Secretary,
w h o not only decides on the original claim, but on every subsequent
claim for a semi-annual payment. In all these respects, the course of



16

[ R e p . No. 2(33. ]

t h e pension agency is entirely different. T h e law of 1817, by w h i c h
t h e duties t h e n performed by the commissioners of loans, including t H e
general pension agency, are transferred to the Bank of the U n i t e d
S t a t e s , expressly declares that these powers " shall be p e r f o r m e d " b y
t h e Presidents of the Bank and its branches, and that their acts shall \*&
countersigned by the Cashier ; they are styled in all transactions w i t h
t h e m under this law, " pension a g e n t s , " or " agents for p e n s i o n s , " a n d
t h e y are entrusted with the custody of the lists or pension rolls of e a c h
class of pensioners connected with their agency. W h e n a claim t o a
pension is admitted, the President of the bank, at the proper location^ i s
directed by the Pension Office to inscribe the name of the party on t h e
roll k e p t at the bank, and to pay up to the time of the last s e m i - a n n u a l
payment if the claimant should be still living, and if not, then up to t h e
day of his death. T h e duty of ascertaining the identity and life of t h e
party is thus left to the pension agent, and the same responsibility i s
committed to him in respect to all subsequent payments, which h e m a k e s
from the roll in his possession, and without any special direction f r o m
the Pension Office, so long as he is satisfied of the life of the party. T h i s
w h o l e course of proceeding recognises the distinction above stated, a n d ,
i n d e e d , is only to b e warranted by it.
On recurring to the law of 1832, the next observation to b e m a d e i s ,
that it is truly supplementary to that of 1 8 2 8 ; it proceeds on the s a m e
principle, is a part of the same system, and merely extends the policy ©f
that law to a now and larger class of persons, who are to be paid in t h e
same manner as those embraced in the former law.
T h i s will b e r e n d e r e d manifest by a comparison of its provisions w i t h
those of the act of 1828, from which some of them are copied in t e r m s
and others with such variations only as w e r e rendered necessary b y t K e
w i d e r scope of the n e w act* T h e officers and soldiers embraced w i t h i n
its provisions, like those provided for in the act of 1828, are t r e a t e d a s
having a claim on the justice of the nation, and not merely as objects o f
its bounty ; the moneys directed to be paid to them are denominated pay
and not pensions ; and those moneys are to be paid to all who have p e r formed the requisite service, w h e t h e r wounded or otherwise disabled, o r
not, and without regard to their pecuniary circumstances. T h e t h i r d
section, which is substantially a transcript of the fourth section of t h e a c t
of 1828, will furnish a sufficient illustration of this general conformity.
It is in the following words :
" S E C . 3. And be it further
enacted^ T h a t the pay allowed b y t h i s
act shall, under the direction of the Secretary of the Treasury, be paid
to the officer, non-commissioned officer, musician, or private, e n t i t l e d
t h e r e t o , or his or their authorized attorney, at such places and times as
the Secretary of the Treasury may direct^ and that no foreign officer
shall be entitled to said pay; nor shall any officer, non-commissioned
officer, musician, or private, receive the same, until he furnish the s a i d
Secretary satisfactory evidence that he is entitled to the same, in c o n formity to the provisions of this a c t ; and the pay h e r e b y allowed s h a l l
not be in any way transferable, or liable to attachment, levy, or s e i z u r e >
by any legal process whatever, but shall enure wholly to the p e r s o n a l
benefit of the officer, non-commissioned officer, musician, or soldier e n titled to the s a m e . "



[ Rep. No. 263. ]

