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REPORT
OF THE

itentt of m mmtrt
TO THE

COMMITTEE OF WAYS AND MEANS
OF THE

Bouse of Representatives,
January 28, 1833.

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HARVARD COLLEGE
BY E*CHANtt£

JAN 4 1934

BANK OF THE UNITED STATES,

January 29th, 1833.
At an adjourned meeting of the Board of Directors held this evening, for
the purpose of receiving the Report of the Coramittee of Exchange on the
subject of the letter from the Hon. G. C. Verplanck, Chairman of the Committee of Ways and Means of the House of Representatives, Mr. Be von,
Chairman of the Committee of Exchange, presented the following Report,
which was read; and, on motion of Charles Chauncey, Esq., it was
Resolved, That the President be instructed to transmit a copy of Mid Report to the Chairman of the Committee of Ways and Means.
On motion of Mr. Newkirk, it was
Resolved, That one thousand copies of said Report be printed for the use
of the Directors and Stockholders of the Bank.
Extract from the Minutes.
S. JAUDON, Cashier.

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REPORT.
THE Committee of Exchange, to whom was referred, on the
15th instant, a letter from the Hon. G. C. Verplanck, Chairman
of the Committee of Ways and Means, of the House of Representatives of the United States, dated the 10th inst., apprizing the
Board of Directors that the Committee of Ways and Means intended, as early as possible after the 14th instant, " to consider the
u
several subjects touching the Bank of the United States, referred
"to them by the House of Representatives, and requesting any in" formation which the Board of Directors may think it important
"to communicate,"
REPORT:
That, having requested the Cashier of the Bank to visit Washington, for the purpose of learning the particular objects of inquiry, and having ascertained that they related to the late arrangement in regard to the three per cents—the condition of the debts
in the Western States—and the general situation and solvency of
the Institution—-they submit for consideration, the following statements and views on these several subjects.

One of the most important objects in the administration of the
Bank, is to preserve the currency and credit of the country in a state
of the greatest possible uniformity. The vibrations of business, and
the usual irregularities of trade, in so extensive a territory, require constant care to preserve that uniformity in a system of
currency so complicated as ours. But, in addition to these causes
of fluctuation, an entirely new element is introduced into our
monied system, by the extinguishment of the public debt. No
country has ever yet paid off its debt; and no country, therefore,
has had to contend with the inconvenience of accumulating, in
the first instance, large amounts of revenue, and then throwing
suddenly back upon the community these masses of capital. To
do this without any sensible derangement of the business of the
community, is a work of much labor. When the Government
directs that, on a given day, a certain number of millions, lying
scattered over the whole interior, shall be paid at a few places on
the Atlantic, as there is never a previous accumulation of funds
lying in the vaults of the Bank, but they are distributed in loans
over the whole Union, it becomes necessary to concentre them at
the places of payment; and the difficulty lies in thus withdrawing

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from the community only what may be necessary, and for as short
a period as possible. The success of the Bank in these operations, has attracted the attention of the officers of the Treasury,
who witnessed them. Thus, Mr. Rush, in his Treasury Report
of the 13th of December, 1828, says:
" In conclusion, the mode of its agency in large payments of
" the principal of the debt, is not to be overlooked. By its ar" rangement for them, it avoids the inconvenience of too great an
" accumulation of money in the vaults of deposite used by the
" Government, and the vacuum that would succeed its too sudden
" distribution. It does this by anticipating, as the periods of pay" ment approach, the disbursement of a considerable portion of
" the stock, in the form of discounts, in favor of those who are to
" be paid off, thereby enabling them to employ their capital as op" portunities may offer beforehand. In this manner, heavy pay" ments of the debt are, in effect, made gradually, instead of the
"whole mass being thrown at once upon the money market,
" which might produce injurious shocks. So prudently in this
" and other respects does the Bank aid the operation of paying
" off the debt, that the community hardly has a consciousness
" that it is going on."
So, too, Mr. Ingham, in his letter to the Bank, of the 1 lth of
July, 1829, already published, says:
" I take the occasion to express the great satisfaction of the
" Treasury Department at the manner in which the President and
"Directors of the parent Bank have discharged their trusts in all
" their immediate relations to the Government, so far as their
" transactions have come under my notice, and especially in the
" facilities afforded in transferring the funds of the Government,
" and in the preparation for the heavy payment of the public debt,
" on the first instant, which has been effected by means of the pru" dent arrangements of your Board, at a time of severe depres" sion on all the productive employments of the country, without
" causing any sensible addition to the pressure, or even visible
" effect upon the ordinary operations of the State Banks."
And the President of the United States, in his Message to Congress, of December, 1829, says:
" The payment on account of the public debt, made on the first
" of July last, was eight millions seven hundred andfifteenthou" sand four hundred and sixty-two dollars and eighty-seven cents.
" It was apprehended that the withdrawal of so large a sum from
" the Banks in which it was deposited, at a time of unusual pres" sure on the money market, might cause much injury to the inteu
rests dependent on bank accommodations. But this evil was
" wholly averted by an early anticipation of it at the Treasury,
" aided by the judicious arrangements of the officers of the Bank
"of the United States."
It had thus become part of the settled policy of the Bank at the
approach of any large payment, to begin its preparations for a
long period in advance, so as to collect its means gradually and

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to distribute its disbursements over as wide a space as possible.
The year 1832 presented a case of peculiar delicacy in regard not
merely to the amount of debt redeemable, but to the situation of
the country which was to pay it.
1st. The situation of the country was this. In one of those
commercial movements incident to all free and active nations, the
importations of the year 1831 were unusually heavy, owing principally to the state of Europe, and the close of that year found the
country much indebted to Europe. The natural and inevitable corrective was to import less the next season, and in the interval to
assist in the diffusion of these importations, and to facilitate their
gradual consumption until the new crop furnished new means of
payingfor them. It was therefore specially desirable that during the
year 1832, as little extraordinary claim as possible should be made
upon our citizens, the importations of 1831 having made the exchanges unfavorable lo the United States, and the great object of
the Bank was to prevent any addition to the foreign demand until
after the fall of 1832.
2d. In this state of things, the payments on account of the funded debt in the year 1832, were to be for principal and interest
218,080,057 46.* Of this £1,739,524 01 of principal had been paid
on the first of April, and
There remained 815,236,595 56, of which between eight and
nine millions were owned by Europeans, thus adding to the commercial claims that amount of extraneous demand on account of
the public debt.
Under these circumstances, the Board of Directors thought it
necessary to begin early to make their arrangements, and accordingly the following proceedings took place.
"Bunk of the United States, March 13, 1832.
" At a meeting of the Board of Directors held this day, the fol" lowing gentlemen present, viz:—N. Biddle, President; Messrs.
" Sullivan, Bohlen, Pratt, Neff, Coleman, Platt, Willing, Bevan,
" Eyre, White and Henry. The President submitted to the Board
"his views in relation to the probability of the redemption by the
" Government in the course of the present year of a large portion
"of the three per cents of the United States, more than one half of
" which stock, he stated to be held by foreigners, the magnitude of
"whose claims upon this Bank might possibly expose the commun i t y to great inconvenience, unless some measures should be
" adopted for deferring a part of the payments that maybe required,
• Total pay menu of principal 31st December 1831,
Pay menu on the first of April, 1832

$7,539,335 29
1,739,524 01

$9,278,859 30
October 1832, andfirstof January, 1833—principal and interest 15,236,595 56
24,515,454 86
An actual payment between the 31st of December 1831, and first of January
1833, of nearly twenty-five millions in twelve months.

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" and suggested the expediency of empowering a committee of this
" Board to enter, for that purpose, into such arrangements with the
" holders of that Stock as might combine the interests of the Bank
"with those of the public.
Whereupon it was on motion,
"Resolved, That the subject of the communication just made by
" the President, be referred to the Committee of Exchange, with
" authority to make on behalf of the Bank, whatever arrangements
" with the holders of the three per cent stock of the United States
" may in their opinion best promote the convenience of the public
" and the interests of this institution."
This reference to the Committee of Exchange, was considered
specially appropriate, because the payment of the foreign stockholders was connected with the foreign exchanges, and because
to this Committee had always been referred all the large monied
operations of the Bank requiring confidential and prompt action.
It has been for a series of years, the uniform practice of the
Bank to refer such negotiations to some small committee, and
since the permanent organization of the Exchange Committee,
that has been selected for such objects: Thus
Extracts from the minutes of the Bank U. S., Aug. 27th, 1819.
" PRESENT—Langdon Cheves, President; Messrs. Biddle,
Fisher, Sergeant, Lippincott, Coulter, Lisle, Calhoun, Connell,
Lammot, Dugan,Schott, Toland, and Potter.
The following among other resolutions was adopted:
" 1st, That a secret committee of three members be appointed,
who together with the President, shall be authorized to effect a
loan for a sum not exceeding three millions, for a period not exceeding three years, and that they be authorized to pledge a sum
not exceeding three and a half millions of five per cent stock belonging to the Bank, to secure the said loan.
The Committee was appointed, consisting of Messrs. Biddle,
Fisher, and Sergeant, with Mr. Cheves, by whom Mr. Cadwalader was sent to Europe, and made with Messrs. Barings the loan.
" Bank United States, \6th July, 1822.
" PRESENT—Langdon Cheves, President; Messrs. Willing,
Cope, Flemming, Coxe, Lippincott, Whitney, and Brugiere.
" On motion,
" Resolved, That the subject of remitting the balance of the loan
due in Holland, directly or indirectly, be referred to the Foreign
Exchange Committee, with authority to take the necessary measures."
" Bank United States, 29th April, 1823.
« PRESENT—N. Biddle, President; Messrs. Dupont, Fisher,
Cope, Pratt, Willing, Coulter, Lippincott, Coxe, Whitney, and
Henry.
« Mr. Cope, from the Committee on Foreign Exchange, reported the following resolution, which was adopted.

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" Resolved, That the President and Cashier are hereby authorized, in conjunction with the Exchange Committee, to make
such arrangements as they may judge expedient, with regard to
the account of the Bank, with Messrs. Baring, Brothers & Co., of
London."
" Bank United States, My 22rf, 1823.
"PRESENT—N. Biddle, President* Messrs. Dupont, Fisher,
Cope, Pratt, Coulter, Bohlen, Whitney, Cadwalader, and Willing.
" The Committee of Foreign Exchange, in conjunction with the
President and Cashier of the Bank, were authorized to dispose of
the five franc pieces on hand belonging to the Bank, at such rates
as they may think for the interest of the institution."
"Bank United States, Dec. 2rf, 1823.

