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O* THE
HON. HORACE
BINNEY,
ON T H E QUESTION OF
T H E REMOVAL OF T H E DEPOSITES.
BKLITKniD
I N T H E H O U S F OF R E P R E S E N T A T I V E S ,
JAHVAEI,
1854,
WASHINGTON:
TKINTED BY GAI-ES AND SBATON.
1834.
SPEECH.
T h e House having resumed the consideration of the motion to refer to the
Committee of Ways and Means the reasons s*ssignecl by the Secretary of
the Treasury for the removal of the public deposites, with Mr. M C D U F F I E ' S
motion for instructing* the committee to report a bill fur restoring them to
the Bank of the United State*,—
M r . B I N N E Y a d d r e s s e d t h e C h a i r to t h e following efleet:
Mr. SPEAKER:
T h e a m e n d m e n t offered b y t h e g e n t l e m a n from
S o u t h C a r o l i n a , [ M r . M C D L F F I E , ] p r o p o s e s to i n s t r u c t t h e C o m m i t t e e
o f W a y s a n d M e a n s ** to r e p o r t a j o i n t r e s o l u t i o n , providing;; t h a t t h e
p u b l i c r e v e n u e , h e r e a f t e r c o l l e c t e d , h e d e p o s i t e d in t h e B a n k of t h e
U n i t e d S t a t e s , in conformity with t h e p u b l i c faith, p l e d g e d in t h e
c h a r t e r of t h e said B a n k . 1 '
It* t h e r e f o r e , p r e s e n t s d i r e c t l y t h e q u e s tion of t h e sufficiency of t h e S e c r e t a r y ' s r e a s o n s for r e m o v i n g t h e
p u b l i c d e p o s i t e s from t h e B a n k , a n d for m a k i n g t h e future d e p o s i t e s
e l s e w h e r e ; a n d brings up for t h e c o n s i d e r a t i o n of this H o u s e e v e r y
t h i n g t h a t can b e a r u p o n t h e g r e a t t o p i c s of n a t i o n a l faith a n d p u b l i c
safety t h a t a r e involved in t h e issue.
I m e a n to discuss this g r e a t q u e s t i o n , sir, as I t h i n k it b e c o m e s m e
to discuss it, on m y first e n t r a n c e into this H o u s e ; as it would b e r
ooiue a n y one to discuss it, h a v i n g t h e ft^w r e l a t i o n s to e x t r e m e p a r t y
t h a t I h a v e , a n d b e i n g d e s i r o u s , for t h e s h o r t t i m e that h e m e a n s t o
b e c o n n e c t e d with t h e s t a t i o n , to d o o r o m i t n o t h i n g that shall be t h e
o c c a s i o n of painful r e t r o s p e c t .
I m e a n to d i s c u s s it as g r a v e l y a n d
t e m p e r a t e l y as I c a n : uot, sir, b e c a u s e it is not a fit s u b j e c t for t h e
m o s t a n i m a t e d a n d i m p a s s i o n e d a p p e a l s to e v e r y fear a n d h o p e t h a t
a p a t r i o t c a n e n t e r t a i n for his c o u n t r y — f o r I hold, without d o u b t , t h a t
it is s o , — b u t b e c a u s e , as t h e d e f e n c e «f t h e m e a s u r e to be e x a m i n e d
c o m e s to this H o u s e u n d e r t h e n a m e a n d in t h e guise of 44 Reason,**
I d e e m it fit to r e c e i v e it, a n d to t r y its p r e t e n s i o n s by t h e s t a n d a r d
t o w h i c h it a p p e a l s , I m e a n to e x a m i n e t h e S e c r e t a r y ' s p a p e r , a s
t h e friends of t h e m e a s u r e say it ought to be e x a m i n e d — t o t a k e t h e
facts a s he s t a t e s t h e m , unless in t h e s a m e p a p e r , or in o t h e r p a p e r s
p r o c e e d i n g from the s a m e a u t h o r i t y , t h e r e a r e c o n t r a d i c t i o n s ; a n d t h e n
I m u s t be allowed t h e e x e r c i s e of p r i v a t e j u d g m e n t u p o n t h e e v i d e n c e —
to t a k e t h e m o t i v e s a* t h e S e c r e t a r y alleges t h e m — t o a d d n o f a c t s ,
e x c e p t such as a r e n o t o r i o u s or i n c o n t e s t a b l e , a n d t h e n to a s k t h e
i m p a r t i a l j u d g m e n t of t h e H o u s e , up.on, m y a n s w e r .
T h e great practiS i r , t h e effort s e e m s to-4*c*" a l m o s t u n n e c e s s a r y .
cal a n s w e r is a l r e a d y g i v e n Iry t h e condition of the c o u n t r y . N o r e a s o n i n g in this H o u s e Can refute it; h'one is n e c e s s a r y to sustain it. I t
51
4
c o n i e s to u s , it is h o u r l y c o m i n g to u s , in t h e l a n g u a g e of t r u t h , a n d
s o b e r n e s s , a n d b i t t e r n e s s , from a l m o s t e v e r y q u a r t e r of t h e c o u n t r y ;
a n d , if a n y m a n is so blind to t h e r e a l i t i e s a r o u n d him as to c o n s i d e r
a l l this b u t a s a t h e a t r i c a l e x h i b i t i o n got u p b y t h e D a n k , or t h e f r i e n d s
o f t h e D a n k , t o t e r r i f y a n d d e c e i v e this n a t i o n , h e will c o n t i n u e b l i n d
to t h e m u n t i l t h e c a t a s t r o p h e of t h e g r e a t d r a m a shall m a k e his f a c u l t i e s as u s e l e s s for t h e c o r r e c t i o n of t h e e v i l , as t h e y n o w s e e m to b e
l o r its a p p r e h e n s i o n .
Air. S p e a k e r , t h e c h a n g e p r o d u c e d in this c o u n t r y , in t h e s h o r t
s p a c e of t h r e e m o n t h s , is w i t h o u t e x a m p l e ' in the history of this o r
a n y o t h e r nation*
T h e p a s t s u m m e r found t h e n e o p l e d e l i g h t e d o r
c o n t e n t e d w i t h the a p p a r e n t a d j u s t m e n t of s o m e of t h e most tearful
- c o n t r o v e r s i e s t h a t e v e r d i v i d e d them* T h e C h i e f M a g i s t r a t e of t h e
U n i o n had e n t e r e d u p o n his office for a n o t h e r t e r m , a n d w a s r e c e i v i n g m o r e t h a n the* h o n o r s of a R o m a n t r i u m p h from t h e h a p p y p e o p l e of t h e M i d d l e a n d N o r t h e r n S t a t e s , w i t h o u t d i s t i n c t i o n of p a r t y ,
a g e , or s e x .