IT

T h e two acts, then, have the same general objects, and are framed, so
far as the present question is concerned, in substantially the same words.
A n d as Congress must have known that the law of 1828 had never b e e n
e x e c u t e d by t h e pension agents, the careful manner in which they have
conformed the third section of the last law to the fourth section of the
act of 1828, is decisive to show that they intended to place the business
of making the payments authorized therein on precisely the same footing
with the like business under the former law.
T h e analogy which exists between the law of 1828 and that of 1832 is
adverted to in the communication referred to me, and an argument
against the power claimed by the Secretary of W a r under the latter law
is attempted to be derived from the course of the Treasury Department
u n d e r the former* For this purpose it is remarked, that " although the
act of May 15, 1828, gave the same power to the Secretary of the ^Treasury as the act of 1832 does, yet that officer, never, it is believed, appointed any agent, or directed any transfer of pension funds, under its
authority." This reference, it appears to me, is peculiarly unfortunate.
T h e mode in which claimants, under the act of 1828, have been paid by
t h e department, has already been explained ; and as the whole matter
w a s transacted at the seat of Government, it was unnecessary to appoint
agents or provide funds at any other place. In point of fact, however, it
is incorrect to say that the Secretary of the Treasury " n e v e r appointed
any agent under the authority" of this law. So far as any agency was
r e q u i r e d , he appointed the Cashier of the Branch Bank at Washington
to perform its duties ; and the appointment of that officer, and all the d e tails connected with the mode of payment, were not less repugnant to
t h e present claims of the Bank, than if payments had been directed to be
m a d e at places other than the seat of Government, and by agents having
no connexion with the Bank, Indeed, it is quite clear that neither the
Secretary of the Treasury nor the Bank has, at any time since the passage of the act of 1823, supposed that payments under it w e r e to be made
through the intervention of the Presidents of the Bank and its branches,
as pension agents.
T h e claim now set up under the corresponding p r o vision in the act of 1832, is, as we have seen, entirely n e w , and in direct opposition to the construction given to the same words, in 1828, by
the then Secretary of the Treasury, and by every one of his successors
since, and constantly acquiesced in by the Bank, without complaint or
remonstrance.
Without dwelling longer on the numerous particulars by which the
act of 1S32, as well as that to which it is supplementary, is to be dis^
tinguished from the pension laws embraced within the general agency
of the Bank, I think they fully warrant me in saying that these laws,
though properly enough^ in common parlance, spoken of as pension laws?
do not belong to that general agency, but are to be treated precisely as^
if no such agency had ever been created. In that case no one would
have doubted the power of the department, to which they w e r e referred,
to appoint all the agents necessary to their proper execution. E v e n ,
therefore^ if the law of 1832 hat! contained no provision in respect to
the payments to be made under it, I could not have doubted the p o w e r
of the War Department to appoint agents for that purpose, and to dismiss
or change them at its pleasure. But,



18

[ Rep. No. 263. J

Secondly. T h e act of June 7, 1832, contains an express provision in
relation to payments, which, in my judgment, vests in the Secretary of
W a r ample authority to appoint the paying agents, as well as to direct
the times and places of payment.
For the purposes of this part of the case, I shall consider the act of
1832 as a pension law, and shall concede to the Bank the agency claimed
by it^ unless it can be shown that the employment of other agents is expressly authorized by the act itself. T h e third section, which has already been quoted, appears to me to have placed the whole business of
payment, including the agency by which, and the mode in which, it is
to be made, under the control of the Secretary of the Treasury, and, as
amended by the joint resolution, of the Secretary of War.
In opposition to this view, the President of the Bank submits a labored
argument to prove that the section does not confer any such authority
o n the Secretary, because it only empowers him to direct " the places
•and times" at which the payments are to be made, which terms, it is
contended, are not to be construed to authorize the appointment of a
person to pay, but only of a place where, and a time when, to receive.
It is a fatal objection to the universality of this proposition, that, as the
power to appoint the places of payment is unlimited, the Secretary may
appoint a place at which there is no bank or other pension agent; in
which case, the power to appoint an agent to pay must necessarily exist,
-or the acknowledged power to appoint a place of payment be defeatedIn this class of cases, the power to appoint a place of payment is thus
seen to include, as incidental to it, the power of appointing an agent to
pay* And if that power be possessed in any one case, it would seem to
b e possessed in every other, unless it can be held that the same word in
this law means one thing in reference to one place, and a totally different
thing in reference to another—a construction too refined to be readily
adopted.
It is also objected that the order of the Secretary of War, appointing
the President of the Girard Bank as the paying agent, and the banking
house of that corporation as the place of payment, makes no change in
t h e place, but only in the agent, who is still to make payment in one and
rthe same place with the former agent. T h e argument by which this objection is maintained strikes me as rather plausible than solid ; and that
portion of it which undertakes to define the word "jj/aces," seems to violate the very rule of interpretation announced in the context. T h a t
w o r d , we are told, (and the remark is undoubtedly a just one,) must be
construed " in its ordinary and common sense meaning, without being
:strained from its natural construction, in order to diminish the power of
^Congress." Now, cc the banking house of the United States Bank, in
Chesnut street, Philadelphia,' 7 and cc the banking house of the Girard
Bank, Philadelphia, 5 ' are certainly, each of them, " places," within the
natural and ordinary sense of the word. I think, also, they are more
clearly "places^* within the meaning of that word, as used in this act,
than " the city of Philadelphia," or any such general designation. T h e
Legislature may reasonably be presumed to have intended a specific designation, rather than a general one, because the former is more distinct
and useful in the information it communicates, and is, moreover, usually
employed in all business transactions, when it is intended that the p a y 