" PRESENT—N. Biddle, President; Messrs. Connelly, Dupont,
Cope, Pratt, Lippincott, Bohlen, Coxe, Whitney, Willing, and
Henry.
w
Mr. Cope, from the Committee on Exchange, offered the following resolution, which was read and adopted.
" Resolved, That the executive officers of the Bank, in conjunction with the Exchange Committee, be, and they are hereby authorized to operate in exchange by the sale of bills of this Bank,
or of bills drawn upon it, in such manner as they may deem most
for the interest of the institution."
u

Bank United States, March 30th, 1824.
" PRESENT—N. Biddle, President; Messrs. Eyre, Cadwalader,
Henry, Brown, Bohlen, Willing, Wetherill, and Evans.
" The President communicated to the Board the opinion of the
Counsel of the Bank, on the subject of the sale of Bank Stock,
which has been hypothecated to the Bank, and forfeited.
" Whereupon, on motion,
" Resolved, That the Committee on Foreign Exchange, be authorized to make such disposition of the forfeited Bank Stock, as
they may deem expedient."
" Bank of the United States, Jlpril23d, 1824.
PRESENT—N. Biddle, President; Messrs. Dupont, Eyre,
Bohlen, Henry, Whitney, Lippincott, Clapier, Beck, Brown,
Evans, Willing, and Potter.
" On motion,
"Resolved, That the Committee on Foreign Exchange be authorized, with the officers of the Bank, to negotiate for the sale of
Spanish dollars."
"Bank United States, November 27th, 1824.
« PRESENT—N. Biddle, President; Messrs. Eyre, M'Kim, Whitney, Willing, Cadwalader, Henry, Clapier, Wetherill, Brown,
Evans, Colt, and Verplanck.
a

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u

On motion,
" Resolved, That the Committee on Exchange be authorized to
adopt such measures as they may deem expedient, in relation to
the loan offivemillions."
" Bank United States, January 6th, 1826.
" PRESENT—N. Biddle, President* Messrs. Dupont, Eyre, Beck,
Brown, Evans, Weir, Coxe, Bohlen, Pratt, and M'llvaine.
" On motion of Mr. Eyre,
" Resolved, That the Exchange Committee be authorized to dispose of so much of the United States and Bank Stock, as may
seem to them for the interest of the Bank."
"Bank United States, January 16/A, 1827.
"PRESENT—N. Biddle, President; Messrs. Cope, Weir,Fisher,
Bohlen, Pratt, Cadwalader, Willing, Toland, A. White, Bevan,
and Hemphill.
" On motion of Mr. Toland,
" Resolved, That the Committee of Exchange be authorized to
negotiate with the Government of the United States for the whole,
or any part, of the sum which it proposes to borrow, on such
terms as they may deem most for the interest of the Bank."
" Bank of the United States, 27th March, 1827.
"PRESENT—N.Biddle,President; Messrs. Cope,Fisher,Bohlen,
Pratt, Willing, Toland, A. White, and Hemphill.
" On motion,
" Resolved, That the Committee of Exchange be authorized to
make whatever arrangements they may deem most for the interest of the Bank, in regard to discounts upon certificates of
funded debt of the United States, that may become payable on the
first of July next, at a rate different from that of the ordinary discounts."
Thus appointed in the accustomed manner by a large meeting
of the Board to execute this important trust, the Committee immediately commenced, by negotiating with the agent of a numerous body of European stockholders, who owned 81,700,000 of
the three per cents, and another, who represented nearly one million of dollars. With neither of these, however, could any arrangement be effected; the parties especially represented by the
former, preferring to wait till the period of actual reimbursement
before they decided on the disposal of their funds. In the mean
time the Treasury Department having applied to the Bank for its
opinion as to the expediency of making a payment of six millions
on the first of July, the opinion given was, that it would be better
for the country not to make such a pressure on its resources at
that moment, and the payment was postponed, the Bank consenting to allow the government the quarter's interest during the interval. From that period the whole operations of the Bank were directed to the gradual withdrawal of all the surplus means of the

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9
Institution from the points where they could be spared, and the accumulation of them in the northern Atlantic cities, where the payments were to be made, and also in Europe, so as to provide the
means of payment there, to the foreign stockholders who might
desire the transmission of them to their respective homes. The
result of these preparations was, that by the month of October,
the Bank had concentred at these points means fully adequate
to pay the whole amount of funded debt payable at that period
without the slightest inconvenience to itself. On that day the
State Banks of Philadelphia, New York, and Boston, owed to the
Bank,
£2,280,000
Its specie, at these places, amounted to
3,200,000
It had paid off all its foreign debt, amounting, in May,
to 1,878,000, and had in Europe, a balance of
2,982,000
Making, of cash means,
.
.
.
8,462,000
With an open credit in Europe, on which to draw,for
2,500,000
Besides large sums falling due in those places, remitted from all
the distant points, and local loans immediately available in October and November, to the amount of many millions—while
the amount of the public debt reimbursable in October, was
28,634,988 37. In this state, the Bank, had it considered only
its own interest, would have been perfectly passive, since it was
perfectly at ease. But it had other and higher interests to consult.
From the communication with the Treasury, in July, it was probable that the funds of the Government might be insufficient to pay
the debt advertised to be paid—and that even if these funds were
adequate, the operation would exhaust all the means of the government, and require that the community should repay the whole
amount of the public funds distributed among them. It was further manifest that the ability of the Government to meet its engagements depended entirely on the punctual payment of the revenue in the commercial cities, from July to January, which was
estimated at about twelve millions of dollars.
That resource was threatened with the greatest danger by the
appearance of the Cholera, which had already begun its ravages
in New York and Philadelphia, with every indication of pervading the whole country. Had it continued as it began, and all
the appearances in July warranted the belief of its continuance,
there can be no doubt it would have prostrated all commercial
credit, and seriously endangered the public revenue, as in New
York and Philadelphia alone, the demand on account of the
foreign three per cents was about five millions.
The condition of the Treasury is seen in the letter of the Secretary of the Treasury, to the President of the Bank, dated July
19th, 1832, as follows:—
" Treasury Department, \9th July, 1832.
u
SIR,—It was not until to-day that I have been able to ascertain the amount of the appropriations made at the last Session of
B

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Congress; and, therefore, I have not been able to decide, before
now upon the amount of the three per cents to be redeemed on the
first of October. I find, as was supposed when you were here, that
we shall be able to pay off about two-thirds at that time. A
notice will accordingly be given in to-morrow's paper, for the
payment of that amount on the first of October, and the remaining
one-third on the first of January. This has been done with the
understanding had between us, that if it should happen that the
public moneys are insufficient to complete those payments, the
Bank will delay the presentation of any certificates of which it
may have the control, until the funds are sufficient to meet them;
the interest to be paid by the United States during the interval.
You will be pleased to indicate such transfers of funds as may be
desirable preparatory to the proposed payments.
" l a m , &c.
"LOUIS M'LANE,
Secretary of the Treasury.
" N. BIDDLE, Esq.,
" President of the Bank of the United States."

To which, the following answer was given—
"Bank of the United States, July 26thy 1832.
u

SIR,—I have had the honour of receiving your letter of the
19th instant, apprising me of your intention to reimburse twothirds of the three per cents on the 1st of October, and the remaining third on the 1st of January. You further state that this
course has been adopted with the understanding had between us,
that, if it should happen that the public moneys are insufficient
to complete those payments, the Bank will delay the presentation
of any certificates of which it may have the control until the
funds are sufficient to meet them.
" The Bank has taken the necessary steps to obtain the control
of a considerable portion of these certificates, and will very cheerfully employ it in such manner as may best suit the convenience
of the government.
" I have the honour to be,
" Very respectfully, yours,
« N. BIDDLE, President.
"Hon. Louis M'LANE,
" Secretary of the Treasury, Washington, D. C."

This letter of the Secretary communicated the facts previously
understood by the Committee, of the probable exhaustion and
possible deficiency of the public funds, and confirmed them in the
expediency of the measure which they had adopted.
It rendered it still more probable that the Bank might be called
upon to make advances for the Government, analogous to those
which took place in the year 1820, at the time when the Louisiana loan held in Europe, was reimbursable. On that occasion,
the following proceedings occurred as detailed in the minutes.

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« Bank United States, \Oth Oct., 1820.
PRESENT—Langdon Cheves, President; Messrs. Eyre, Rundle,
" Lippincott, Willing, Astley, Wetherill,Kuhn, Weir, and Potter.
" The President laid before the Board a private correspondence
a
between him and Edward Jones, Esq., Chief Clerk of the Trea" sury Department, in which that officer states that the Treasury
" will not have the means of paying the balance of the Louisiana
" stock redeemable on the 2lstinst.,and requests to know whether,
" the Bank can advance the amount to the holders of the stock, or
" their agents, in such manner as to save the public credit, and to
" satisfy the holders." Whereupon the Bank agreed to advance
1,500,000 dollars to the stockholders, and withhold the stock
until the Government had the funds to pay it.
u

The proposed division of the payments between the months
of October and January, announced in the letter of the Secretary of the Treasury, the only circumstance not previously
known to the Committee, was, therefore, communicated to the
agent as a fact that would facilitate his negociation, with this
remark. "The subdivision, by weakening the expected pressure on the first of October, makes the Bank less anxious
about that event. But in the present state of the country,
while the whole monied concerns of the community are threatened with confusion by the spread of the pestilence, the Bank is
so desirous of keeping itself in an attitude of great strength to
interpose, if necessary, for the relief of the sufferers, that it is content to submit to any merely pecuniary sacrifice, to secure that
object. The notice of the Secretary of the Treasury will therefore make no difference in your instructions, as they are so shaped
as to provide for this contingency by making the postponement to
a certain term after the payment whenever that may occur."
It was with a full view of all these circumstances—the commercial state of the country—the prevalence of the cholera—and
the probability of some advance to the Government, that the Committee, having ascertained that the agents of the foreign stockholders were not empowered to make any arrangements, resolved
to transfer the negotiation to Europe, and accordingly they requested the same gentleman who had made a similar arrangement in the year 1819, to proceed to England for that purpose.
His instructions, with the correspondence with Messrs. Baring,
Brothers & Co., which followed, are annexed to this report. It
was the expectation of the Committee, that a postponement of a
few months, until the cholera had subsided, would have been sufficient, but as the foreign stockholders might be unwilling to make
a loan for a less time than twelve months, authority for that purpose was given.
On hearing of the arrival of the agent in Europe, and of the certainty of an arrangement for the postponement of a portion of the
foreign debt, the preparations or the Bank were so advanced, as
to justify an extension of increased facilities to the community,

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as will be subsequently detailed. But when the contract itself
reached the Bank on the 12th of October, and it appeared from
the communications of Messrs. Baring, Brothers & Co., to be
contemplated that the stock was to be purchased on account of
the Bank, they were immediately instructed on the 15th of October, that the Bank had no authority to become owners of the
stock, and that it was necessary in order to close the accounts
of the Government, that the certificates should be actually in
possession of the Bank—and they were requested to reimburse
themselves if desirable, out of the funds of the Bank, and to
transmit all the certificates. This is accordingly now in progress, the successive arrivals from England bringing portions of
them. Thus,
The whole amount purchased, was
The whole amount agreed to be deferred

$1,798,597 57
2,376,481 45

Making an aggregate of
For which certificates are already received to
the amount of

$4,175,079 02

Leaving

$ 1,524,446 46
$2,650,632 56

The progress which has been made in the payment of the
whole public debt, with the actual preparations of the Bank to
meet the remainder, will be seen in the following statement.
The total payments of principal to be made in October and January are
815,236,595 50
Of which are distributed among the smaller Loan
Offices, and all paid there, except some small
sums fully provided for
$1,262,885 00
Leaving at the Loan Offices of Boston, New York,
Philadelphia, and Baltimore,

13,973,710 50

Of these 13,973,710 50, the domestic and foreign
stock has been paid, except what has not yet
been called for, amounting to
Of the purchased, and deferred foreign stock, amounting to
4,175,000
Certificates have been received to the
amount of
1,524,000
Leaving outstanding

*2,651,000 00

Making the total of foreign and domestic stock,
for which certificates have not been received

3,662,639 00

1,011,639 00

* While this Report is in the press, February 9,1833, certificates have been
received, or are known to be on the way, to such an amount, as to reduce the
actual balance outstanding to $865,000. See Appendix.