N a t u r e p r o m i s e d to t h e h u s b a n d m a n a n e x u b e r a n t c r o p .
T r a d e w a s r e p l e n i s h i n g t h e coflers of t h e n a t i o n , a n d r e w a r d i n g t h e
m e r c h a n t ' s enterprise. T h e spindle, and the shuttle, and every instrum e n t of m e c h a n i c i n d u s t r y , w e r e p u r s u i n g t h e i r b u s y l a b o r s w i t h profit.
I n t e r n a l i m p r o v e m e n t s w e r e b r i n g i n g d o w n t h e r e m o t e s t W e s t to t h e
s h o r e s of t h e A t l a n t i c , a n d b i n d i n g a n d c o m p a r t i n g t h e d i s p e r s e d i n *habitants of this i m m e n s e t e r r i t o r y , as t h e i n h a b i t a n t s of a single S t a t e ,
O n e u n i v e r s a l s m i l e b e a m e d from t h e h a p p y face of this f a v o r e d
country.
B u t , sir, w e h a v e h a d a fearful a d m o n i t i o n , t h a t w e h o l d
a l l s u c h t r e a s u r e s in e a r t h e n v e s s e l s ; a n d a still m o r e fearful o n e , t h a t
m i s j u d g i n g m a n , e i t h e r in e r r o r or in a n g e r , m a y , in a m o m e n t , d a s h
t h e m to t h e e a r t h , and b r e a k into n t h o u s a n d f r a g m e n t s t h e finest
- c r e a t i o n s of i n d u s t r y a n d i n t e l l i g e n c e .
S i r , t h e r e is o n e g r e a t i n t e r e s t in t h i s n a t i o n , t h a t is, a n d I f e a r
w i l l for s o m e t i m e c o n t i n u e to b e , p e c u l i a r l y s u b j e c t t o d e r a n g e m e n t ;
a n d y e t e v e r y o t h e r i n t e r e s t is i n t i m a t e l y a n d i n s e p a r a b l y i n v o l v e d in it:
1 m e a n t h e c u r r e n c y . W e h a v e s o m e t w e n t y s c o r e s of b a n k s from
w h i c h this c u r r e n c y is d e r i v e d .
W e h a v e from e i g h t y to a h u n d r e d
m i l l i o n s of b a n k n o t e s , w i t h a m e t a l l i c c i r c u l a t i o n a l o n e w i t h it, n o t
g r e a t e r , p e r h a p s , t h a n as o n e to s e v e n . W e h a v e , it m a y b e , o n e h u n d r e d a n d forty t o fifty millions of b a n k n o t e s , a n d b a t i k d e p o s i t e e , p e r f o r m i n g in p a r t t h e s a m e office, w i t h a b o u t t h e s a m e p r o p o r t i o n of
s p e c i e in t h e b a n k s to s u s t a i n it. It is a s y s t e m d e p e n d i n g e s s e n t i a l l y
for its s a f e t y u p o n p u b l i c c o n f i d e n c e , and t h a t c o n f i d e n c e d e p e n d i n g o f c o u r s e u p o n t h e r e g u l a r i t y of t h e w h o l e m a c h i n e , w h i c h a g a i n
<Jependfc u p o n t h e c o n t r o l t h a t g o v e r n s t h e w h o l e . W h e n c o m p a r e d
•with t h e c u r r e n c i e s o f K n g l a n d a n d F r a n c e — i n t h e t e r m e r of w h i c h
t h e m e t a l l i c c i r c u l a t i o n is e s t i m a t e d as n e a r l y one-half, a n d in t h e l a t t e r a s n i n e - t e n t h s of t h e w h o l e — i t m a y b e s e e n h o w m u c h m o r e c o n fidence is r e q u i r e d h e r e , a n d b o w m u c h g r e a t e r t h e l i a b i l i t y to s h o c k
a n d to d e r a n g e m e n t .
Y e t , b y t h e r e g u l a t i o n a n d c o n t r o l of t h e N a t i o n a l B a n k , e v e r s i n c e that r e g u l a t i o n a n d control h a v e o b t a i n e d , t h e
s y s t e m h a s w o r k e d w e l l , a n d it h a s w o r k e d well o n l y b y m e a n s of
them,
S i r , this regulation a u d control have been thrown away-—
5
thrown away wantonly and contemptuously. I n an instant, sir, a l most in the midst o f the smiling s c e n e I have described, without a n y
preparation of the country at large, with nothing by way o f noticebut a m e n a c e , which no one but the Bank itself, and she only from
the instinct of self-preservation, s e e m s to have respected, this m o s t
delicate of all the instruments of political e c o n o m y has b e e n assaulted, deranged, and dislocated; and* the whole scene of enchantment
has vanished, as by the command of a wizard. T h e State banks a r e
paralyzed—they can do, or they will do, nothing. T h e Hank of t h e
United States stands upon her own defence. S h e can do, or she will
do nothing, until she knows the full extent o f the storm that is to follow, and measures her own ability to meet it. P r i c e s are falling, d o mestic exchange is falling, bank notes are falling, stocks are falling,
and, in some instances, have fallen dead. T h e gravitation of the
system is disturbed, and its loss threatened; and it being the work o f
m a n , and directed only by his limited wUdnm, there is no L a P l a c e
or Bowditch that can foretell the extent or the mischiefs o f tin* d e rangement, or in what n e w contrivance a compensation m a y be found
for the disturbing force.
Sir, whence lias come this derangement? It c o m e s from the act
of the Secretary in n moving the di posit es^ and in dtdaring
his doctrine of an unregulated,
uncontrolled 9 State
hanf: paper
currency*
Jt is against all true philosophy to assign more causes than are sufficient to produce the ascertained effect. T h i s cause is sufficient—
this I verily believe has produced it—and I hope for the patient a t tention of the House to my humble efforts hereafter to show that n o thing else has produced it.
Sir, the Secretary of the Treasury has, in m y poor judgment*
committed one error which is wholly inexcusable; it is, in part, t h e
error o f the argument that has proceeded from the honorable m e m b e r
from T e n n e s s e e . T h a t error lies in supposing that there were but
two objects to be considered in coming to his decision upon the d e poshes-—the Administration
and the liank.
T h e corxTUY has b e e n
forgotten. T h e Administration was to vindicate its opinions.