I Rep. No. 263. J

19*

merit of money shall be made at a place certain. If this construction
be correct, then there has been, in this case, an attempt to change t h e
place of payment as well as to change the a g e n t ; and, as the former
p o w e r is clear, and the latter has been shown to be incidental to it, I
think t h e order was valid in both respects.
W i t h respect to the extraordinary and dangerous consequences imputed to t h e construction claimed by the War Department, the special acts
passed since the act of 1832, or now pending before Congi^ess, the former
employment of the Bank to make payments under the act in question,
or t h e terms in which that act is spoken of by the Commissioner of P e n *
sions, all which are objected, or referred to as auxiliary to the main arg u m e n t , it is sufficient to observe that the pertinency of these topics to
that argument is mainly founded on the assumption that the law of 1832
is a part of the pension system, and therefore embraced within the general pension agency of the Bank. And, as this assumption has already
b e e n shown to be erroneous, I deem it unnecessary to extend this communication by any further observations on this branch of the subject*
I n remarking on the phraseology of the third section of the act of
1832, I have thus far followed the course of argument of the President
of t h e Bank. In addition to what has already been said, it remains to
be observed that although much ingenious and labored reasoning h a s
b e e n expended, in his communication, upon the words " at such places:
and times as the Secretary may direct," yet, that other, and much m o r e
important words, in the same section, have been passed over without
r e m a r k . T h e law not only provides that the pay, allowed by it, shall b e
paid " at such places and times as the Secretary may direct," but it also
enacts that it shall be paid "under the direction of the Secretory of the
Trec&ury"
It is a sound rule in the interpretation of statutes, and i n d e e d of all written language, that such a construction should be adopted^
if it can be done without violence to the context, as will give effect to*
Gvery sentence, clause, and word. On the construction contended for
by t h e President of the Bank, no effect whatever is given to the clause
" under the direction of the Secretary of the Treasury."
T h e grammatical sense of the section will be complete without ity and so will b e
its practical effect, according to the construction of the Bank. On that
construction, then, these words are mere expletives, which are to b e
wholly disregarded. I cannot so consider them. They are found in t h e
l a w , and cannot be stricken o u t ; and, if the context will permit it, they
m u s t receive their natural and ordinary construction. This effect may
b e given to them, in the present instance, without violence to any other
p a r t of the l a w ; and it obviously is to confide the whole business of
m a k i n g payment, including the power of appointing the person by whom,
and the manner in which, it shall be made, to the head of the department.
T h i s point is so clear and palpable to my own understanding, that I
cannot think it needful to support it by argument or illustration. But, if
e i t h e r w e r e needed, they would be found in the course of the Executive
u n d e r the early pension laws- I have already had occasion to observe
that several of those laws directed the pensions to be paid " tinder such
regulations as the President of the United States shall direct." Under the
authority of these words, the first President of the United vStates directed



20

,

[ Rep. No. 283. ]

the p a y m e n t s to be made by the commissioners of loans, and, in States
w h e r e no such officers w e r e found, h e appointed other agents for the purp o s e . T h e pertinency and w e i g h t of this p r e c e d e n t are too o b v i o u s to
require remark, but it d e s e r v e s to be noticed, as a striking illustration of
t h e unsoundness of the construction I am opposing, that it is through this
very e x e r c i s e of E x e c u t i v e authority that the B a n k has itself b e c o m e the
legal agent for the payment of pension moneys- It took the a g e n c y from
the commissioners of loans, by substitution in their stead ; and those c o m missioners, as w e h a v e s e e n , derived it from an E x e c u t i v e regulation, made
under words certainly not stronger than those n o w under discussion.
T o c o n c l u d e , so far as this part of the subject, referred to m e , is conc e r n e d , the order g i v e n by the Secretary of W a r to the Commissioner of
P e n s i o n s , and through him to the P r e s i d e n t of the B a n k of the U n i t e d
States, appears t o m e to have b e e n fully warranted by l a w , and not to be
successfully impugned by the objections w h i c h have b e e n made to it. It
follows, as a n e c e s s a r y c o n s e q u e n c e , that the refusal of the B a n k , and of
its P r e s i d e n t , to comply w i t h that order, was a breach of trust, and a violation of its duty to the G o v e r n m e n t .
But the communication referred to m e presents another point, w h i e h ,
from its peculiar character, and the importance of i t s general bearings,
d e s e r v e s very grave consideration T h e B a n k , whilst it admits that it has no chartered right to b e emp l o y e d as disbursing agent under any of the pension l a w s , y e t , on the assumption that it is in the e x e c u t i o n of the acts of Congress, claims to be
considered as a public officer, and to be invested with authority to decide
o n the validity of the orders of the W a r Department. A n d the doctrine is
distinctly asserted, that the Congress of the United States, u as the common and o n l y j u d g e , " is alone competent to decide on any conflict b e t w e e n
the department and the Bank, T h e reason assigned in defence of this pretension, independently of the professed desire to perform with fidelity the
duties imposed on the Bank, i s , " that it would be no justification to it to
o b e y any other authority than that of Congress ; for if it pays m o n e y , or
transfers m o n e y , without the authority of Congress, its accounts m a y be
disallowed by the accounting officers." A n d , in support of this suggestion,
the Secretary of War is reminded that such a disallowance has already
occurred, in c o n s e q u e n c e of the o b e d i e n c e of the Bank to the instructions of
t h e Commissioner of P e n s i o n s .
I cannot agree, either to the validity of the pretension thus set u p by
the B a n k , or to the pertinency of the particular fact referred to in its
support.
If the relations w h i c h e x i s t , under the pension laws, b e t w e e n the G o v e r n m e n t and the B a n k , be of such a nature as to entitle the latter, or its
P r e s i d e n t s , to the character and consideration of public officers, it is v e r y
clear that t h e y must be regarded as holding only inferior and
subordinate
offices. T h e y are m e r e l y paymasters
of pensions / and t h e y stand in p r e c i s e l y the same relation to the Secretary of W a r — t o w h o s e department t h e
l a w s h a v e assigned the e x e c u t i o n of all the military pension l a w s , e x c e p t
that of M a y 15, 1 8 2 8 — w h i c h the ordinary paymasters of the army stand
i n to the same department. T h e claim of the B a n k , that it is authorized to
look b e y o n d the orders of the department, to w h i c h , in this respect, i t is
subordinate, and to inquire into the manner in w h i c h the head of that d e 