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13
The preparation for the payment of these is as follows:
The outstanding foreign and domestic
stock not included in the arrangement of the Bank is
1,011,639
Add what may be at the smaller offices
yet unpaid
221,750
1,233,389 00
For which the Bank has at Boston,
New York, Philadelphia, and Baltimore—debts from the City Banks
to the amount of
939,000 00
And specie
4,264,626 89
Making
85,203,626 89
The amount of purchased and deferred stock for which certificates have not yet been received is 82,651,000$ but as among the
certificates forwarded, there are to the amount of 8380,000, which
cannot be paid for want of Powers of Attorney, the amount of
the purchased and deferred stock yet unpaid is
3,031,000 00
To pay this the Bank has in the hands of its
foreign correspondents, at the present rate, at
which it could be drawn for
3,250,000 00
The general result is, that the whole of the fifteen millions are
paid, or provided for, and will be finally extinguished without
causing the slightest inconvenience, and without in the least deranging the business of the community. What is moreover
equally remarkable and satisfactory is that by breaking the force
of this foreign demand, and assuming it by the Bank, the exchanges with England and France, instead of being forced up, to
rates at which inconvenient shipments of specie might have been
made, have from the month of July last kept uniformly at rates
not above the actual par of exchange between this country and
Europe.
It has been already stated* that the design of the arrangement
in Europe was to prevent any pressure on the community. The
cessation of the cholera made that pressure less severe, but under
any circumstances the accumulation of so large a sum might disturb some of the branches of industry, and accordingly as soon as
it was known that the Agent had arrived in England, and that an
arrangement of some kind would be accomplished, no time was
lost in communicating to the Board the fact that the preparations
of the Bank were such as to make it practicable to resume the
usual facilities to the community. The subject was therefore immediately brought to the view of the Board in the manner stated
in the following extract from the minutes.
« Bank of the United States, Sept.2\, 1832.
PRESENT—N. Biddle, President; Messrs. Lippincott, Bohlen,
Neff, Willing, Bevan, Sullivan, Pratt, Platt, Eyre, White and
Henry.
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" The President laid before the Board a statement *>f the amount
of the three per cents, of the United States to be paid off on the
first of October,and explained the situation of the Bank and Offices
in relation thereto, shewing the ample resources which have been
accumulated to meet the payment at various points, by means of
the policy which has been pursued for some time past He suggested also to the Board the propriety of considering, now that
the Bank occupied so favourable a position, whether some relaxation in that policy might not be advantageously made.
" Whereupon it was on motion
" Resolved, That the Committee on the Offices be authorized to
modify the instructions under which the Offices of the Bank have
been acting, at such points and in such manner as they may deem
most conducive to the interests of the Bank."
Instructions were accordingly addressed to such of the Western Offices, as would most sensibly feel the restrictions, authorizing them to resume the purchase of domestic exchange, and
draw checks on the Bank. In the same spirit similar instructions
were given to the Office at New York, the situation of which presents the best illustration of the measure in question. On the 29th
of September 1832, the State Banks were indebted to the Office at
New York 81,920,000,and the sums falling due and payable at the
Office for October and November were of domestic bills 82,670,000
and of local discounts 84,414,000, making an aggregate of more
than seven millions. The sums actually payable to the Government in the months of October and November for revenue were
83,225,277 85. But while the State Banks were in debt to the
Office, it was impossible for them to discount freely, and fcthe
Office itself with an impending demand of several millions, a
great portion of which was payable to foreigners, was obliged to
husband its resources for these payments. The month of October was therefore regarded as a month of great embarrassment.
Fortunately the arrival of the intelligence of the arrangement
came in time to enable the Bank to avert it by the following instruction.
Bank United States, October 2tf, 1832.
DEAR SIR,—The preparations for the payment of the public

debt, on the first inst., arc so ample that no inconvenience is apprehended from them at the Bank, or any of its Offices, and after
all the immediate demands on that account are discharged at your
Office, it will still, in all probability, be very largely a creditor of
the State Banks in the city. This state of things naturally presents for considertion the course which the Office should pursue
towards them and towards the community.
In the present condition of the exchanges with Europe, there
will probably be no demand for specie, and it would therefore be
unnecessary to call upon the State Banks for payment in that form
of their balances—that being a measure to be avoided, unless to

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replace what may be taken from the Office, should any demand be
made upon it. But while the balances continue thus heavily
against the State Banks, they will be unable or unwilling to do
much business, and the Office will therefore have an opportunity
of giving to the community such facilities as these State Banks
have it no longer in their power to furnish. A large portion of
the debt from them to the Office may thus be absorbed in good
paper, payable on or about the first of January next, when another
payment on account of the public debt will be made. I therefore
take the earliest opportunity after ascertaining the probable demands against the Bank, on account of these payments, to submit
to the consideration of the Board the expediency of employing a
portion of the surplus funds, now in the form of balances from the
State Banks, in the discount of such paper as may give facilities
to the business of the city. The funds will be thus very usefully
and profitably employed, until they are wanted, and a great accumulation of bank balances be prevented.
Very Respectfully,
Yours,
(Signed,)
N. BIDDLE, President.
ISAAC LAWRENCE, ESQ.

Pres't. Off. Dis. $ Dep. N. York.
The President of the Office answered as follows in his letter of
the 4th of October, 1832.
u
Your tetter had the desired effect of inducing the Board to increase our discounts on good paper payable about the first of January, and on different stocks, payable about the same time.
This will enable us to aid the community, reduce the balances
due from the city Banks, and be profitable to the institution."
I am, &c.
(Signed,)
ISAAC LAWRENCE, President.

And the Cashier wrote as follows :
October 3,1832.
" Our offering to-day was 8750,000$ our receipts 8295,000 and
discounts, including 8170,000 on three per cenjs and 8135,000 on
other stocks, 8551,000. The Banks are in our debt 81,540,000;
and we have paid of the three per cents 81,100,000, or about that
amount."
The Committee have entered into this explanation in order to
show the operations of the measure confided to them in all its details. On reflecting upon the whole course of it with all the information which subsequent events have supplied, they are entirely satisfied that the measure has been highly beneficial to the
community as well as to the Government, and that, so far from
protracting the settlement of the acconnts of the Government,
they will, in fact, be brought to an earlier termination than if the
arrangement had not been made.

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WESTERN DZSBTS.
In the Report of the Secretary of the Treasury, of thefifthDecember, 1832, he enumerates among the causes which made him
anxious about the security of the Bank as a depository of the
public funds, " the great amount of the Bank's transactions, especially in its Western Branches;" and a special agent was sent
to examine the operations of the Bank in the Western States, as
being objects of particular uneasiness.
This ill opinion of the western debts was unexpected, because
in his report of the last year, the Secretary, in enumerating the
merits of the Bank, was pleased to say: " To these may be added
" the knowledge the present Bank has acquired of the business
" and the wants of the various portions of this extensive country,
" which, being the result of time and experience, is an advantage it
" must necessarily possess over any new institution."
In the course of this year, the debt in the Western States has
been considerably diminished; and the judgment which declared
that the loans of last year were deserving of praise, it was
presumed, would have exempted from censure the smaller loans
of the present year. The effect of such a declaration, not on the
Bank, but upon the character and credit of the country generally,
and more especially upon our western fellow citizens, is deeply to
be regretted, since it may inflict upon them a lasting injury.
The western country is blessed with a fertile soil, adapted to
every variety of culture, and with an intelligent and industrious
people, who need nothing except the assistance of pecuniary capital for the full development of their resources. Knowing this,
the Bank has willingly devoted a large share of its means to the
use of that part of the Union. Believing too that the commercial
credit of the country is the common property of the Union, it has
endeavoured, on all occasions, to sustain the reputation of the
State Institutions, and to aid the State Governments in their efforts to attract the investment of foreign capital. Of the seventeen millions of loans made by the State of Pennsylvania, nearly
the whole is furnished from Europe. The loans of Ohio and New
York, are similarly situated; and at this moment, the States of
Alabama, Tennessee, Ohio and Indiana, are endeavouring, either
by the direct responsibility of the State Governments, or through
the agency of banking institutions, to procure the use of foreign
capital. At such a moment, a declaration by what is presumed to
be the highest financial authority in the* Union, that the Bank of
the United States is an unsafe depository of the public funds, and
that this insecurity arises mainly from its loans in the Western
States, is calculated to destroy the confidence of European capitalists, and to impair the credit of the Western States and the
Western Banks. As the common friend of the solvent State Institutions, and to a certain extent identified with the general credit

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of the country, to the Bank of the United States it especially belongs to remove so injurious an impression, and to bear a willing
testimony to the ability and the punctuality of our fellow citizens
in the Western States; in the course of its connexion with whom,
the Bank has met with few losses, and who have uniformly displayed an honorable fidelity to their engagements. The desire
to render them justice, induces the Committee to enter into some
details in regard to the debts of the Bank in the Western States.
The following exhibits the amount and distribution of them,
by the monthly statement of the first of January:
Kentucky. Lexington,
Louisville,
Ohio,
Cincinnati,
Tennessee, Nashville,
Missouri, St. Louis,

Loans.
Bills of Exchange.
Totals.
$ 916,230 40
$ 845,426 54 $1,761,656 94
2,165,656 49
1,969,411 48
4,135,067 97
8,830,821 92
542,332 89
3,373,154 81
1,767,179 17
1,787,466 00
3,554,645 17
566,361 24
74,620 48
640,981 72
$8,246,249 22

$5,219,257 39 $13,465,506 61

These loans have been made by Boards of Directors selected
in their several residences with great care, and composed of the
most respectable inhabitants of the neighbourhood. They act
under a feeling of strong and habitual responsibility, and they are
required to make a semi-annual report of the situation of the
debts in a form which cannot fail to secure to it a deliberate examination. In regard to these debts, the returns from the offices
respectively, on the 1st of December last, contain the following
certificates:
" The undersigned hereby certify, that they have carefully ex" amined in detail, the lists of suspended debt and real estate at this
" Office, and are of opinion that the classification of the debts—the
" estimated "probable loss" ofprincipal on each debt of the " doubtful
"and bad" classes, throughout the lists, with the " estimated present
"value" of the real estate, are all correctly made, as therein stated.
" That the " explanatory remarks" opposite to each debt, give an
"abstract of the measures which have been pursued within the
" last six months for its recovery or security^ and that the " reca" pittdation" exhibits in the aggregate, (including the losses
"chargeable to the contingent fund,) all the losses at present
" known or apprehended on the inactive debt at this Office. And
" that of the active or current debts growing to maturity,
" dollars is considered " doubtful," and upon which we apprehend
" there will be ultimately a probable loss of
dollars.
Cashier.
, President.
t Committee.
« Office Bank of the United States,l
18

."}

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The latest returns., thus certified, of the losses at these several
Offices on the above debt, are as follows:
Lexington,
236,486 87
Louisville,
7,734 38
Cincinnati,
16,952 59
7,744 25
Nashville,
No loss
St. Louis,
The proofs of the general security of this debt, are confirmed
by a single circumstance, which seems entirely decisive; which is
the actual payment of such a portion of it as was required from
the debtors. For example, on an average of ten months past* the
local loans in Kentucky, Ohio, Missouri and Tennessee, have actually been paid to the amount of $3,532,104 93, out of a sum bt
211)257,862 18. Thus the Bank had lent in Tennessee, at the
Branch at Nashville,
On the 12th of October, 1831,
83,137,870 93
By January 2d, 1833, it had been reduced to
1,640,071 20
A diminution of
At Louisville, on the 2d of February, 1832,
the loans were
82,682,629 50
On 12th January, 1833, they
were only
2,078,906 19
At Lexington, they were, on
the 16th July, 1832,
And, on the 12th January,
1833,
At Cincinnati, on 19th January, 1832,
On 10th January, 1833,
At St. Louis, on 18th June,
1832,
On the 7th January, 1833,

$ 1,497,799 73

603,723 31

1,333,530 66
773,865 37
559,665 29
3,366,068 00
2,675,701 80
690^366 20
737,763 09
557,212 69
180,550 40

Making an actual reduction of debt of

83,532,104 93

Which is an actual diminution within an average time of ten
months, of about one-third of the original debt which was reinvested for remittance in bills of exchange. These comparisons are
made from the highest points at which the loans were within the
course of fifteen months, so as to show the greatest reduction.
The reduction of these same Offices, calculating it from January,
1832, to January, 1833, was 82,138,065 47, while during the same

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period the domestic bills had increased 8657,004 58, making an
actual reduction of investments of all kinds, amounting to
8 1,481,061 09, or nearly a million and a half.
In further illustration of the character of the western debts, the
returns show that the total amount of domestic bills of exchange,
purchased at the western offices, from the 1st of July, 1831, to
the 31st of December, 1832, is
816,397,094 93
On which the amount protested and unpaid is
13,863 36
Of which the estimate of probable loss is
1,500 00
But as some portion of this may be still running to maturity, and
its fate undecided, it should be remarked that the whole of
this estimated loss of 81,500, arose out of the purchases during
the year ending on the 1st of July, 1832,—
Which amounted to
810,137,722 22
On which the total amount protested and remaining unpaid, is only
13,863 36
The total losses only
1,500 00
The cause of a loss so little proportioned to the amount of the
investment is to be found in the uict, that the exchange transactions of the western states, grow out of the actual business, the
actual shipments of the produce to the place of its exportation,
furnishing to the Bank the triple security, of the personal responsibility of the shipper, the property which he exports; and again,
the personal liability of the merchant who receives it at the place
of exportation. As an illustration of this, the following statement
of the exchange operations of the Bank at Nashville, may furnish
an interesting example.
1831. October, 8366,512 63. When the few bills remaining out
of drafts on shipments of the
previous crop, had not yet run
to maturity.
1831. Dec'r, 1,062,094 84.
When the shipment of the new crop
had commenced, and the planters and ginners had begun to
draw on their correspondents.
1832. April, 2,759,754 93.
When the crop may be considered
to have all been shipped and
drawn upon, and of course the
amount of bills at the highest
point.
1832. October, 503,234 90. When the bills drawn upon the
shipments of the last crop had
mostly matured.
1833. Jan, 9th, 2,049,612 02. The shipments of the present crop
having progressed to some extent, the amount of bills is naturally swelled in proportion.