The
Bank was to be made to give way to them. T h e consequences w e r e
to be left to those whom they might concern; and they are such a s
moderate human wisdom might have foreseen, such as are now before
us. W h i l e the Administration is apparently strong, and the B a n k u n disturbed, the country lies stunned and stupefied by the blow; and it
is now for this H o u s e to say whether they will continue the error, b y
forgetting the country here also, or will endeavor to raise her to her
feet, and assist her in recovering from the shaft that was aimed at t h e
B a n k , but has glanced aside and fallen on her own bosom.
Mr. S p e a k e r , T cannot better show the extent of the d e r a n g e m e n t
which this a c t is certain to produce, unless it is corrected, than b y &
statement of the uses which the Bank o f the U n i t e d States has a n n u ally afforded, in various w a y s , to the people of the United Slates^
I take the year 1 8 3 2 , for which the returns are complete as to t h e
item of e x c h a n g e s , and the y e a r s 1 8 3 2 and 1 8 3 3 for s o m e other i t e m s
o f nearly equal m o m e n t .
6
T h e a m o u n t of d o m e s t i c hills of e x c h a n g e , purchased
in all p a r t s o f
t h e U n i o n , in 1 S 3 2 , w a s
$67,516,673
[ T h e h a l f y e a r from D e c e m b e r , 1 8 3 2 , to J u n e , 1 8 3 3 ,
w a s $ 4 1 , 3 1 2 , 9 8 2 , s h o w i n g a l a r g e i n c r e a s e in t h a t
Hue d u r i n g t h e first half of this y e a r . ]
42,096,062
T h e a m o u n t of d o m e s t i c bills collected for o t h e r s , w a s
T h e a m o u n t of drafts by B a n k U n i t e d S t a l e s a n d its
.
32,796,087
offices, on e a c h o t h e r ,
D r a f t s b y B a n k U n i t e d S t a t e s a n d its offices, on S t a t e
banks,
_
_
_
.- 12,361,337
N o t e s of B a n k U n i t e d S t a t e s a n d its b r a n c h e s , r e c e i v e d a n d f>aid out of p l a c e , viz: at p l a c e s w h e r e t h e r e
w a s no o b l i g a t i o n to p a y t h e m ,
- 39,449,527
N o t e s of S t a t e b a n k s r e c e i v e d by B a n k U n i t e d S t a t e s
- 21,630,557
a n d its b r a n c h e s , w h e r e t h e y w e r e not p a y a b l e ,
- 16,100,000
T r a n s f e r s of funds for t h e U n i t e d S t a t e s , T r a n s f e r s of office b a l a n c e s ,
9,767,667
M a k i n g a total of d o m e s t i c e x c h a n g e s ,
A d d to w h i c h the a m o u n t of—
Foreign exchange purchased, Do.
sold, -
- 241,717,910
$9,253,533
4,203,204
13,456,737
M a k i n g t h e total a m o u n t of e x c h a n g e s , b y m e a n s of the
B a n k of t h e U n i t e d S t a t e s , w i t h i n the y e a r 1 8 3 2 ,
255,174,647
T h e a m o u n t of p r e m i u m s o n d o m e s t i c e x c h a n g e , r e c e i v e d b y
t h e B a n k for t h e s a m e p e r i o d , w a s £ 2 1 7 , 2 4 9 5 6 , w h i c h is a b o u t
o n e - e l e v e n t h of o n e p e r cent- on t h e asgxejrate a m o u n t of t h e
d o m e s t i c o p e r a t i o n s of t h e B a n k , s a y 8 2 4 1 , 7 1 7 , 9 1 0 ; a n d this h a s
b e e n t h e w h o l e cost of this circulation to t h e p e o p l e of the U n i t e d
S t a t e s , b y t h e aid of w h i c h t h e i r p r o p e r t y of e v e r y d e s c r i p t i o n h a s
b e e n p a s s i n g hi a copious a n d uniform c u r r e n t , from o n e e x t r e m i t y '
of this n a t i o n to t h e o t h e r . T o this e x t e n s i v e aid must b e a d d e d
t h a t d e r i v e d from t h e B a n k d i s c o u n t s , w h i c h , w i t h t h e d o m e s t i c bills
p u r c h a s e d , a m o u n t e d , in t h e y e a r 1 8 3 2 , to a n a v e r a g e s u m of
$ 6 6 , 8 7 1 , 3 4 9 , a n d , in t h e y e a r 1 8 3 3 , to a n a v e r a g e of $ 6 1 , 7 4 6 , 7 0 8 ;
a n d that also d e r i v e d from t h e c o n s t a n t circulation of h e r n o t e s ,
a v e r a g i n g $ 2 0 , 3 0 9 , 3 . 3 9 for the y e a r 1 8 3 2 , a n d £ 1 8 , 4 9 5 , 4 3 6 for t h e
succeeding y e a n
N o w , sir, it a p p e a r s to m e that I d o no injustice to t h e S e c r e t a r y
o f t h e T r e a s u r y , or to a n y o n e w h o h a s d i r e c t e d , or a u t h o r i z e d , or
s u p e r i n t e n d e d this a c t , h y s a y i n g t h a t it w a s t h e design of t h e r e m o v a l
of t h e d e p o s i t e s to b r e a k u p this w h o l e m a c h i n e r y ; that this w a s not
t o b e a c a s u a l , u n e x p e c t e d , u n p r e m e d i t a t e d result; but that t h e r e m o v a l
w a s o r d e r e d for t h e v e r y p u r p o s e of d r a w i n g t h e circulation of t h e
B a n k of t h e U n i t e d S t a t e s out of t h e h a n d s of the p e o p l e into t h e
h a n d s o f t h e B a n k ; to c o m p e l h e r , with this v i e w , to r e d u c e h e r
d i s c o u n t s , a n d d i m i n i s h t h e a m o u n t of h e r p u r c h a s e s of d o m e s t i c
e x c h a n g e ; a n d t h u s to cut all t h e t i e s w h i c h u n i t e d t h e B a n k t o t h e
7
internal trade of the country. I do no injustice b y saying this,
because, in the letter of the S e c r e t a r y , if I read it right, this design
is there explicitly avowed and defended. But whether designed or
>not, this will be the effect, and the necessary effect, of the m e a s u r e ,
if it shall prove successful. It must throw the whole machinery of the
B a n k out of gear; compel her at once to begin the process which is
to liquidate and close her transactions; separate her from the people,
and the people from the B a n k ; and deliver over these vast concerns
and interests to confusion and misrule. I t is by the revelation of
this design, and by the necessary consequences of the measure, as this
intelligent people have apprehended them, that great distress has
already been produced, and the just anticipation of greater distress
hereafter. C a n an5 r one, after this view of the recent uses of the B a n k ,
and of the effects which have followed, and are to follow, their intended or necessary interruption, ask the reason of the want of
employment, the want of m o n e y , the stagnation of trade, which p r e vails in most of our cities? Can he ask the cause of the syncope into
which this people have fallen'? N o , sir, no one can for a moment
doubt the cause of all this. I t lies in the act of removing the deposites,
taken in connexion with its design and doctrine, I t is not the m e r e
transfer from one place to another. T h a t is a circumstance which
might happen, and has happened already, in the history of this B a n k ,
without producing any alarm whatever. I t is not the removal of the
deposites simply, but the design with which that removal was m a d e ,
and the effects which belong to it. T h e alarm proceeds from looking
at the necessary consequences of such a design, unless Congress shall
interpose to avert them.