[ Rep. No. 263, ]

21

p a r t m e n t intends to dispose of the books, papers, and funds demanded from
t h e B a n k , is a claim which might, with equal propriety, be made by every
o t h e r paymaster, and indeed by all the disbursing agents of the Governm e n t . If this be the real character of the power asserted by the President
of t h e Bank, (and that it is so, is confidently believed,) then it can require
n o argument or reference to prove that it is utterly repugnant, not only to
our laws and constitution, but to the first principles on which Government
and society are organized.
T h e apprehension thatthe Bank, if it should comply with the present
o r d e r , might still not receive a credit at the Treasury, I cannot but think
entirely chimerical. Independently of the full and exclusive control which
t h e law has given to the Secretary of War over the disbursement of all mon e y s to be paid under the act of June 7, 1832, that officer, as the head of
t h e department to which belongs the execution of the military pension laws,
is authorized, even in reference to pension moneys, properly so called, to
w i t h d r a w from any one pension agent any portion of the pension moneys
i n his hands, either for the purpose of immediately transferring them to
another agent, or of retaining them in the custody of the department, until
it shall become necessary to disburse them. T h e s e acts must necessarily
b e subject to the responsibility, on the part of the Secretary of W a r , of
applying the moneys so withdrawn to some lawful purpose ; but his order
is a n ample voucher and indemnity to the agent who, in obedience to it,
h a s made the payment it requires- This is a principle which is constantly
a c t e d on at the Treasury, especially in the case of military and other paymasters, and indeed of all disbursing agents. W h e n e v e r any such agent
p a y s over money in gross to another officer or agent, in obedience to an
o r d e r emanating from the head of the department to which his agency is
subordinate, it is uniformly and necessarily allowed to him by the accounti n g officers of the Treasury.
A distinction, however, exists between payments made under transfer
drafts, or special orders like that now under consideration, and payments
in detail to those who claim to be the creditors of the Government. In
reference to all such payments, it is undoubtedly true that, if the Bank or
a n y other disbursing agent pays out the money of the Government to per*
s o n s not entitled to it by law, or in a manner different from that which
has been legally prescribed, such payments will be disallowed by the accounting officers of the Treasury. T h e special instance referred t o b y the
B a n k belongs, if I am correctly informed, to this latter class of cases*
According to the regulations prescribed by Congress, the disbursements
m a d e to pensioners, under the orders of the W a r Department, are subj e c t e d to the revision of the Treasury Department, the accounting offic e r s of which have directed that those disbursements shall be accompanied by certain formalities, prescribed by them under the authority of law.
In the course of its agency, a pensioner was paid by the Bank, in obedience to instructions from the Pension Office, without requiring all the
formalities prescribed at the T r e a s u r y ; and the payment, for the want of
those formalities, was subsequently disallowed by the Auditor of the
T r e a s u r y , although the order of the War Department was produced to
him* T h e distinction between this case and the one before us is too
obvious and decisive to need any additional remark.
T h e refusal of the Bank to deliver over the books and papers belong