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In respect to the ultimate security of the present debt in the
western States, there is a case of a Branch actually closed, from
which some estimate may be collected for the future. In the
year 1821, the Branch at Cincinnati was closed with a debt of
82,528,350 39. A large estimate of probable losses was made,
amounting to 8851,000, but by judicious or fortunate management, this debt has been so secured by mortgage and judgments,
and by compromising in real estate, that no loss is now anticipated.
In confirmation of these statements, the Committee add the
report of the Agent of the Government itself. In the month of
November, 1832, the Secretary of the Treasury deputed Henry
Toland, Esq., of Philadelphia, to make an examination of the
state of the Bank, adding,—" You are requested to direct your
attention particularly to the state of the debt due to the western
Branches, and from persons in the western country generally,
and in ascertaining its amount, to inquire what amount of the
domestic bills of exchange is due in the western country, and
generally how the western debt is secured."
Mr. Toland was eminently qualified for this task, as being a
man of business, familiar with the operations of the Bank of
which he was formerly a Director, and long engaged in trade with
the western country. His report concludes with the following
emphatic language.
" Placing reliance on the Cashiers of the different Offices, and
the respectable gentlemen composing their different Directions,
and comparing the amount of business and profits, and adding
thereto my own knowledge of the general business of the western
country, I do not hesitate to say that I consider the debt in a
safe and wholesome state, and that a greater amount of loss need
not be apprehended from it, than from a similar mass distributed
in the cities of the Atlantic frontier."
In this opinion of Mr. Toland, the Committee, from their own
experience and observation, entirely concur.

THE SAFETY OF TBS PUBLIC DX
The security of the public deposites may perhaps be inferred
from the explanations already given, but it may not be superfluous to suggest some considerations which may relieve all solicitude on that subject.
1st. From the establishment of the Bank to the present day it
has been the depository of about 440,000,000 of dollars of public
revenue. The safety with which they have been kept and transferred throughout the United States is attested by all the Secretaries of the Treasury. By Mr. Crawford, who on the 4th of December 1818, in a reply to an enquiry from a committee of Congress, says, " In reply to the specific enquiry which you make I

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have the honor to state that the Bank has correctly discharged the
duties of Commissioners of Loans and Agents for the payments
of military pensions as far as it has been required by law. It has
promptly transmitted the public money wherever and whenever it
has been required to perform that service. It is presumed that
the facilities expected from it in the collection of duties have been
furnished, as no information has been received at the Department,
that such facilities have been withheld."
By Mr. Rush, who in his report of the 13th of December 1828,
says
" In faithful obedience to the conditions of its charter,and aided
by its Branches, it has afforded the necessary facilities for transferring the public moneys from place to place, concentrating
them at the place required. In this manner all payments on account of the public debt, whether for interest or principal; all on
account of pensions; all for the civil list; for the army, for the
navy, or whatever other purpose wanted in any part of the Union,
have been perpetually met. The Bank is also the depository with
its Branches, for the public moneys from whatever sources of revenue received, aiding too in their collection, thereby giving safety
to the keeping, as well as promptitude, and certainty to the disbursement of the public treasure."
u
It receives the paper of the State Banks paid on public account in the interior, as well as elsewhere, and by placing it to
the credit of the United States as cash, renders it available whereever the public service may require."
By Mr. Ingham, who in a published letter declares of the Bank,
that, a it enables the Government to transmit its funds from one
extremity of the Union to another without cost, without risk,
without pressure upon the section from which they are withdrawn, and with a dispatch which is more like magic than reality."
And the present Secretary of the Treasury in his report of the
5th of December 1831, remarks, " It must be admitted however,
that the good management of the present Bank, the accommodation it has given to the Government, and the practical benefits it
has rendered the community, whether it may or may not have accomplished all that was expected from it, and the advantages of
its present condition, are circumstances in its favor entitled to
great weight, and give it strong claims upon the consideration of
Congress in any future legislation on the subject," Moreover in
his report to Congress at its present session he declares that no
loss had ever been sustained by the Government on its deposites
with the Bank of the United States.
The simple facts thus emphatically vouched, that out of four
hundred and forty millions of Government Deposites taken in all
kinds of Bank paper, and in all parts of the United States, during
a period of sixteen years not one dollar of loss has been sustained
—that during that whole period it has faithfully performed all its
duties to the Government, and never on any occasion failed to

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meet its engagements, may be accepted as presumptions in favor
of its solvency.
2d. The general situation of the Bank may afford similar assurances. The Bank has a capital of 35 millions all paid—it has
more than one fourth of that capital actually in gold and silver in
its vaults—it has due to it from individuals in the United States
upwards of 60 millions of debts, and a balance exceeding three
millions in Europe—it has real estate which is estimated at three
millions of dollars—and in the opinion of the committee there
never was any period since its establishment, when it was in a
more prosperous condition than at the present moment.
This will be seen in further detail by the following condensed
table from the monthly statement of the situation of the Bank,
and its Offices and Agencies, on the first of January, 1833.
The claims against the Bank, are:
Its Notes in circulation,
817,459,571 79
The Deposites, public and private,
13,547,517 95
The Debt to the holders of the funded debt
of the United States, for principal and interest,
6,723,703 16
The unclaimed Dividends,
76,529 84
837,807,322 74

Amounting to
Its resources are:
Specie,
Notes of State Banks,
Balances due by State Banks,

^8,951,847 60
82,291,655 04
1,596,252 08
83,887,907 12

Funds in Europe, and Foreign Bills of Exchange,
Real Estate,
Debts due by individuals, viz:
On Notes discounted,
843,626,870 32
On domestic Bills of Exchange, 18,069,043 25

3,190,225 43
3,036,241 52

Mortgages, &c.

61,695,913 57
103,330 75

Making
From which deduct the claims as above,

80,865,465 99
37,807,322 74

And there remains an excess of

843,058,143 25

This sum of 843,058,143 25, forms a guarantee to the holder*
of the notes of the Bank, and to its depositors, over and above thi
whole amount of their claims. It is applicable in the first instance;,
and before one dollar of it can be appropriated in any other way,
to the payment of any deficiency which might, by possibility,

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arise from the thirty-seven millions first destined for the payment
of notes and deposites. The whole of it must be absolutely lost
before there can be a question whether the holders of the notes of
the Bank, and public and private depositors, are in danger of sustaining any loss. After these claimants are satisfied, and not until
then, the stockholders who own its thirty-five millions of capital,
may divide the balance amongst them.
They* therefore, conclude this part of the subject, by expressing
their entire conviction of the accuracy of the opinion expressed
by Mr. Toland, the confidential agent of the Government, who
says: " Thus far I consider my report, as complying with that
" part of your letter directing the investigation, so as to ascertain
" the security of the public money, and the solvency of the Bank,
" neither of which can, in my opinion^ admit of a doubt"
All which is respectfully submitted,
(Signed)
MATTHEW L. BEVAN,
Chairnutn,

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APPENDIX.
Bank of the United States, Feb. 1st, 1833.
SIR: In the report of the Committee of Exchange which I had
the honor to transmit to you on the 29th ultimo, it was stated that
the whole amount of the three per cent stock purchased and deferred under the arrangement with Messrs. Baring, Brothers
& Co., was
&4,i75,OOO
Of which certificates had been received to the
amount of
1,524,000
Leaving
£2,651,000
I have now the honour to inform you that since my
letter of the 29th ultimo, the Bank has received
certificates for
575,000
Leaving
82,076,000
And also has received a duplicate of a letter, the
original of which is on board the ship Hannibal,
containing certificates to the amount of 482,731
And is further advised that there are on
board the North America, the packet of
the 16th December, certificates to the
amount of
370,000
852,731
Making the total amount of the purchased and deferred stock, not actually paid, or of which advices
have not yet been received
1,223,269
Presuming that you would desire to have the latest information
in regard to the subject of your enquiry, I venture to trouble you
with this statement, and will only add that I am
Very respectfully, yours,
N. BIDDLE, President.
Hon. G. C. VERPLANOK,

Chairman Com. W. and M.t Washington.
Bank of the United States, Feb. 5th, 1833.
SIR: Since my letter to you of the first inst. I have received
further information from Messrs. Baring, Brothers & Co., that
out of the amount of Three per cent stock postponed by them,
the sum of 81)468,099 47 has been forwarded by various conveyances, so as to reduce the amount of the certificates of that stock
now outstanding to 8918,381 98.
I have the honor to be, very respectfully, yours,
N. BIDDLE, President.
Hon. G. C. VERPLANCK,
Chairman of Committee of W. and M.t Washington, D. C

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Bank of the U. Stales, Ito. 8, 1835.
SIR: Presuming that you are desirous of having the latest advices
«>f the progress of the Three Per Cents, I have the honor to inform
you that of the whole amount of that stock purchased and deferred
by Messrs. Baring, Brothers & Co. which was
84,175,029 02
The Bank has received the whole of the purchased certificates amounting to g 1,798,547 57
And also has actually received of
the deferred
1,190,927 53
And is advised of the transmission
of certificates now on their way
amounting to
320,204 68
Making an aggregate of
3,309,679 78
Leaving of those certificates outstanding
£865,349 34
I have the honor to be, very respectfully, yours,
N. BIDDLE, President.
Hon. G. C. VERPLANCK,
Chairman Com. W. fy M. Washington, D. C.

Postponement of the Three Per Cents in March 1832.
[CONFIDENTIAL.]

Treasury Department, March 24/A, 1832.
DEAR SIR: It is believed that the means of the Treasury will be
sufficient to discharge one half of the three per cents on the 1st
of July next; and it is proposed to give notice accordingly, on the
1st of April. It is not intended to determine, by lot, the certificates that are to be paid, but simply to pay one-half of every certificate on presentation at the proper loan office.
If any objection occurs to you, either as to the amount or as to
the mode of payment, I will thank you to suggest it.
I shall be glad to be informed of the amount purchased under
your direction; though it is not perceived that it can have any influence on the proposed measure.
As the purchases will cease on the appearance of the notice, t
may be as well for you to direct the amount to be closed with the
termination of the present month, and reudered to the Treasury for
settlement.
I am, dear sir, very sincerely and resp'y, yours,
ASBURY DICKENS,
Acting See'y of the Treasury.
N. BIDDLE, Esq.
President of the Bank of the United States.