P e r m i t me, sir, before I come to the regular discussion of the
reasons adduced by the S e c r e t a r y of the T r e a s u r y for removing the
deposites, to occupy a few moments in drawing the attention of the
House to some matters, which, to m a n y gentlemen h e r e , are no
doubt familiar, but which ought to be known and considered by all
who would form a sound j u d g m e n t on the question before us. I
have said that the removal of the public deposites, if it had b e e n
a m e r e transfer of so much money from one bank to other b a n k s ,
judiciously regulated as such transfers may b e , would not have
produced the train of consequences which we have already seen to
flow from it. T h e r e are gentlemen in this House familiar with as
large operations in finance, that have produced no inconvenience.
T h e effects of such a measure must depend upon the condition of
trade at the moment of removal, upon the continued or interrupted
application of the money transferred, to the same uses to which it has
b e e n before applied, and upon the prosecution or discontinuance of
the general system of banking operations which prevailed at the m o ment of transfer. W h a t its effects must have been, and must continue
to be, in the actual circumstances of the country, t a k e n in connexion
with the imputed design, it is not difficult to show.
Sir, the Bank of the United States held of the public deposites,
of every description, on the 1st of August, 1 8 3 3 , according to the
statement of the S e c r e t a r y of the T r e a s u r y , the sum of $ 7 , 5 0 9 , 9 3 1 ;
and they were in a course of increase, which the B a n k knew as well
8
us the Secretary, up to the 1st of October, 1 8 3 3 , when they amounted
to the sum of $ 9 , 8 6 8 , 4 3 5 ; say ten millions of dollars. H o w was
this money to be paid? T h e Secretary of the T r e a s u r y had a right
to demand its payment, w h e n , where, and in such sum or sums, as he
thought fit* H e had such a power to do it in point of form, that the
B a n k could not question its exercise in point of right* It was the
duty of the B a n k to he prepared to pay it; and the question must be
answered, how was the money to be paid?
T h e answer given to this question, and given with a view to involve
the B a n k in odium and prejudice, isthis: that she ought to have paid
it, or whatever the Secretary chose to require of it, in specie, from
h e r vaults, without distressing the community, by calling upon others
to pay their debts to her. T o say nothing of the fact, sir, that the
B a n k has always paid every one, the T r e a s u r y included, in specie,
unless they preferred something else, the doctrine that she was to pay
in specie to the T r e a s u r y , without putting herself in a condition to
require it from some one else, is a doctrine which I cannot admit.
I t is one that will not bear examination.
T h e Bank, on 1st October, 1 8 3 3 , had specie in all her vaults to the
extent of $ 1 0 , 6 6 3 , 4 4 1 . If she had been so situated at that time as
that this, or any considerable portion of it, had left her vaults, without
being brought back again, the consequences might have been of the most
pernicious character to lierself and to the whole country. T h e B a n k
had a circulation of more than eighteen millions to sustain, exclusive
of her private deposites. A iww era had opened. A new system was
about to be adopted in the fiscal affairs of the Union. Its etfects were
to be seen.
T h e extent to which the T r e a s u r y was about to assail
her could not be known.
T h e slightest interruption, the slightest
fear of interruption, to her promptness and punctuality, would have
raised that appreheusion for her stability which has been excited
for others. Sir, to ask this Bank, under these circumstances, to
empty her vaults of specie, without taking any measures of precaution to replenish them, would have been to ask the able directors to
throw away their whole capital of reputation, and that of the B a n k
also. T h e y would have proved themselves unworthy of the occasion
on which they were called to act. W h a t , sir, at the verv outbreaking" of
the storm, when no human intelligence could tell how long it was to
last, or what would be the fury of its violence, to ask the pilots of this b a r k
to k e e p all her sails set, and to throw her ballast overboard! No, sir;
the Bank was bound to do as she has done. She was bound to p r e pare for the trial. She was bound to strengthen her position, by diminishing her discounts; and she has diminished them, in my judgment^
most wisely, most discreetly, and most tenderly. And yet, sir, it is
from this circumstance—the mere reduction of loans and purchases
of bills, without looking either to the necessity for that reduction,
or to the extent and effect of it—that some men of honest and
upright minds have been prejudiced against her, I can show f without difficulty, that it is a mere prejudice.
T h e Bank had to pay over ten millions of public deposites, and she
ought not to have exposed herself to lose any material portion of her
specie, without being in a condition to recall it.
She had then but
9
one resource* and that was, unless the interest of her debtors did of
itself produce the effect by diminishing their Joans, to call upon them
to assist tier in paving the amount. T h e r e was no other way open to her;
and the degree to which she must call, in order to obtain assistance to
a given extent, is a point in practical banking to which it is material
for gentlemen to advert.
In explaining this operation, so as to make it intelligible to that
portion of the House which may not be familiar with banking, I will state
the argument against the Bank. It is said, sir, that whatever amount
she requires her debtors to pay, or withholds from other borrowers after it is paid, is to be set down as an actual increase of her ability to
meet the demand for the public depositee T h i s is a very specious
but wholly unsound proposition. In the process of reduction of discounts, with a view to increase the ability of a bank, two and two do
not always make four; they some1 times do not even make two. T h e
Bank not only has debtors, but she is herself a debtor to the T r e a sury for the public depositees, and to individuals for their private d e poshes; she is a debtor for her notes in circulation, and to other banks
for any balances due to them. W h e n , therefore, she calls upon h e r
debtors to return a part of the debt they owe her, these very persons
may be her creditors by deposito, or may borrow from such as are,
and may call upon the IJank to piiy what she owes to them. T h u s ,
if a person who is required by the Bank to pay a note, luis at the
same time a deposite or credit in bunk, the one may be made an
offset against the other; and if the two are equal, it is manifest that
the Bank lias no more ability to pay its debt toothers after this transaction than she had before. She has merely paid n debt that she owed
an individual, by the extinguishment of a demand winch the Bank had
upon him. Sir, this effect is universally seen m the practical business of banking, that when a Bank calls in what is owing* to her, a
part of the demand is paid by drafts upon herself; and as her line of
discounts <roes down, so does her line of individual deposites*
It will be easy to show, sir, the effect of this circumstance upon the
resources of the Bank while the reductions of August and September
last were being made.