22

[ Rep. No. 263. J

ing to this agency, is a still more palpable breach of the duty which r e *
suits from the subordination of the agent to his principal, because not ex*
cused by any apprehension, well or ill founded, of prejudice to the Bank*
These documents having been received from the War Department alone^
and not being the subject of accounting at the Treasury, might have beet*
delivered with absolute safety to the Bank and its officers. T h e y are^
moreover, exclusively the property of the Government, and have b e e n
entrusted to the Bank for the sole purpose of guiding it in its payments 5
and as those payments are to be made semi-annually, the Government is
certainly entitled, if it thinks proper to claim it, to the custody of thedocuments during the interval, even though it should be obliged to r e t u r n
them again to the Bank when the day of payment shall arrive- T h e
same remark may also be applied to the moneys of the agency which t h e
Government is not bound to leave on deposite in the Bank, even if it w e r e
admitted that the law has imposed on it the duty of employing the B a n k
to pay them out. The conduct of the Bank, regarding it in this light, antl
independently of every other objection, appears to me to be wholly i n d e fensible.
I have only to add, in closing this communication, that the importance
of the subject, the elaborate discussion it had received in the paper r e ferred to me, the obscurity in which some of the points were involved b y
the erroneous assumptions of that document, and the strong desire which
I have felt that the grounds of my opinion should be distinctly understood >
have led to a prolixity which, however I may regret it, has seemed to b e
unavoidable.
I have the honor to be,
With high respect,
Your obedient servant,
^
^ n
B. F . B U T L E R I o the P R E S I D E N T of the United States.
BANK

OF

THE

UNITED

STATES,

January 23, 1834.
S I R ! I have had the honor of receiving your favor of the 13th inst., in
which you state that the directions of the Commissioner of Pensions to
transfer the funds, books, and papers of the pension agency, under t h e
act of Congress of June 7, 1832, from the Bank of the United States to
the President of the Girard Bank, were in conformity to instructions
given to him by you. Having thus ascertained that these directions
emanated from the highest authority claiming the power to give them, t h e
Board of Directors have proceeded to consider how far they would be jus*
tified in conforming to them ; and, after a very deliberate examination y
they have instructed me to apprise you that they cannot, consistently w i t h
their duty under the act of Congress, assigning the pension agency to t h e
Bank, make the transfer you have requested. Having communicated this
determination, I might stop here, but it accords better with the feelings
of respect entertained for you, both personally and officially, to explain
to you, without reserve, the reasons of their decision. This I shall do i n
a few words. T h e payment of pensions was no part of the original c o n 


[ Rep. No. 263. J

23

t r a c t with the Bank, which stipulated only to perform the duties of commissioners of loans. It was not until after the Bank was chartered that
an act of Congress devolved upon it this charge, which was not declined,
from a natural desire to give every facility which it could afford for the
transaction of the public business- But having assumed the duty, the
B a n k will not the less faithfully perform it, because it is at once voluntary, gratuitous, and burdensome- T h e Bank then is in the execution of
t h e acts of Congress. T h e s e acts prescribe certain duties to certain officers—the Congress itself being the common and only judge between
t h e m when they differ in opinion as to their respective powers, and all
agreeing that whatsoever Congress has prescribed must be obeyed till
Congress otherwise directs- It is no justification to the Bank to obey
a n y other authority, for if it pays money, or transfers money, without the
authority of Congress, its accounts may be disallowed by the accounting
officers- This, as you are aware, has already occurred, in consequence
of its obedience to the instructions of the officer now issuing this order ;
a n d the question which now presents itself is, whether Congress, having,
b y positive enactment, placed the pension moneys in the Bank, has authorized the Secretary of W a r to withdraw them- T h e decision of this
question depends, of course, on two things: 1st- W h a t Congress has directed the Bank to do ; and, 2d, what Congress has authorized the Secretary of War to do : of these in their turn- T h e charter of the B a n k ,
passed on the 10th of April, 1816, declared that the Bank " s h a l l also
do and perform the several and respective duties of commissioners of loans
for the several States, or any one or more of them, w h e n e v e r required
b y l a w . " A s soon as the Bank was organized, the act of March 3, 1817,
passed, providing
1st- T h a t u the several duties of commissioners of loans for the several
States shall be performed by the President of the Bank of the United
States, the Presidents of the several branches of said Bank, and by the
Presidents of such State banks as the Bank of the United States might
employ, in States w h e r e no branch of the Bank of the United States should
b e established;" and
2d- That " it shall be the duty of the Secretary of the Treasury to
notify the President of the Bank of the United States that the duty now
performed by the commissioners of loans will be transferred to the Bank
of the United States ; and he shall direct the commissioners of loans,
a n d the agents for military pensions, where there is no commissioner,
respectively, in the several States, to deliver to the President of the Bank
of the United States, or to the President of a branch thereof, or to the
P r e s i d e n t of such State bank as the Bank of the United States may
employ, on such day or days as he may designate, the register, and all the
books and papers of their respective offices." Concluding with a proviso,
that u this should not be construed to extend to any agent for military
pensions in any State w h e r e there was no bank established by l a w . "
A n act of Congress had in the mean time passed on the 24th of April,
1816, declaring " that the Secretary of W a r is authorized and required
to appoint some fit and proper person in those States and Territories
w h e r e there is no commissioner of loans, and also in the district of
M a i n e , to perform the duties in those States and Territories, and in said
district, respectively, relating to pensions and pensioners, which are
n o w required of said commissioners in their respective States-"