Bank of the United States, March 29<A, 1833.
SIR: I have received from the Acting Secretary of the Treasury,
a letter of the 24th instant, apprising me that it is proposed to

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give notice on the first of next month, of the intention of the Government to discharge one-half of each certificate, at the proper
loan office; and he has the goodness to add, that if any objection
occurs to me, either as to the amount or as to the mode of payment, he would thank me to suggest it.
In reply, I have the honor to state, that so far as the Bank is
concerned, no objection occurs to me; it being sufficient that the
Government has the necessary amount of funds in the Bank to
make the contemplated payment.
In regard, however, to the community generally, and more especially to the debtors of the Government, there is a view of the
subject which the inquiry renders it proper for me to present to
your consideration. It is this: Owing to a variety of causes, but
mainly to the great amount of duties payable for the last few
months, there has been a pressure upon the mercantile classes,
who have been obliged to make great efforts to comply with their
engagements to the Government. That pressure still continues;
and as it may be prolonged by the same cause—the amount of
duties still payable during the next three months—this state of
things seems to recommend all the forbearance and indulgence to
the debtors which can be safely conceded. The inconvenience
then, of the proposed measure is, that the repayment of six or
seven millions of dollars, more than one-half of which is held in
Europe, may create a demand for the remittance of these funds,
which would operate injuriously on the community, and byabridging the facilities which the debtors of the Government are
in the habit of receiving from the Bank, may endanger the punctual payment of the revenue, as the Bank will necessarily be
obliged to commence early its preparations for the reimbursement
of so large an amount of public debt. My impression, therefore,
is, that with a view to the safe and punctual collection of the public revenue, the Government would be benefited by postponing
the proposed payment of the public debt to another quarter; at
which time the country will sustain less inconvenience from the
demands on foreign account, than would be felt at this moment.
In regard to the mode of payment, I should think it would be
more agreeable to the stockholder to receive reimbursement of the
whole amount of his certificate at one time, than to have it divided.
These suggestions are very respectfully submitted to your better
judgment, by your obdt. serv't,
N. BIDDLE, President.
Hon. Louis M'LANE,
Secretary of the Treasury, Washington, D. C.

P. S. As an illustration of the effect of the measure proposed,
I may mention that, in the month of February last, the collector
of New York, with a laudable anxiety to protect the public revenue, applied to the bank to authorize an extension of loans in that
city, in order to assist the debtors to the Government. This was
promptly done. This I should desire to do again, as the payment to the Government during the next quarter will probably be
very large.
N. B.

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The circumstance alluded to in the preceding postscript
is explained in the following correspondence.
Bank of the United States, Feb. 28th, 1832.
DEAR SIB: Your two favors of the 25th and 27th inst, have
been duly received, and it is very gratifying to learn from them
that your operations on Saturday last have contributed to relieve
some of the pressure on the money market. You are perfectly
aware that the situation of the country as well as of the Bank, is
one of peculiar delicacy. The large importations of the past
year are to be paid for by a crop comparatively small in amount,
diminished in value, and brought forward at a period unusually
late. The disproportion between the debts and the means of the
country is increased by the amount of Government stock which
it is proposed to reimburse, a very large part of which is held in
Europe. This concurrence of circumstances, imposes on the
Bank the necessity of great circumspection and reserve in its
loans, any considerable extension of which would not only place
beyond its reach the funds destined for the payments on account
of the Government, but ultimately produce a severer pressure
than that which the increase itself was destined to relieve.
It is, however impossible not to feel very great anxiety to prevent any embarrassment or calamity in the community which the
Bank has it in its power to avert, or mitigate, and no exertion
should be spared to accomplish this necessary measure; the transition from a state of abundance to one of comparative scarcity
of money, with all the gentleness consistent with the safety of the
Bank and the community. The application of your funds to the
purchase of foreign exchange, has the double advantage of giving
relief in quarters where it is most calculated to be diffused, and to
be most extensively useful, while at the same time it furnishes the
means of paying the foreign creditors of the Government. This
and the discount of short business paper falling due about the periods when the payments on account of the Government are next
to be made, furnish the two best channels through which the accommodation which the Office has it within its power to afford,
can reach the community. Having thus explained the situation
and views of the Bank, I have only to add, that if in the prosecution of this last measure, the discount of short business paper, the
loans should in some degree exceed your income for a short time,
we shall consider it as a temporary step to protect the community, with whose welfare, the Bank is so identified; and trust that
it will not be extended either in amount or duration beyond the
emergency which seems to call for it.
Very respectfully, yours,
N. BIDDLE, President.
ISAAC LAWRENCE, Esq.

President Office Dis. and Dep., New York.

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The course here recommended of purchasing foreign exchange
and increasing the discounts was carried into execution. The
amount of foreign exchange purchased from February 22 to
March 7, amounted to $396,506 SI; and the discounts were increased in the manner described in the following letters.
New York, February 29th> 1832.
DEAR SIR: Your letter of yesterday is received and read very
attentively to the Board, who appeared satisfied with its contents.
Our receipts were small this morning only $ 180,000, and our offering nearly $800,000. It was proposed we should extend a
little, as our receipts on next discount would exceed $300,000—
we discounted about $220,000. Balance due from the City
Banks $60,000.
Yours truly, &c.
ISAAC LAWRENCE, President.
N. BIDDLE, Esq.

Prtident Bank United States.

Extract of a letter from M. Robinson, Cashier of the Office of the
Bank of the United States at New York, dated 3d March 1832,
to Wm. Mllvaine, Cashier.
" Our discounts yesterday exceeded our receipts $60,000. The
Banks are in our debt $370,000."
From the Same to the Same, dated March 5th, 1832.
" Our discounts to day were about $20,000 more than our receipts. The Banks are in our debt $250,000."
From the Same to the Same, dated March 10th, 1832.
" Our discounts yesterday were $120,000 more than our receipts. The Banks are in our debt $730,000."
From the Same to the Same, dated March 12th, 1832.
u
Our discounts to-day were about $50,000 more than our receipts. The Banks are in our debt $600,000."
From the Same to the Same, dated March 19th, 1832.
"Our discounts to-day exceeded our receipts $120,000. The
Banks are in our debt $500,000."
From the Same to the Same, dated March 3d, 1832.
a
Our offering to-day $120,000—our receipts $70,000—discounts $110,000. The Banks are in our debt $485,000."
From the Same to the Same, dated March 2Sd, 1832.
"Our offering to day $160,000—receipts $110,000, and discounts $150,000. The Banks are in our debt $420,000."
From the kame to the Same, dated March 30th, 1832.
" Our discounts to-day about $80,000 more than our receipts.
The Banks are in our debt $166,000."

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Postponement of the Three per Cents in Europe.
Treasury Department, July \9thy 1832.
SIR: It was not until to-day that I have been able to ascertain
the amount of the appropriations made at the last session of Congress; and, therefore, I have not been able to decide, before now,
upon the amount of the three per cents to be redeemed on the first
or October. I find, as was supposed when you were here, that
we shall be able to pay off about two-thirds at that time. A notice
will accordingly be given in to-morrow's papers for the payment of
that amount on the first of October, and the remaining one-third
on thefirstof January. This has been done with the understanding had between us, that, if it should happen that the public moneys are insufficient to complete those payments, the bank will
delay the presentation of any certificates of which it may have
the control, until the funds are sufficient to meet them; the interest to be paid by the United States during the interval.
You will be pleased to indicate such transfers of funds as may
be desirable, preparatory to the proposed payments.
I am, sir, very respectfully, your obedient servant,
LOUIS M'LANE,
Secretary of the Treasury.
N. BIDDLE,

Esq.

President of the Bank V. S.t Philadelphia.

Bank of the United States, My

26,1832.

SIR: I have had the honor of receiving your letter of the 19th
instant, apprising me of your intention to reimburse two-thirds of
the three per cents on the first of October, and the remaining
third on the first of January next. You further state that this
course " has been adopted with the understanding had between
us that, if it should happen that the public moneys are insufficient
to complete those payments, the Bank will delay the presentation
of any certificates of which it may have the control, until the
funds are sufficient to meet them; the interest to be paid by the
United States during the interval."
The Bank has taken the necessary steps to obtain the control
of a considerable portion of these certificates, and will very
cheerfully employ it in such a manner as may best suit the convenience of the Government.
I have the honor to be, very respectfully, yours,
N. BIDDLE, President.
Hon. Louis M'LANE,
Secretary of the Treasury, Washington, D. C.

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Similar Postponement in 1820.
Bank of the United States, Oct. \Oth, 1820.
The Board met agreeably to adjournment.
PRESENT—Langdon Cheves, President; Messrs. Eyre, Rundle,
Lippincott, Willing, Astley, Wetherill, Kuhn, Weir, and Potter.
The President laid before the Board a private correspondence
between him and Edward Jones, Esq., Chief Clerk of the Treasury Department of the United States, acting for the Secretary of
the Treasury, in which that officer states that the Treasury will
not have the means of paying the balance of the Louisiana stock
redeemable on the 21st inst. and requests to know whether the
Bank can advance the amount to the holders of the stock or their
Agents in such a manner as to save the public credit, and to
satisfy the holders. The President also laid before the Board the
following case which he had submitted to able counsel, and who
had given it as their clear and unequivocal opinion, that the
transaction proposed would be consistent with the provisions
of the charter.
CASE.

The Government will be unable from a deficit in the supplies
of the year, to pay the portion of the Louisiana stock which is
due on the 21st of October next, and as it has given notice that it
will then be paid off; and, as indeed, the obligation is by treaty
imperative, the gentleman acting for the Secretary of the Treasury, who is absent, has applied to the Bank of the United States
to aid the Government in this difficulty. The Bank has the pecuniary ability, and is desirous of affording the aid requested.
But the Charter prohibits a Loan to the Government to a greater
amount than half a million of dollars. The Bank, however, proposes to accomplish the object of saving the public credit from
dishonor in the following manner. The Cashier of the Bank,
not as the Agent of the Bank, but as the Agent of Baring, Brothers & Co., holds a power to receive the sum under their control,
which amounts to three-fourths of the whole sum to be paid off.
A gentleman in Philadelphia, known to the Bank, it is morally certain will be authorized to receive this money from the Cashier
or the Bank, in which, if received, it would be deposited, with instructions to remit the same to Europe. It is proposed that the
Attorney shall demand payment, as an act of legal form, to prevent interest from ceasing on the original contract of Government, and the Government, not having the funds to make the payment, will of course, refuse, but this refusal will be only known to
the parties, and will not at all affect the public credit. The Bank
will then, as its voluntary act, advance the amount to the Agent,
taking from him an order on the Attorney for the amount of the
stock when received by him, as its means of reimbursement, with
a stipulation on his part that the Bank shall receive the accruing

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31
interest on the stock as an equivalent for the use of the money
loaned or advanced to his principals.
It is supposed this course will avoid all collision with the
Charter. There will be no new contract with the Government either by the Bank or the holder of the stock. There will
be no loan or advance to or for the use of the Government.
Its sole obligation will be under its original unvaried contract.
The public credit will indeed be saved from disgrace by the Bank,
and it will be the result of an understanding between the agents
of the Bank and the agents of the Government. But that understanding will be that the Bank shall loan or advance to an individual, for the use of the individual, on the security of the stock.
Quere—Is there any thing in the charter of the Bank which
forbids this transaction?
He also stated that Thomas M. Willing, Esq. had the control of
about gl,500,000 of the said stock, whereupon it was
Resolved, That the President be authorized to confer with Mr.
Willing, and to arrange with him a loan to him, as the Agent of
the holders of the stock, according to the principles of the above
case, and that he report to the Board at its next meeting.
Adjourned.
Bank of the United States, Oct. \3th, 1820.
The Board met agreeably to adjournment.
PRESENT—Langdon Cheves, President; Messrs. Biddle, Eyre,
Rundle, Lippincott, Colhoun, Schott, Astley, Kuhn, Weir, Potter
and Hoffman.
The President in compliance with the resolution passed at the
last meeting of the Board, made the following Report, which was
adopted, viz:
Under the order of the Board of the 10th instant, I have conferred with Thomas M. Willing, Esq. on the subject of a loan or
advance to him, as the Agent of the holders of about 81,500,000
of the instalment of the Louisiana stock payable on the 21st inst.
I have found on investigation that the Cashier of the Bank holds
powers to receive from the Government the instalment on the
principal sum of only about 81,490,000, or a present payment of
about 8264,270, and that Mr. Willing holds powers to receive the
balance of the above sum of 81*500,000, as well as a power to receive from the Cashier the sum immediately receivable by him, as
per the following statement furnished by Mr. Willing.
85,000,000 held by Hope & Co., De Smith, and W.
& J. W illink, and by Hope & Co., and Sir
F. Baring & Co., the interest on which
has been paid in Holland. Last instalment 23 per cent is to be paid to T. M.
Willing, Attorney, say
81,150,000
The certificates of stock are not received,
but are soon expected to arrive.