In August and September the Bank loans and purchases fell, according to the Secretary's letter, 4,006,147 dollars, as follows :
T h e amount of notes and bills in August was $04,100,34!)
And in October following
- * 00,094,202
$4,000,147
But the private deposites in August were
10,152,143
And in October they had fallen to
8,008,862
Making a reduction by payment of these deposites equal to
2,143,281
And leaving the Bank the better in ability to pay the public
only
1,922,866
the difference having been paid away to her own depositors or creditors* T h i s result is familiar in the history of all banks.
As a bank
calls upon her debtors to pay, they call upon her in like manner; and
she retains only the difference between her receipts and payments.
10
Sir, while the process of reduction was going on in August and
September, 1833, the public deposites to be withdrawn in October were
increasing against the Bank, having been in October the amount before stated 89,868,435
While in August they stood at
7,599,931
Making an increase of
• 2,268,504
so that, regarding these elements alone, the increased ability of the Bank
to meet the public deposites was not equal to the increased demand
by reason of the deposites; and the process of reduction was of necessity to be continued. So very insufficient a method is it of ascertain*
ing the effect of reductions either upon a bank or the community, to
take the amount of reductions only.
But, sir, let mc carry this examination a little further. T h e amount of
reductions from 1st August, 1833, to 1st January, 1834, was as follows;
Notes and bills in August, 1S33, were
$64,160,149
in January, 1834, they were 54,911,461
Mak ing a diminution or reduction in five months of
$9,248,688
T h e individual deposites in August, being
as before
$10,152,143
T h e y are in January, 1834
6,734,866
So that the Bank has paid those deposites to the extent of 3,417,277
And her ability so far as the reductions gave it, was
increased by the difference only
But the public deposites in Oct* were as before $9,868,435
And in January they stand at
4,230,508
Showing a payment of the public deposites during this
time o f ^
- ^ -
5,831,411
5,637,927
And leaving an increased ability to pay the residue, as
compared with the 1st Auir., 1S33, onlv to the extent
of the difference of
- " £193,484
These statements, sir, show that, although reductions are necessary
to meet the withdrawal of deposites, they do not produce an increase
of ability to pay deposites in the direct ratio of their amount; a n d
therefore that the amount alone is not a test of their having been carried to a sufficient extent. There is no doubt that the payments o f
debts to the Bank may have produced distress; but these payments
Have themselves been the effect of the removal of the deposites, a n d
this effect has been infinitely aggravated by the stagnation of trade
and the loss of confidence proceeding from the design of the removal,
and from the manner of the removalSir, the Treasury mi^bt have pursued a course that would have
mitigated the evil, by diminishing the cause of alarm. Having t h e
control of this demand, they might have made known to the B a n k
the times, proportions, and places of the intended transfers, and have
thus giveu assurance to the Bank that its reductions to meet the
11
e m e r g e n c y n e e d not e x c e e d t h e p r o p o s e d d e m a n d . B u t the T r e a s u r y
t o o k a different c o u r s e ; a n d , if a n y thing could r a i s e t h e e m b a r r a s s m e n t of t h e B a n k , a n d the c o m m u n i t y also, to t h e highest d e g r e e , it
w a s the c o u r s e which the T r e a s u r y p u r s u e d .
M r . S p e a k e r , w h a t w a s t h a t course? Is a n y g e n t l e m a n in this H o u s e
i g n o r a n t of it? T h e h o n o r a b l e m e m b e r from T e n n e s s e e [ M r . P O L K ]
lias r e a d to t h e H o u s e a p a s s a g e from a p a m p h l e t , which he w a s
p l e a s e d to call tlie m a n i f e s t o of the B a n k ; I shall, t h e r e f o r e , r e g a r d
that p u b l i c a t i o n as a u t h e n t i c , a n d I will refer g e n t l e m e n to the c o r r e s p o n d e n c e b e t w e e n t h e c a s h i e r of t h e B a n k a n d t h e T r e a s u r e r of
t h e U n i t e d S t a t e s t h a t is a p p e n d e d to it. T h e y will t h e r e find w h a t ,
b y a g r e e m e n t with tlie B a n k , had b e e n t h e p r a c t i c e of the T r e a s u r y
w h e n t h e r e w a s no a l a r m in t h e c o m m u n i t y , w h e n t h e B a n k w a s a d m i t t e d to b e in a s t a t e of p e r f e c t s e c u r i t y , a n d free from the a p p r e h e n s i o n of e m b a r r a s s m e n t .
T h e T r e a s u r y p r a c t i c e w a s to s e n d to
t h e B a n k a daily list, s p e c i f y i n g e v e r y draft u p o n t h e B a n k from
t h e T r e a s u r y , s h o w i n g t h e a m o u n t d r a w n for a n d the p l a c e of p a y m e n t , but o m i t t i n g t h e n a m e s of t h e p e r s o n s to w h o m p a y a b l e , t o
g u a r d a g a i n s t fraud.
A n o t h e r list w a s s e n t w e e k l y , with t h e d a t e s ,
a m o u n t s , p l a c e s of p a y m e n t , a n d n a m e s of the p a y e e s . T h e s e w e r e
i n t e n d e d not only to guard t h e B a n k a g a i n s t fraud a n d s u r p r i s e , but to
e n a b l e the B a n k to r e g u l a t e t h e a c c o m m o d a t i o n s to its c u s t o m e r s , as
t h e y w e r e thus a p p r i z e d of t h e p o i n t s at w h i c h t h e i r funds would b e
w a n t e d . N o t h i n g s u r e l y couid be m o r e n a t u r a l t h a n to c o n t i n u e a
p r a c t i c e like this, w^ien t h e d e p o s i t e e w e r e to be p e r m a n e n t l y r e m o v e d .