24

[ Rep. No. 263- J

T h e s e acts form t h e basis of the pension agency system of t h e U n i t e d
States, w h i c h i s —
T h a t t h e B a n k of t h e U n i t e d States and its b r a n c h e s pay t h e p e n s i o n s
in States w h e r e t h e B a n k and those branches are established.
T h a t t h e B a n k designates for that purpose some State bank in S t a t e s
w h e r e t h e r e is no branch b a n k ; and
T h a t w h e r e t h e r e is n e i t h e r a branch of the United States B a n k , n o r
any State b a n k w h i c h it can d e s i g n a t e , the Secretary of W a r is a u t h o r i z e d
to appoint a pension a g e n t .
Accordingly, w h e n e v e r a n e w pension agency, not provided for in t h e s e
acts, w a s to b e established, a special act of Congress was n e c e s s a r y .
T h u s , on t h e 3d of M a r c h , 1819, an act passed by which t h e S e c r e t a r y
of W a r w a s " a u t h o r i z e d to appoint an agent, in addition to t h e o n e
a l r e a d y appointed, in the State of T e n n e s s e e , for the purpose of p a y i n g
p e n s i o n e r s of t h e United States residing in E a s t T e n n e s s e e . " S o , o n
t h e 20th of M a y , 1826, t h e Secretary of W a r was in like m a n n e r
*' authorized to establish a pension agency at Pittsburg, in the State of
P e n n s y l v a n i a , for the p a y m e n t of pensioners of the United States r e s i d e n t " in that vicinity, and u that t h e Secretary of the T r e a s u r y is a u t h o r i z e d to make the necessary a r r a n g e m e n t s with the B a n k of t h e U n i t e d
States, for paying the before mentioned pensioners at the office of d i s count and deposite of said b a n k at P i t t s b u r g . "
F r o m t h e s e , it is manifest that a positive law directed the transfer to
the B a n k of the U n i t e d States of the pension agency, and that t h e
S e c r e t a r y of W a r h a d no authority w h a t s o e v e r to change the system of
C o n g r e s s ; so clear was this, that w h e n , in the y e a r 1829, the s a m e
offi cer w h o has directed this transfer, ordered a similar transfer at Portsmouth, N e w H a m p s h i r e , the o r d e r was retracted. In like m a n n e r , w h e n
y o u r predecessor established a pension agency in Albany, the subject
was examined by yourself, in consequence of the representations of t h e
B a n k against that measure ; and you did me t h e honor to write to m e on
t h e 1st of M a r c h , 1832, as follows : " I am satisfied, from a careful e x a mination of the laws of Congress, that this d e p a r t m e n t is not w a r r a n t e d
in appointing a pension agent in any State w h e r e the United States B a n k
has established one of its b r a n c h e s . H e n c e the agent at A l b a n y h a s
b e e n notified that his appointment, b y this department, has this d a y
ceased."
It will therefore be admitted that, up to the 1st of M a r c h , 1832, t h e r e
was not the least authority in the D e p a r t m e n t of W a r to make this t r a n s fer ; and it remains to be seen what p o w e r Congress has since given to
that d e p a r t m e n t . T h e only authority alleged on this occasion by t h e
Commissioner of P e n s i o n s is, that the act of the 7th of J u n e , 1832, p r o vides " that the pay allowed by this act shall, under the directions of
t h e S e c r e t a r y of the T r e a s u r y , be paid at such places and times as t h e
S e c r e t a r y of the T r e a s u r y shall d i r e c t ; " which authority was, by a r e s o lution of Congress oi the 28th of J u n e , 1833, transferred to the S e c r e t a r y
of W a r .
T h e effect of this provision is now to be considered. W h e n C o n g r e s s
passed t h e act of J u n e 7 7 1832, t h e r e had existed a pension agency from
t h e y e a r 1789, a period of forty-three y e a r s . T h e laws had fixed t h a t
t h e B a n k of the United States and its branches should be the p e n s i o n
agents, and that the S e c r e t a r y of W a r should appoint pension a g e n t s



[ Rep. No. 263. ]