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Brought over.
g 1, i50,000
Si,149,000 In the names of Sir F. Baring & Co.,
power with the Cashier to receive the
last instalment with the certificates, 2.3
percent is
264,270
8325,000 in the names of Alexander Baring, Henry
Baring and others, Executors and trustees
of the estate of the late Wm. Bingham—
Certificates in the hands of T. M. Willing,
one of the Executors, &c.,23 per cent, is
74,750
8 J,489,020
$65,000 more will be sent out by Messrs. Baring,
to T. M. Willing, 23 per cent, is

14,950

Total,
gl,5O3,97O
It will be perceived from this statement that the certificates of
the stock (which are necessary to authorize a demand for the final
instalment) have not yet been received for any other sums than
those for which the Cashier of the Bank holds powers—though
J h others may be soon expected.
Le
Under these circumstances, Mr. Willing has agreed that he will
accept for the use of his principals a loan for the sum which shall
*be under his control according to the principles of the case on
which the opinion of counsel has been obtained, and which was
* laid before the Board at its last meeting, with the following explanations and conditions, to wit:
1st. That the loan or advance is not to be asked or accepted
except for such portions or sums, of which the certificates shall
have been received, and the demand on the Treasury formally
made.
2d. That the Bank shall not demand any other or further interest or consideration for the loan or advance to him than the interest which shall actually be received from the Government on
the stock on which he shall receive such loan or advance.
3d. That the Secretary of the Treasury, or, in his absence, the
President of the United States, shall in his official character, expressly agree, on demand of payment and failure to receive the
same, that the Government shall pay interest, in the United States,
to the holders of the stock, or their legal attornies on the said
stock, according to the tenor and effect of the original certificates,
until paid; and, that the said stock shall be actually redeemed on,
or before, the 21st of April next.
Extract from the minutes.
Bank of the United States, July \7th, 1832.
GENTLEMEN,—Being desirous of making some arrangement in
regard to the reimbursement of the three per cent stocks of the
United States, and the time being too short to allow of prolonged

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33
correspondence, we have requested Thomas Cadwalader, esquire,
to confer with you on the subject. Mr. Cadwalader has been
long, and still is, a Director of the Bank, enjoying its entire confidence, and is personally well known to you. I will, therefore,
merely refer you to him for particulars; and remain,
Very respectfully, yours, &c.
N. BIDDLE, President.
Messrs. BARING, BROTHERS & Co., London,

Bank of the United States, July \Sth> 1832.
DEAR SIR,—The probability that the spread of the Cholera
may occasion great embarrassment and distress in the community, makes it expedient for the Bank to keep itself in an attitude
to afford relief, should its interposition be necessary, and also to
mitigate the pressure which the reimbursement of the three per
cent stock, held by foreigners, may produce in October next.
The whole amount of this foreign stock is about 87,800,000, of
which the Bank is desirous of postponing the payment of about
85,000,000. You will perceive, from the statement accompany-"
ing this letter, that the Bank is the agent of Messrs. Baring,
Brothers & Co., for upwards of three millions. For the postponement of that amount, with an additional sum of two millions
belonging to residents in Europe, you are authorized to make an
arrangement on the following terms:
1st. As to the time. It is not yet positively decided when the
whole of the threes will be paid, and the proposed arrangement
must therefore refer to that contingency, and be so modified as to
fix a certain time after the period of redemption named by the
Treasury. You may make this postponement for six, nine, or
twelve months after that period, and endeavour to preserve such
an option as to time, as may enable the Bank to diffuse the payment over as wide a period as possible of the term.
2d. As to the rate of interest. We presume, of course, that
there will be no difficulty in continuing the loan, at its present
rate of three per cent, without any further charge. Should you,
however, find it more advantageous, instead of making the arrangements personally with the stockholders themselves, to employ the agency of any mercantile house to effect the object, you
are authorized to allow a reasonable commission for their trouble. As you have already concluded, very satisfactorily, a similar arrangement, some years ago, and our personal interviews
have made you very familiar with the whole subject, I will
add, only, that
I am, very truly, yours,
N. BIDDLE, President.
THOMAS CADWALADER, Esq.,

Philadelphia.
B

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Philadelphia, July 23d, 1832.
DEAR SIR: The day after you left Philadelphia, I received a
communication from the Secretary of the Treasury, apprising
me of his intention of paying two-thirds of the three per cents on
the first of October, and the remaining third on the first of January next. The mail of to-day has brought the official notice to
that effect, a copy of which is inclosed.
I hasten to give you the earliest information on the subject, as
it will have an important bearing on the negotiation with which
you are charged. The first effect of it will be, that as the foreign
stockholders will receive not the whole of their payment, but only
two-thirds of it, they will not be able to make as satisfactory an
investment as they otherwise would, being obliged to divide it
into two separate investments, and of course they will be more
disposed to make an arrangement by which they may receive
their interest on the two-thirds, until the remaining third is paid,
so as to make one investment of the whole.
The subdivision, by weakening the expected pressure on the
first of October, makes the Bank less anxious about that event.
But in the present state of the country, while the whole monied
concerns of the community are threatened with confusion by the
spread of the pestilence, the Bank is so desirous of keeping itself
in an attitude of great strength, to interpose, if necessary, for the
relief of the sufferers, that it is content to submit to any merely
pecuniary sacrifice to secure that object. The notice of the Secretary of the Treasury will therefore make no difference in your
instructions as they are so shaped as to provide for this contingency, by making the postponement to a certain term after the
payment whenever that may occur. Very truly yours,
N. B1DDLE, President.
THOMAS CADWALADER, Esq.,

London.

London, August 22, 1832.
SIR: We have had the honour of receiving, from the hands of
Mr. Cadwalader, the letter with which you favoured us on the 18th
ultimo, and in which you refer us to that gentleman for the particulars of an arrangement the Institution was desirous of entering
into in regard to the reimbursement of the United States' three
per cent stock. You will no doubt learn from Mr. Cadwalader,
that no time has been lost in coming to an understanding with us
as to the mode in which your views could be carried into effect;
and the result of our communications with him has been a contract, of which, as he will no doubt send you a copy, it is not necessary we should say more than that we trust the Board will
perceive in it evidence of that earnest desire we at all times feel
to put all our transactions with them on the same easy and liberal
footing.
We trust you will excuse our observing that we conceive no
question can now arise as to any extension of .the ordinary credit
which we hold at the disposal of the bank, as the liability to be

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called upon for large advances, for the above operation, either in
the shape of drafts or purchases of stock, makes it absolutely necessary that the limit should be strictly attended to.
W e have only to add, that we feel much flattered at this further
proof of our possessing the confidence of the Institution; and
have the honour to be, sir, Your obedient servants,
BARING, BROTHERS & Co.
N. BIDDLE, Esq.

President United States Bank, Philadelphia.
Extract of a letter from Thomas Cadwaladery Esq. to the President
of the Bank, dated London, 9£d August, 1832.
" I did not get my baggage on shore and clear of the Custom
House till late on the afternoon of the 16th inst., and I reached
this city on Sunday morning the 19th inst. On the 20th, I had a
conference with the acting members of the House of Messrs.
Baring, Brothers & Co., (Messrs. Mildmay and Bates), and afier
sundry discussions on that day and yesterday, the heads of an
agreement were framed, and approved of by the other members
of the House, to be put into shape, and to be signed to day. I
have drawn up the contract accordingly, of which 1 do not send
you a copy, as there may be some alteration in form or verbiage, and
the hours of business are so late and short in this great city, that it is
not probable a transcript can be made in time for this mail.
London, 30th August, 1832.
SIR: In consequence of the personal communications we have
received from General Cadwalader, we beg leave to inform you
that we have secured and paid for the following parcels of United
States' three per cent stock, viz.
820,000")
100,000 f
25,000 f a t *°
25,OOOJ
21,000 at 90*
80,000 at 91
8271,000
And we have also made the following purchases, to be delivered
immediately, viz.
810,000
*
*
27,400
. at 90$
66,037 25
4
100,000
200,000
200,000
20,000
8623,437 25 to be delivered before 6th September.

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We enclose a list of proprietors of United States' three per
cent stock, who have consented to postpone the receipt of their
principal till first October, 1833, the amount of their stock being
collectively 8342,646 68.
As we are not acquainted with the manner in which the Institution may desire to have these transactions managed, we have
adopted the course of addressing you on the subject, that you
may dispose of the accounts, &c. as you may deem expedient.
We have the honor to be, your most obedient servants,
BARING, BROTHERS & Co.
N. BIDDLE, Esq.

President Bank United States, Philadelphia.

London, 6th September, 1832.

SIR: We confirm what we had the honour to write to you on
the 30th ult., and now annex a list of other proprietors of United
States' three per cent stock, who wish to postpone the reimbursement of capital till October, 1833, making a total, with those
already advised, of 81,609,707 42, purchases of the United States'
three per cent stock, on account of the Institution. We conclude
it may be more convenient to you to have the whole purchases
up to the present date presented to the eye at one view, and we
therefore enclose a detailed list, showing the total amount to be
$1,051,251 31
And purchases, but not yet delivered,
364,994 05
We remain sir, your obedient servants,
B. B. & Co.
N. BIDDLE, Esq. Philadelphia.
CONTRACT.
Messrs. Baring, Brothers & Co. of London, and Thomas Cadwalader, of Philadelphia, on behalf of the Bank of the United
States, agree, as follows, viz: For a commission of one half per
cent on the amount, the said Baring, Brothers & Co., agree,
1st. To invite the holders of the three per cent stock of the
United States, to retain their stock until October, A. D. one thousand eight hundred and thirty-three; the Bank engaging to pay
the interest quarterly, until that time.
2d. To buy up the said three per cent stocks on the best terms
at which they can be obtained, both here and in Holland, at prices
not exceeding ninety-one per cent or as much higher as the running quarterly interest, in case of need. The cost of which stocks
to be placed to the debit of the Bank of the United States, in a
separate account, chargeable with whatever rate of interest
Messrs. Baring, Brothers & Co.may be compelled to pay. The

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certificates of stock so purchased to remain with Messrs. Baring,
Brothers & Co.
3d. In case the amount of stocks so purchased, and the amount
that may be retained by the holders, as above, should, together, be
less than the sum of five millions of dollars, then Messrs. Baring,
Brothers & Co. agree to make up the deficiency, in case the Bank
should find it desirable to draw for such deficiency, or any part
thereof—on which sum or deficiency, Messrs. Baring, Brothers &
Co. to charge the same interest as in their general account with
the Bank. The whole advances to be reimbursed by the Bank of
the United States, in October, A. D. one thousand eight hundred
and thirty-three.
Witness the hands of the said parties, at the city of London,
the 22d day of August, A. D. one thousand eight hundred and
thirty-two.
BARING, BROTHERS & Co.
T. CADWALADER.
Signed in presence of us,
JAMES STEWART RINGER,
FRAS. WM. GENTRY.