I t could not be d o u b t e d b y a n y o n e t h a t such a p r o c e e d i n g m u s t c a u s e
u n e a s i n e s s in tlie p u b l i c m i n d ; a n d t h e very first p r e c a u t i o n w h i c h
p r u d e n c e would h a v e suggested to m i t i g a t e t h e a l a r m , w a s t h e c o n t i n u a n c e a n d i n c r e a s e of t h e s e s a f e g u a r d s of t h e B a n k ; c e r t a i n l y n o t
t h a t , a t t h e v e r y c o m m e n c e m e n t of t h e a l a r m , t h e y should be d i s c o n tinued.
But such w a s tlie fact.
T h a t they were discontinued, and
t h a t t h e B a n k , misled a n d d e c e i v e d , h a d to d e a l with t h e T r e a s u r y as
with an e n e m y , is an e v e n t which b e l o n g s exclusively to t h e p r e s e n t
d a y , a n d to the e x i s t e n c e of p e r s o n a l feelings in the D e p a r t m e n t w h i c h
d i r e c t e d t h e T r e a s u r e r , wholly u n b e c o m i n g t h e official t r a n s a c t i o n s o f
any Government*
S i r , if I m e a n t to deal with m y e n e m y as is befitting t h e spirit of
h o n o r a b l e c o n t e s t , I would g i v e him e q u a l i t y of position, of i n s t r u c t i o n , of k n o w l e d g e , a n d let t h e issue b e t h e result of skill and t h e
b e t t e r c a u s e ; but if I m e a n t to d e p r i v e hiin of all c h a n c e of d e f e n c e
o r e s c a p e , to m u r d e r him b a s e l y , w h a t b e t t e r c o u r s e could I p u r s u e ,
t h a n to blindfold h i m , or r a t h e r to t h r o w false lights into his e y e s , t h a t
h e could only k n o w the a p p r o a c h of t h e p o n i a r d by feeling it in his
heart?
S i r , t h e f o r m e r p r a c t i c e w a s m a d e an i n s t r u m e n t of i m p o s i t i o n u p o n
t h e B a n k , by c o n t i n u i n g to w e a r its usual a p p e a r a n c e s , w h i l e , in t r u t h ,
drafts, to t h e e x t e n t of n e a r l y t h r e e millions of d o l l a r s , w e r e p u r p o s e l y w i t h h e l d from t h e l i s t s — d r a f t s p a y a b l e in u n k n o w n p l a c e s ,
a t u n k n o w n t i m e s , a n d to u n k n o w n p a r t i e s . T h e lists t h e m s e l v e s b e c a m e i n s t r u m e n t s of d e c e p t i o n , a n d g a v e false information to t h e B a n k
of t h e s t a t e of t h e T r e a s u r y d e m a n d , while r u m o r s g a v e out t h e exist
12
e n c e of t h e c o n c e a l e d drafts in p r e c i s e l y t h a t w a y which w a s m o s t
likely to i n c r e a s e t h e d e c e p t i o n , I call the attention of t h e H o u s e t o
that c o r r e s p o n d e n c e of which I h a v e s p o k e n . T h e T r e a s u r e r s a y s
that t h e drafts w e r e of a n unusual kind;
tluit they d e p e n d e d o n
certain contingencies—contingencies
still u n k n o w n to this H o u s e a n d
nation. W a s this a reason w h y the B a n k should n o t h a v e n o t i c e o f
t h e m ? W a s it calculated to quiet the a p p r e h e n s i o n s of t h e B a n k o r
of t h e c o m m u n i t y , that t h e p r e s e n t a t i o n of t h e s e drafts,* p a y a b l e a s
it n o w a p p e a r s at sight, w a s s u s p e n d e d upon unknown
contingencies?
S i r , e v e r y u n p r e j u d i c e d p e r s o n w h o looks at this t r a n s a c t i o n , m u s t
a g r e e that t h e course of the T r e a s u r y , in r e g a r d to drafts* for n e a r l y
t h r e e millions of dollars, hovering b e t w e e n P h i l a d e l p h i a , X e w Y o r k ,
a n d B a l t i m o r e , w i t h o u t an intimation to t h e B a n k of t h e t i m e a n d
p l a c e w h e r e t h e y w e r e to be p r e s e n t e d , w a s of itself a m p l y sufficient to justify e v e n m o r e a l a r m than the B a n k felt, a n d g r e a t e r
r e d u c t i o n s titan the B a n k r e q u i r e d .
T h e r e is o n e o t h e r fact to which I will a d v e r t before I close t h e s e
p r e l i m i n a r y r e m a r k s ; it is of g r e a t use in e x p l a i n i n g t h e influence o f
the r e m o v a l in p r o d u c i n g the p r e s e n t distress. T h e h o n o r a b l e m e m b e r from T e n n e s s e e [ M r . P O L K ] e x p r e s s e d g r e a t surprise that a n y difficulty should be a p p r e h e n d e d from transferring deposites from o n e
side of a street U> a n o t h e r , i n a s m u c h as the c o m m u n i t y w o u l d
d e r i v e t h e s a m e a m o u n t of a c c o m m o d a t i o n from them in o n e p l a c e
as in t h e o t h e r .
S i r , t h e c o n s e q u e n c e did not follow. T h e s a m e
a m o u n t of a c c o m m o d a t i o n was not d e r i v e d , and it is for those who
k n o w t h e condition of t h e deposite h a n k s to give the r e a s o n .
This
H o u s e does not k n o w w h a t their c i r c u m s t a n c e s \vei;e. T h e i r c a p i t a l
m a y h a v e b e e n e m p l o y e d in furnishing capital to W e s t e r n b a n k s , o r
in d i s c o u n t i n g upon t h e i r o w n stock; or the a m o u n t of their p r i v a t e
deposites m a y h a v e been lessened by t h e a p p r e h e n s i o n of r e m a i n i n g
in c o m p a n y with a public depositor and pieferred c r e d i t o r . T h e r e is
o n e decisive reason w h y t h e deposite S t a t e h a n k s can n e v e r so efficiently further t h e a c c o m m o d a t i o n of t h e t r a d i n g c o m m u n i t y a s t h e
B a n k of t h e U n i t e d S t a t e s , a n d that is, t h a t the circulation of t h e
o n e e x t e n d s o v e r t h e whole U n i o n , and n e v e r e n t e r s one of h e r b a n k s
in its c o u r s e , but it issues again to r e p e a t t h e circle. But t h e c i r c u lation of a S t a t e b a n k is at h e r o w n door. I t cannot leave it to a n y
m a t e r i a l e x t e n t . C o n t r i v a n c e s to e x t e n d it a r e a b o r t i v e . I t does n o t
a n s w e r the p u r p o s e of e x c h a n g e , and its excess as c u r r e n c y i n s t a n t l y
r e t u r n s upon the b a n k for s o m e t h i n g that is b e t t e r than h e r b a n k notes*
T h e discounts of t h e S t a t e bank*, on t h e faith of the d e p o s i t e s p l a c e d
in t h e m , c a n n o t h a v e b e e n equal to the reductions of t h e B a n k of t h e
U n i t e d S t a t e s to p a y t h e m A n d , in addition to this, t h e r e is a n i m m e n s e mass of p r i v a t e capital usually loaned out on t h e s e c u r i t y o f
s t o c k , at m o d e r a t e i n t e r e s t , w h i c h , at a m o m e n t of d a n g e r and a l a r m ,
r e t i r e s from t h e s c e n e . T h e d a y s of e x o r b i t a n t interest a r e not t h e
d a y s of the capitalist, b u t of m e n w h o desire to m a k e e x o r b i t a n t p r o fit u p o n small i n v e s t m e n t s .