25

w h e r e there was neither a branch of the Bank of the United States nor
a S t a t e bank* T h a t system has been in full operation for fifteen years*
and w a s perfectly familiar to Congress, who had been legislating upon
it for those fifteen years, adding to the pension list numerous classes of
pensioners, to be arranged, according to their residences, to the agencies
most convenient for them. In prosecution of the same design, the act
of J u n e 7, 1832, made a large addition to the pension list, accompanying
it w i t h a general declaration that these pensioners should receive their
allowances " at such places and times as the Secretary of the Treasury
m i g h t direct,"
I t is very difficult to imagine that in this phraseology Congress had any
o t h e r design than to do what they had so often done before—authorize
t h e arrangement of the pensioners according to localities, by paying them
at t h e pension agencies most convenient to their respective residences.
T o the payment of any pension there must be a union of four things—
a t i m e when to receive, a place where to receive, a person to receive,
a n d a person to pay* Congress k n e w this perfectly, and in this act of
J u n e 7, 1832, they designated the receiver, the time and place of receipt,
b u t said nothing about the agent who was to pay ; because to assign the
p l a c e was only to designate the pension agency existing at that place—
a pension agency being established by previous acts of Congress, and
w h i c h could not even be altered, as has just been seen, except by special
act of their own- T h e question then arises, does the authority to name
t h e place of payment authorize the Secretary to appoint the pe?*son who
is to make the payment ? Still further, does an authority to name the
p l a c e of payment, at which there is already an agent, authorize the
S e c r e t a r y to dismiss that agent—to appoint another in that same place—
to withdraw the funds from the old agent, and place them in the custody
of the new agent ? T h e question, in short, is whether places and persons are synonymous. T h e word " places" must be used in its ordinary
a n d common sense meaning, without being strained from its natural construction, in order to diminish the power of Congress- In that meaning,
Philadelphia is a place, N e w York is a place, Baltimore is a place ; and
w h e n the Secretary is authorized to assign the pensions to those places
respectively, it must have been intended to designate the general locality
of those cities. T o go further than this: to say that Chesnut street is
o n e place, and that Third street is another place ; that the banking house
of the United States Bank is one place, and the Girard banking house
a n o t h e r place, and that the Secretary may appoint a pension agent for
e v e r y street, seems to involve an utter confusion of all distinction of persons or places. Such a change is a change of agency, but certainly not
a change of place- T h e r e would be more plausibility, though not more
j u s t i c e , in this construction, if any actual change of " place" had occurred.
B u t this is not even contemplated- T h e Commissioner of Pensions, in
his letter of the 15th instant to the President of the Girard Bank, says
expressly that " it is determined at present to confine the payments,
u n d e r the act of J u n e 7, 1832, to the banks of deposited which are of
course in the places where the Bank and its branches now are ; and in
your letter t o m e of the 13th instant, you mention " that the Commissioner
of Pensions, in authorizing the banks of deposite to make the payments
u n d e r the act of J u n e 7, 1832, instead of the Bank of the United Statea



26

[ Rep. No. 263. ]

and its branches, at those places tvhere local banks have been selected fijp
the Treasury Department as banks of deposite, acted in conformity with 1
instructions given him by me.
It is manifest, then, that these instructions do not direct the place
w h e r e the payments are to be made. T h e y direct the person w h o p a y *
in that place.
T h e y make no change in the place.
T h e y only c h a n g e d
the agent who is to make the payment in that place ; and here s e e m s t«*
lie the radical error of the whole proceeding. T h e unsoundness, m o r e over, of such a construction will be seen in the dangerous c o n s e q u e n c e *
to which it leads. T h e Secretary is simply authorized to direct the timesand places at which certain soldiers are to receive their pensions. F r o m
this phrase it is attempted to deduce the following consequences :
T h e Secretary of War, by the act of 1816, is authorized to appoint
pension agents " i n those States and Territories where there is no commissioner of loans."
Under the authority of these phrases, he appoints
them in States and Territories where there is a commissioner of loans.
T h e act of March 3 , 1817, directs a formal surrender to the B a n k o f
all the records of pension agencies. T h e Secretary-, by virtue of t h e s e
phrases, orders the Bank to give up funds and records to agents of hi«
own appointment. Congress deemed it necessary to pass a special act to
enable the Secretary of War to appoint a pension agent in Pittsburg, and
again in T e n n e s s e e . T h e s e phrases are now construed to empower the
Secretary to appoint pension agents without limitation.
T h e pension money of last year, amounting to more than three milliona
and a half of dollars, was mainly placed in the Bank of the United
states, whose whole capital was pledged for the safe keeping and t h e
proper disbursement of the funds. T h e Commissioner of Pensions finds
in these words a power to withdraw the whole of these funds, and p l a c e
™Y 1 i n « •?
f
individuals on personal security alone ; to appoint
number of
E L 3 a n ? e c r l t i e s fr agents ; to make contracts with banks, and to t a k e
«?rtwf. d * "
<>™ individuals. Congress is now legislating t o
f ™ i iu? c o n s Secretary to appoint a pension agent in Alabama? A c c o r d trUctlon
™«?«l
> their labor is superfluous, since the Secretary m a y
an agGnt not
3EEtr«
°nly i n A l a b a * » a , but wherever and w h e n e v e r h e
ininKs proper.
he
« i o h h H ^ r y t i t lW r ° f l - t a V e a C t e se e e m hs a t conclusive against ascribing to it any
f
n
^nrtS**"S
'
^ *l a f? r m a l t a C t to h e original transfer of the pension
hy
f
S
L 7
w \h a v B e ° t h a t
Congress, with all its cautionary
f j ? " *1
^
\
1?
w h e n e v e r any authoritv over pension
agencies was given to the Secretary of War, it was b V virtue of a separate and clear act of Congress. N o w , if Congress intended to alter their
established system, undoubtedly they would have said so. Yet this act,
which is supposed to repeal, and supersedes no less than five acts of C o n f«^o S ' ^ o 0 1 ° f 1 8 0 9 ' t h e a c t o f A J > r i l 10 > 1 8 I 6 > of 24th April, 1S16, of
J8J 9, ot 1826, l s merely an act supplementary to the " Act for the r e l i e f
of certain surviving officers and soldiers of the revolution." It s a y s
nothing about pension agencies ; professes to repeal nothing, to transfer
nothing, to change nothing in regard to them ; and the o'nly words i t
uses, from which this extraordinary power can be extorted, are w o r d s
absolutely necessary to convey the intention that, as some times a n d
places of payment must be designated, these, as matters of detail, w e r &
left to the executive officers.