Bank of the United States, October 15,1832.
had the pleasure of receiving your esteemed
favors of the 22d and 30th of August, and 6th ultimo, and have
been placed, by Mr. Cadwalader, in possession of the contract
between him and your house, on the 22d of August last.
The care and attention which you have been good enough to exhibit on this occasion, furnish a new evidence of the zeal to promote the interests of the Bank which has uniformly characterized your house, and which has been always appreciated.
As you remark in your letter of the 30th of August, that you
wish to have the accounts disposed of as the Bank may deem expedient, I take the earliest opportunity of inviting your attention
to one part of the arrangement with which it will be impracticable for the bank to comply.
When the Institution was chartered, at the close of the last
war, the Government had a large debt which it proposed to pay,
or to purchase up out of the surplus revenue^ and in order to prevent any competition in these purchases, the charter expressly
declares that " the bank shall not be at liberty to purchase any
public debt whatsoever." The object of this provision would
certainly not be counteracted by the present operation, since the
Government has actually advertised the payment of the stock,
which is thus, in fact, no longer an object of purchase by the sinking fund. This circumstance, it probably was, which induced
Mr. Cadwalader to regard the purchase of public debt, so situated,
as not conflicting with the provisions of the charter. When, howGENTLEMEN: I have

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38
ever, the stock was purchased in August and September last, it
was still a subsisting debt. One third of it will so continue until
the first of January next, and even were the case less clear than it
seems, the Institution is, both from inclination and duty, disposed
to give the most rigorous construction to its own powers. I am
under the necessity, therefore, of apprising you, that the Bank
cannot consider as purchased, on its own account, the three per
cent stock reported by you, in your favors of the 30th August and
sixth ultimo, amounting to $1,474,827 33, and I have now to propose, for your consideration, the following substitute for that arrangement, which will, I trust, be mutually agreeable to both
parties.
1st. It will be necessary to transmit, without delay, the whole
of the certificates, with power of reimbursement, so that, in the
first instance, the Bank may receive payment for the owners.
Without such payment, the Bank is not in actual possession of the
funds, which will not be passed to its credit until paid to the
stockholders. This seems to be of immediate urgency, and I
therefore request your early attention to it.
2d. When the stock is thus reimbursed to the stockholders, the
portion which they have consented to postpone will be passed to
their credit on the books of the Bank, and continue to bear an interest of three per cent, per annum, payable quarterly, until the
first of October next, when the principal will be reimbursed. If
it be necessary, on the delivery to you of the certificates, with powers of reimbursement, to substitute some other certificates on
your part, as was done in the case of the Louisiana debt by you,
you are hereby authorized to give to the parties a certificate for
an amount equal to what they respectively surrender to you.
3d. The portion purchased by you will, in like manner, go to
your credit, when it is paid by the Government. At that time, it
will be for you to determine whether it shall continue to draw an
interest of four per cent, (if that be the rate) payable quarterly,
or whether you would desire immediate payment. If your arrangements with others make it necessary or expedient for you to
continue the loan to the bank for that period, we shall, with great
cheerfulness, acquiesce in your views. If however, it should be
as consistent with your interest to receive reimbursement, the
Bank will be ready and willing to make it immediately. I mention
this, because it may, perhaps, be convenient for you to provide
funds in New Orleans for the instalments of the loan to the Union
Bank, in which event you may consider the whole amount of your
purchases of three per cents, or any portion of it, as immediately applicable to that object.
The wish to postpone the payment of some portion of the
fifteen millions reimbursable between the first of October and the
first of January, arose from the appearance of the Cholera, which
threatened to throw the business of the country into great confusion, and imposed on the Bank the duty of keeping itself in an attitude of great strength, so as to interpose, if necessary, to relieve

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39
the community. The calamity having passed, with less injury to
the mercantile classes than was anticipated, the Bank will not be
called upon for any extraordinary effort, and would be content to
pay at once, the whole amount now in your hands. This would
have the further recommendation, that it would relieve you from
the payment of interest on the balance, which is probably equal to
your purchases.
In either event, whether you wish to take immediate reimbursement, or continue the loan, it is presumed that the terms of
the purchases will, under this change of the arrangement, be favorable to your interest, which we are always anxious to promote. Should it, however, happen that any pecuniary loss shall
be sustained by you, in consequence of these purchases, the Bank
will, of course, make an ample indemnity for it. The commission stipulated upon the whole sum will not be, in any degree, affected by this change, but will continue as originally determined
between Mr. Cadwalader and yourselves. You will readily believe that nothing but an imperious sense of duty would induce
the Institution to propose the changes in the arrangement, and we
must rely on your habitual courtesy to excuse any additional
trouble which they may occasion.
With great respect, yours,
N. BIDDLE, President.
Messrs. BARING, BROTHERS & Co., London,

Bank of the United States, October 19,1832.
The above is a copy of my respects of the 15th
inst., since which, I have had the pleasure of receiving, this morning, your favor of the 14th ultimo. To what I had the honor of
writing on the 15th instant, the only addition which it seems necessarry to make, is this: the Bank in order to close the account
with the Government, is anxious to obtain the certificates. It is,
however, possible that some of the holders who have agreed to the
postponement may prefer retaining the certificates, till the period
offinalreimbursement. The Bank is very unwilling to give either
to these stockholders or to yourselves any unnecessary trouble, and
should youfindany reluctance on this score, you will please not to
urge it, but leave the certificates in the hands of the stockholders,
and we will endeavor to accomplish the object of the Bank without possession of the certificates. Those for the stock purchased
by yourselves, we shall be happy to receive by an early opportunity.
With great respect, yours,
N. BIDDLE, President.
GENTLEMEN:

Messrs. BARING, BROTHERS & Co., London.

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Bank of the United States, October 31*/, 1832.
My last respects were of the 19th instant: since
then we have understood that the Treasury Department is desirous of closing the accounts of the foreign holders of three per
cents; a circumstance which increases our own anxiety to receive
the certificates without delay, and induces me to request that you
will have the goodness to give every facility to the transmission
of them.
In regard to those purchased by yourselves, there can, we presume, be no difficulty; and as to those stockholders with whom
you have agreed to postpone the payment, you will find, we trust,
no indisposition to make the arrangements suggested in my letter
of the 15th instant, for the delivery of their certificates. Should,
however, any difficulty occur, it would be agreeable to the Bank
if you could obviate it, either by causing the certificates to be
sent to the Bank for immediate reimbursement, or, if necessary,
by purchasing the certificates on your own account, in the same
manner as was done with those previously purchased, and taking
your reimbursement in the mode most agreeable to yourselves.
The whole subject is committed to your good judgment, with the
respects of,
Your obedient servant,
N. BIDDLE, President.
GENTLEMEN:

Messrs. BARING, BROTHERS & Co., London.

Bank of the United States, October 27th, 1832.
DEAR SIR: Having, in conversation to-day with Mr. Dickens,
explained the arrangements in progress for the payment of the
three per cents, he suggested that it would be agreeable to you
to receive the same information. I therefore communicate it
with great pleasure.
You are aware that the amount of public debt to be reimbursed
within the three months from October to January, is upwards of
fifteen millions, of which between eight and nine millions are held
by foreigners. Under the most favourable circumstances, the
displacement and conversion of so large a capital, requ're great
circumspection to avoid injury to the community. To concentrate so many scattered fragments of revenue at the points of
disbursement; to reserve a great accumulation of funds, always
at immediate command, yet not withdrawn from the public
service; to prevent a scarcity of money, followed by a sudden
abundance of it; and thus keep undisturbed the uniform current
of business—these are objects to which the Bank has always
given a very anxious attention. Their inherent difficulty was increased, on the present occasion, by the prevalence of the Cholera,
which was already in New York and Philadelphia, and seemed
destined to pervade the whole country, deranging, in its progress,

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*11 the relations of business, and threatening such a general pros*
tration of commerce, as would endanger the punctuality of private
engagements, and put to great hazard the public revenue, of
which the estimated receipts, from July to January, were about
thirteen millions. To those who witnessed its ravages, it was
manifest that a continuance of the pestilence, for a few weeks
longer, would have thrown into great confusion the pecuniary
affairs of the country; and have pressed, with peculiar force, on
the public revenue, more especially as the demand on account of
the foreign holders of three per cents at New York and Philadelphia alone, on the first of October, would have exceeded five mil"
lions of dollars. Under these circumstances, the Bank deemed it
an imperious duty to avert, as far as possible, the effects of such
a calamity, and to husband its means, in order to interpose, if
necessary, for the relief of the community. It was determined,
therefore, to reserve five millions of dollars for that purpose;
and accordingly, the foreign holders of the three per cents to
that amount, principally represented by the Bank as their agent,
were invited to leave the fund with the Bank for a few months
after the payment by the Government, receiving from the Bank
the same rate of interest. In the mean time, the funds for the
payment of the five millions were accumulated in the Bank, to be
used as occasion might require.
Immediately on learning that the arrangement for this post*
ponement was in part effected, the Bank was enabled to resume
and increase its accommodations to the public5 and when, by the
blessing of Providence, the pestilence was arrested without having required any extraordinary interposition on the part of the
Bank, measures were taken to pay off immediately the whole of
the three per cents, which it was originally intended to postpone,
so far as they may be within the reach of the Bank. Those measures are in progress, and they will now be hastened; since I
learn, from Mr. Dickens, that the department is desirous of
closing the account as soon as possible. The certificates will no
doubt be transmitted without delay, and will be immediately
paid.
The preparations for the payments in January, are already in
such a state of forwardness, that we may safely calculate on the
result which the Bank has been anxious to produce, which is,
that, in the course of the twelve months from January, 1832, to
January, 1833, about twenty-three millions of the public debt will
have been discharged, without causing the least perceptible disturbance of the business of the country.
Presuming that it may interest you, I inclose a copy of the cor*
respondence on the subject of the three per cents, and also a
copy of a letter to the office at New York, similar, in tenor,
to those written to several other offices, on being apprised of
the arrangement with the European holders of the three per
cents.
That arrangement, as you will perceive, was a precautionary
F

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measure to enable the Institution to mitigate the severity of a
great disaster; *pd» when the country was happily relieved from
it, the means which the Bank bad provided for tbe occasion, were
applied to their appropriate objects.
I have the honour to be, very respectfully, yours,
N. BIDDLE, President.
Hon. Louis M'LANE,
Secretary of the Treasury, Washington, D. C.

Treasury Department, October 31, 1832.

SIR: I have been duly favoured with your letter of the 27th instant, and its inclosures.
That I may be better able to understand the arrangement made
by the Bank, through the intervention of Mr. Cadwalader and
Messrs. Barings, in regard to the three per cents held abroad, I
will thank you for copies of the letters of the 22d and 30th of
August and 6th of September, and the contract of the 22d of August, all which are referred to in your letter to Messrs. Barings of the 15th instant.
I shall be glad, also, to be informed whether the certificates for
upwards of three millions, for which, in your letter to Mr. Cadwalader, of the 18th of July, you state the Bank to be the agent
of Messrs. Barings, have been forwarded at the loan office.
I am, sir, very respectfully, your obedient servant,
LOUIS M'LAME,
Secretary of the Treasury.
N. BIDDLE, Esq.

President Bank United States, Philadelphia.

Bank of the United States, Nov. 5th, 1832.

SIR: I had the honour of receiving, on the 3d inst, your letter
of the 31st ult., and, in compliance with the request contained in
it, enclose herewith copies of the letters from Messrs. Baring,
Brothers & Co., of the 22d and 30th of August and 6th September, and also a copy of the contract of the 22d August. I also
add a copy of my letter to Messrs. Baring, Brothers & Co., of the
31st ult.
In regard to the sum of three millions and upwards, of which
the Bank is the agent, its agency has hitherto been merely to receive the dividends, not the principal. Of that amount, there
have been surrendered certificates for about £344,000 on the books
at Philadelphia. The amount received at the other loan offices I
do not know. But the whole will, I presume, now shortly arrive.
I have the honor to be, very respectfully, yours,
N. BIDDLE, President.
Hon. Louis M'LANE,
Secretary of the Treasury, Washington, D. C.

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Relaxation of the restrictions on hearing of the arrangement in England.
Bank of the United States, Sept. 29th, 1832.