Still, sir, it is not e a s y to a c c o u n t for the height of t h e p r e s e n t d i s tress b y t h e m e r e c h a n g e of t h e d e p o s i t e s , nor b y t h e diminished u s e
of t h e m in t h e S t a t e b a n k s , w h e n c o m p a r e d with their use in the B a n k
r
13
of the United States, from which they were taken* T h e s e circumstances had an effect, but they do not stand alone. T h e r e is an
intense apprehension for the future connected with this operation—an
apprehension which springs from the T r e a s u r y determination that
nearly the whole of the existing circulation of exchanges is to cease;
and cease it must, to a great extent, if the Bank of the United States is
not to collect the public revenue.
T h e Bank of the United States, Mr. S p e a k e r , has performed her
great offices to this people by the concurrence of two peculiarities,
whicli belong to her—her structure, and her employment in the
collection of the public revenue. No State banks, by any combination, can effect the required exchanges to a considerable extent.
No Bank of the United States, without the aid of the public revenue,
can effect them to the extent which the necessities of trade require.
Sir, the structure of the Bank of the United States contributes to
this operation in a way which every one may comprehend. T h e whole
circulation of the United States is employed in effecting-the exchange
of the crops with the merchandise of the country. It is employed
in transporting the crops to market, and merchandise to the places
of its consumption. Now, sir, a National Bank, with branches spread
over the whole Union, knows, from experience, and by her means
of observation, where the amount of demand will fall and rise,
and a t what time these changes will occur. She knows beforehand
where she may with safety diminish her resources, and where she
must enlarge them. W h e r e v e r her resources are placed for use, it
is the same thing to the Bank.
H e r profit is the same
vwry
where; and this ability to give them the position which the trade of
the country requires, is sustained by, and in a great degree dependent
upon, her employment as the depository of the public revenue. I n
this character the Bank receives the revenue, and holds it until the
time of disbursement; and the knowledge which her accomplished
President and the Board of Directors obtain through their relations
to the T r e a s u r y , and by intimate acquaintance with the fiscal operations of the Department, enables them to reconcile all the demands
of the T r e a s u r y with the demands of trade, at the same time that
they preserve the whole? currency of the country in that due p r o portion to demand which makes it, and which alone makes it, sound
and invariable.
But now, sir, this revenue is to be collected against the B a n k .
S h e is to assist in payings not in receiving it. H e r situation is to be
entirely reversed. T h e wants of the community are to become secondary to her own preservation; and, instead of placing her funds
where trade will most require them, she must place them where, from'
the presence of rivals supported by the Government, she will require
them herself for her own protection- Sir, this is to be the future
operation of the measure taken by the Treasury Department.
The
theory of a National Bank with branches not collecting and disbursing
the r e r e n u e , is an absurdity* It never was conceived of until the
present day; and even now, though complaints are made against the*
Bank, as if her powers were not impaired, no one can seriously regard
the measure of removal except as a measure of intended destruction* I t
14
is particularly a m e a s u r e o f i n t e n d e d destruction to all the usual o p e r a tions o f exchange^ T h e B a n k cannot perform t h e m as she has done* I f
the S t a t e b a n k s promise to perform t h e m , it is all delusion* I f t h e y h a v e
contracted to perform t h e m , t h e y will h r e a k their contract; and if t h e y
d o not, t h e y will break t h e m s e l v e s .
I f by possibility t h e y could m a k e
t h e m s e l v e s a B a n k o f the U n i t e d S t a t e s and its b r a n c h e s , w h i c h t h e y
c a n n o t d o , what would the country gain b y such a c o n t r i v a n c e b u t
a b a n k with the p o w e r s o f the present B a n k , subject l o no r e strictions or control b y l a w , and d e p e n d e n t o n l y o n t h e pleasure o f
him w h o controls the deposites? Sir, the w h o l e property o f the c o u n try, in its transfer from p l a c e to place within it, is to undergo
has
already u n d e r g o n e — a violent c h a n g e . T h e r e is not a m a n w h o c a n
n o w t a k e t h e m a n a g e m e n t o f a crop in the S o u t h , or of a m a n u f a c ture or importation in the N o r t h , w h o is able to foresee h o w he s h a l l
conduct it to its c l o s e ; and the c o n s e q u e n c e is, that he will, if p o s s i b l e ,
h a v e nothing to do with either. T h i s d e r a n g e m e n t , actual and p r o s *
p e c t i v e , sir, enters materially into the present e x c i t e m e n t and distress*
A n d d o e s the honorable m e m b e r from T e n n e s s e e p r o p o s e , a s a
r e m e d y for all this, to h a v e an inquiry into the affairs o f the B a n k ?
I s it for difficulties o f this d e s c r i p t i o n and m a g n i t u d e that he d e m a n d s
a sifting inquiry, an inquiry into the printing
accounts of the B a n k ?
I s his great o b j e c t to ascertain h o w £ 7 , 0 0 0 of unvouclied p a y m e n t s
h a v e b e e n distributed, and w h o is the o w n e r o f the National I n t e l l i gencer?
S i r , I confess m y profound astonishment that g e n t l e m e n *
h a v i n g the welfare of this great nation confided to t h e m , will d e s c e n d to inquiries like t h e s e , will run after petty accounts with p r i n t e r s
and the c o n c e r n s of the N a t i o n a l I n t e l l i g e n c e r , a n d , in the ardor o f
pursuit, forget the country that is intrusted to t h e m .