[ Rep. No. 263. ]

27

T h a t neither Congress, nor the executive officers themselves, supposed
t h a t t h e act w a s liable to such a construction, is apparent from their cond u c t since its passage.
T h e act itself was passed on the 7th of J u n e , 1832 ; yet, on the 7th of
J a n u a r y , 1833, the House of Representatives of that same Congress
p a s s e d a bill " authorizing the Secretary of W a r to establish a pension
a g e n c y in the town of Decatur, in the State of Alabama, and provided
for t h e paying of certain pensioners in said town of D e c a t u r . " T h a t bill
w a s lost in the Senate, on the ground, it is believed, of its being an int e r f e r e n c e with the provision for paying the pensioners through the B a n k
of t h e United States. At the present session of Congress, that bill, with
t h e same title, is again reported, and now awaits its third reading.
N o w , if the Congress who passed the act of June 7, 1832, thought it
e m p o w e r e d the Secretary of the Treasury or of W a r to establish pension
utrencies, why did they propose a specific act for the purpose of author i z i n g him to establish a single agency ? T h a t the Secretary of the T r e a s u r y did not so construe it, is manifest from the fact that, although the
u<t of May 15, 182S, gave the same power to the Secretary of the T r e a sury as this act of 1S33 does, that is, authorizes the payments " a t such
places and days as the said Secretary may direct," yet that officer never,
it is believed, appointed any agent, or directed any transfer of pension
funds under its authority.
T h a t the W a r Department did not so construe it, is evident from t h e
fact that, during eighteen months from the passage of the act to the p r e s e n t time, the pensioners, under this act, have been arranged to the r e spective pension agencies, and have been paid there without any distinction of place b e t w e e n them and the other pensioners. T h u s , in the
r e p o r t made to you by the Commissioner of Pensions, on the 27th of
N o v e m b e r , 1833, he s a y s : " T o pay the pensioners under the acts of
M a r c h , 18, 1818, May 1, 1820, and March the 1st, 1S23, there have been
s e n t to the pension agencies during the year past
- $774,376 83
T o pay invalid pensioners
287,134 66
T o pay pensioners under the act of J u n e 7, 1832,
- 3,547,179 57
intimating no difference of any kind between the pensioners under this
act and under preceding acts.
On the whole, it appears to the Board of Directors that the instruct i o n s of the Commissioner of Pensions have no warrant of law ; that they
cannot surrender the books and papers and funds committed to their custody by Congress, without a revocation by Congress of that trust. Congress is fortunately now in session, and if it be the pleasure of that body
to release the Bank from this charge, it will be very promptly and willingly surrendered. But until then, they do not feel themselves at liberty
to do what they would deem a violation of their duty to Congress.
In the mean time, however, the pension agents will not consider themselves at liberty to pay any pensions under this act while the present
injunction not to pay them exists, as it may create an obstacle in the settlement of their accounts. Accordingly no pensions under this act will
b e paid without further instructions from the Commissioner of Pensions,
I have the honor to be,
Very respectfully, yours,
N . B I D D L E , President.
To

the

SECRETARY




OF

WAR.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102