DEAR SIR: The preparations for the payment of the public
debt on the first of next month, being completed, the Board have
taken into consideration the practicability of modifying the instructions contained in my letter to you of the 31st of July last.
I am accordingly instructed to apprize you that you may resume
the purchase of domestic bills as heretofore, taking special care
to confine your purchases to bills growing out of real business,
and not having more than four months to run. This will of
course embrace those bills growing out of the letters of credit
from houses in the Atlantic cities of which the Cashier of the
Office speaks in his letter to me of the 15th ultimo. You will
understand that the Bank is not desirous on its own account that
you should purchase domestic bills to any extent, as its engagements for the first of January next are still heavy—and it is therefore more with a view to obviate any inconvenience which your
community may sustain from the want of this facility, that the
authority to purchase is now confided to the judgment and discretion of your Board. You will also be at liberty to check as formerly on the Bank.
Very respectfully, yours,
N. BIDDLE, President.
JOHN O'FALLON,

Esq.

President Office Dis. andDep. St. Louis, Missouri.

Bank of the United States, September 29th, 1832.

DEAR SIR: The preparations for the payment of the public
debt on the first of next month, being now completed, the Board
have taken the earliest opportunity of examining into the practicability of modifying the instructions contained in my letter to you
of the 27th of July, and I have now the pleasure of communicating to you their views as follows:
1st. After the receipt of this letter you will be at liberty to
draw checks on the Bank as formerly.
2d. You may resume the purchase of domestic bills, especially
on the Atlantic cities and New Orleans, giving particular attention to the purchase of such bills only as grow out of real business, and do not exceed four months to run from the time of purchase. The Bank has still many heavy engagements for the first
of January next, and does not therefore desire any considerable
extension of these purchases—but authorizes the resumption of
them in reference exclusively to the convenience of its customers
and the community near you.
3d. It is especially desired that these operations in exchange

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44
should be made to assist in the reduction of your local discount
line. The amount of your local discounts is at present beyond
what the Bank would wish it to be, and they prefer a gradual and
gentle reduction of it. This purpose can be more readily accomplished by the conversion of it into domestic bills than in any
other manner, and I would invite the particular attention of the
Board to it as furnishing the easiest means of reducing the debt of
the Office to the Bank which is now very considerable.
Hoping that you may find in these measures the advantages we
anticipate from them, their execution is left to the good judgment
of your Board. Very respectfully, yours,
N. BIDDLE, President*
JAMES RETNOLDS, Esq.

President Office Dis. and Dep. Cincinnati.
Same to
W. H. POPE, Esq.
President QffUe Dis. and Dep. Louisville, Kentucky.

Bank of the United States, Sept. 29th, 1832.
DEAR SIR.—The preparations for the payments of the public

debt on the first of next month being completed, the Board have
taken the earliest opportunity of authorizing you to resume the
purchase of domestic bills founded on the real business of the
country—and not having more than four months to run from the
time of purchase. As the engagements of the Bank for the first
of January are still heavy, the Board are not anxious for the sake
of the Bank, that you should extend your business, but have
adopted this measure in the hope that it might be the means of
averting any inconvenience from your citizens for the want of the
facilities hitherto afforded at this season. You will also consider yourselves as authorized to draw checks on the Bank as,
heretofore. Very respectfully, yours,
N. BIDDLE, President.
(* JOHN TILFORD, Esq.

President Office Dis. and Dep. Lexington, Kentucky,
Same to
A. BRAOKBNRIDGE, Esq.

President Office Dis. and Dep. Pittsburgh, Pa.

Extract from the minutes.
Bank of the United States, Nov. 9,
Stated Meetings.
PRESENT—N. Biddle, President; Messrs. Lippincott, Sullivan*
Rohlen, Pratt, Neff> Coleman, Bevan, Eyre> White> Henry..

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The President suggested the propriety of taking into consideration at a full meeting of the Board, the present situation of the
Bank, and the course of policy which it will be proper to
adopt in its future operations.
Whereupon it was on motion
Resolved, That the distant members of the Board be specially
invited to attend the meeting of Tuesday the 20th inst.
Bank of the United States, Nov. 20th, 1832.
PRESENT—N. Biddle, President; Messrs. Lippincott, Sullivan,
Campbell, M'Elderry, Bohlen, Pratt, Neff, Platt, Willing, Bevan
Eyre, White, Henry, Gilmor, M'Kim, jr., Carow.
It being the special order of the day under the resolution
adopted on the 9th inst. to take into consideration the situation of
the Bank and its future policy, the President explained in detail
the course of its operations during the past year, and the instructions under which the Offices are now acting, accompanied by
various statements from the books of the Bank, shewing the
amount of its investments at each point, and their gradual diminution, the amount of its circulation and specie, the progress made
in the payment of the Public Debt, #c.
Whereupon it was, on motion,
Resolved, That the subject of the state of the Bank, with the
papers submitted by the President to the Board, be referred to a
Committee consisting of the non-residant members, now present,
viz: Messrs. Carow, Campbell, MElderry, Gilmore and MKxm, in
conjunction with the Committee on the Offices.
Bank of the United States, Nov. 23d, 1832.
PRESENT—N. Biddle, President; Messrs. Lippincott, Sullivan,
Bohlen, Pratt, Neff, Eyre, White and Henry.
Mr. Eyre from the Committee appointed on the 20th instant to
take into consideration the situation of the Bank, and its future
policy, presented the following Report, with the remark that it
had been unanimously adopted by the Committee,

The Committee to whom was referred the subject of the state
of the Bank presented this day by the President, together with the
papers submitted by him to the Board, respectfully Report:
That after hearing the explanations made of the situation and
prospects of the Bank, they do not think it expedient to propose
any change in the general system of its operations. The tendency
of its measures henceforward should, in the opinion of the Committee, be to place its business in such a position, as while it is
perfectly safe in itself, might be readily changed, so as to enable
the Instituion either to continue and increase its operations or else
to close them without inconvenience to the community. For this
purpose the discounts of the Bank should not be increased, but,
as far as practicable, they should gradually and gently be converted from local discounts into the form of bills or exchange, an in-

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vestment, generally more secure, as well as more easily reduced
if required. The concerns of the Bank have been for some time
passing into that channel under the instructions of the Board,
and upon revising these instructions, the Committee think that
nothing more is necessary than to persevere in the course prescribed by them with such modifications as experience may suggest to the Board. This opinion, the result of the examination
confided to them, is contained in the following resolution which
they respectfully present to the Board.
Resolved, That it is inexpedient to make any change in the present system of the operations of the Bank.
ISAAC CAROW, Chairman.
Whereupon, on motion, it was
Resolved, That said Report and Resolution be adopted by this
Board.

Treasury Department, November 26th, 1832.
SIR: By the 15th article of the 1.1th section of the "Act to incorporate the subscribers to the Bank of the United States,*' approved the 10th of April, 1816, it is provided, " That the officer
at the head of the Treasury Department of the United States,
shall be furnished from time to time as often as he may require,
not exceeding once a week, with statements of the amount of the
capital stock of the said corporation, and of the debts due to the
same; of the moneys deposited therein; of the notes in circulation, and of the specie in hand; and shall have a right to inspect
such general accounts in the books of the Bank as shall relate to
the said statement: Provided, That this shall not be construed to
imply a right of inspecting the account of any private individual
or individuals with the Bank." Circumstances rendering it expedient that the inspection thus authorized should now be made, and
the duties of the Secretary of the Treasury rendering it impracticable for him to make it in person, I authorize and empower you
to make it in my stead, and on my behalf. With tins view, I transmit the last general statement furnished by the Bank, bearing date
the second instant. It is expected that the examination will be as
complete as the law authorizes, so as to ascertain the security
of the public moneys, and the solvency of the Bank. The President of the Bank will be informed of the duty which has been confided to you, an<l it is not doubted that he will afford you all necessary facilities.
In pursuing the examination which you are authorized to make,
ytou are requested to direct your attention particularly to the
state of the debt due to the western branches, and from persons
in the western country generally; and in ascertaining its amount,

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to inquire what amount of the domestic bills of exchange is due
in the western country; and, generally, how the western debt is
secured.
I am, sir, very respectfully,
Your obedient servant,
LOUIS M'LANE,
Secretary of the Treasury.
HENRY TOLAND,

Esq., Philadelphia.

Philadelphia, December 4th, 1832.
SIR: In pursuance of the request and authority contained in
your communication of the 26th ultimo, " to inspect such general accounts in the books of the Bank of the United States as
shall relate to the general monthly statement of its affairs," transmitted to me in your said letter; " Provided, That such authority
6hould not be construed to imply a right of inspecting the account of any private individual or individuals with the Bank;" I
called on the President of said Institution, who gave prompt directions to the officers to furnish me with any books or documents belonging to the Institution which I might consider material to such inspection. From the simplicity of the books of this
Institution, and from the familiarity with its business generally,
acquired by having been, at different periods, a director, I have
made all the investigations which appear to be embraced in your
letter, and have now the honour to hand you the enclosed Report
and Documents, numbered as at foot.
If there be any thing omittted by me, or any other information
desired, it will afford me pleasure to furnish it.
I have the honour to be
Very respectfully,
HENRY TOLAND.
Louis M'LANE, Esq.
Secretary of the Treasury, City of Washington,
Papers

Enclosed.

1st, Report.
2d. Documents numbered from A to M, inclusive.
3d. General Monthly Statement received from you, and now returned.
REPORT.
Philadelphia, tih December, 1833.
Taking the general monthly statement of the first November,
1832, as the basis of all my inquiries, I proceeded to examine it
by comparing the original statements on which it is based. It may
be remarked, that it is a mere compendium of the monthly statement of the Bank and its Branches, and as they are regularly

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transmitted, by law, to the Treasury Department, it is at all
times in your power to direct its verification under your own immediate eye.
As, however, the statement is, in its nature, very complicated)
and embraces a variety of matter of account not easily comprehended, I have presented two analyses of it, marked A, and B.
That marked B, shows, in a manner which cannot be misunderstood, the liabilities of the Bank to the public, and the assets of
the Bank to satisfy them. The former amount to 837,296,950 20,
and the fund to meet them 879,593,870 97, showing an excess of
042,296,920 77, to meet any demands on the Institution, as all its
liabilities must be first paid, in case of its insolvency or dissolution, before the stockholders can receive any part of their sub*
scription. Thus far I consider my Report as complying with that
part of your letter directing the investigation," so as to ascertain
the security of the public money, and the solvency of the Bank,"
neither of which can, in my opinion, admit of a doubt. Document marked C, exhibits, in a distinct manner, all the bills of
exchange purchased and on hand at the Offices of Pittsburgh,
Cincinnati, Lexington, Louisville, Nashville, St. Louis, Natchez,
New Orleans, and Mobile, and the places at which they are payable. Document marked D, shows the state of the discounts on
personal security and bills of exchange, at the Bank and its
Branches, during the last twelve months. Documents marked E,
F, and G, contain the reports of the Committee on the Offices,
under date of April 24th and 27th, July 27th, September 21st,
and 20th November, and illustrate the views of the Board of Directors as to the general business of the Bank and its Offices.
Documents marked H, I, K, L, and M, contain extracts of letters to and from the Cashier of the Bank, and the Cashiers of the
western offices, elucidating the course of trade with reference to
the bills of exchange, &c. &c. of the western country, and will be
useful to a right understanding of the great and increasing importance of that portion of the Union.
No opinion, to be relied on with any certainty, as to the security
of the debt due the Bank in the western country, could be given
by me, or any other person here; but, placing reliance on the
Cashiers of the different Offices, and the respectable gentlemen
composing their different Directions, and comparing the amounts
of suspended debt for years past, with the vast amount of business
and profit, and adding thereto my own knowledge of the general
business of the western country, I do not hesitate to say, that I
consider the debt in a safe and wholesome state, and that a greater
amount of loss need not be apprehended from it than from a similar mass distributed in the cities of the Atlantic frontier.
All of which is respectfully submitted.
HENRY TOLAND.
Louis M'LANE, Esq.
Secretary of the Treasury, City of Washington.

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