T h e time h a s
c o m e , or I greatly mistake the indications around us, w h e n the c o u n t r y
d e m a n d s that our attention be g i v e n to objects o f a higher nature,
I h u m b l y h o p e , then, Mr* S p e a k e r , that this H o u s e will i n q u i r e
into nothing but the question before it, and from which w e c a n n o t
e s c a p e — t h e evil w h i c h n o w threatens the country, and the p r o p e r
r e m e d y to be a p p l i e d .
A n inquiry of this character is worthy o f a l l
attention, and o f the d e v o t i o n o f all our faculties and efforts. In s u c h
an inquiry, no p e r s o n will b e m o r e r e a d y than m y s e l f to forget t h e
B a n k , if that shall be the course o f patriotism and safety.
Except as
she ministers to the public g o o d , I regard her as nothing, and l e s s
than nothing* T h e public g o o d , in the preservation o f the p u b l i c
faith, in the m a i n t e n a n c e o f the public c u r r e n c y , and in the s u p p o r t
o f the c o n s t i t u t i o n — t h i s is an object which this H o u s e should n e v e r
c e a s e to regard, and to w h i c h , in my further r e m a r k s , I shall e n d e a vor to k e e p my o w n attention fixed, without y i e l d i n g it to any o t h e r .
M r . S p e a k e r , the i m m e d i a t e question before the H o u s e is, w h e t h e r
the reasons assigned by the S e c r e t a r y of the T r e a s u r y tor r e m o v i n g
the public deposttes are such as ought to satisfy C o n g r e s s and t h e
country; and, if not, w h a t is the r e m e d y which it is the duty o f C o n *
gross to apply?
T h e reasons assigned are r e m a r k a b l e , sir, in a particular w h i c h
c a n n o t h a v e e s c a p e d the general observationT h e letter o f t h e
S e c r e t a r y consists o f certain g e n e r a l propositions, by w h i c h he e n -
13
deavors to sustain his authority, and of certain particular reasons or
statements of fact, by which he endeavors to justify its exercise. T h e
general propositions upon which all his particular reasons depend* he
does not condescend to argue at all; and I have listened with all due
attention to the gentleman who has preceded me, the honorable member from Tennessee, without being able to perceive that his course
has in any respect differed from that of the Secretary. T h e Secretary asserts, sir, that, by the removal of the deposites, by aad through
his absolute and unconditional power, whether the act was in itself
right or wrong, with or without cause, the Bank of the United States
is put out of court, and the nation discharged from the contract, without any violation of faith. He further asserts, that while his own
power was absolute, that of Congress over the same subject was gone,
having been alienated to him; that the Legislature were, as to the
treasure deposited in the Bank of the United States, in a condition of
impotency and imbecility; that they had bound themselves hand and
foot by the charter of the Bank; and that, while they had given unlimited authority over the subject to him, they had reserved no power
whatever to themselves or to tho people; and, consequently, that in
no eventj not even if the deposites were unsafe, or the ultimate law*
of all Governments—the safety of the people—should imperiously have
demanded the removal of the deposites, was it in the power of Congress to touch them, without a violation of the public faith. H o
further asserts, that the riphtful exercise of his power is not, even in
point of responsibility to Congress, dependent on the safety of the
deposites, or on the fidelity of the Bank in its conduct to the Government; but that it was his right and duty to remove them, if the
removal tended in any degree to the interest and convenience of the
public. He finally asserts, that as it was his right to remove the
deposites, so it was his right, as a consequence, to select the places
of now deposite; and he did so.
Sir, these are startling propositions. T h e y involve grave consequences. T h e y deserve careful consideration. T h e y are far from
being self-evident. It was worthy of the officer who asserted them,
and who was bound to justify the assertion to Congress, to favor
that body with at least ait outline of the train of reasoning by which
he came to these remarkable conclusions. But, sir, there is no such
thing in the book. I have looked carefully through it, to borrow
some light on this subject from the mind of tin* Secretary, by which
I might enlighten my own; but, beyond the simple dogmas which I
have stated, there is nothing to be found, except the causes of his
particular determination, which were of no sort of importance what«
ever, nor worthy of the least consideration, if his general propositions
are true. I am compelled, therefore, from necessity, to assert the
contrary of all that the Secretary has asserted, and to take the burden
of refuting what it would seem to have been rather his duty to establish. These are points, sir, to which I shall especially call the
attention of the House, as involving principles of the highest public
importance—principles which, if this House shall affirm them, they
will affirm that all power over the Treasury is pone from Congress ^
and that there is but a single Department in the Government,
16
T h e first p r o p o s i t i o n is that with which the S e c r e t a r y b e g i n s h i s
letter* T h e S e c r e t a r y s a y s —
" I t has b e e n settled by r e p e a t e d adjudications, that a c h a r t e r
" g r a n t e d by a S t a t e to a c o r p o r a t i o n like that of t h e B a n k o f t h e
4t
U n i t e d S t a t e s is a c o n t r a c t b e t w e e n the s o v e r e i g n t y w h i c h g r a n t s
** it and the s t o c k h o l d e r s . T h e s a m e principle must a p p l y t o a c h a r " ter g r a n t e d b y t h e U n i t e d S t a t e s ; a n d , c o n s e q u e n t l y , the a c t i n c o r *
4t
p o r a t i n g t h e B a n k is to be r e g a r d e d as a contract b e t w e e n t h e
4t
U n i t e d S t a t e s of the o n e p a r t , and the s t o c k h o l d e r s of t h e o t h e r ;
" a n d , by the plain terms of the contract, as contained in t h e s e c t i o n
*4 a b o v e q u o t e d , the s t o c k h o l d e r s h a v e a g r e e d that the p o w e r r e s e r v e d
** to the S e c r e t a r y o v e r the deposites shall not be restricted to a n y p a r *
** ticular c o n t i n g e n c i e s , but be absolute and nncorulitional^
as far as
** their interests are involved in the removal.
T h e order, therefore,
" of t h e S e c r e t a r y of t h e T r e a s u r y , directing the public m o n e y t o b e
" d e p o s i t e d e l s e w h e r e , can in no event be r e g a r d e d as a violation o f
*fi t h e c o n t r a c t with the s t o c k h o l d e r s , nor impair a n y right s e c u r e d t o
" t h e m b y the c h a r t e r . "
T h a t t h e H o u s e m a y h a v e before t h e m the section to w h i c h t h e
S e c r e t a r y refers, I b e g their a t t e n t i o n to it. It is the Kith section o f
the B a n k Charter, which enacts;
" T h a t t h e depositee of t h e m o n e y of the U n i t e d S t a t e s , in p l a c e s
" in which t h e said B a n k or b r a n c h e s t h e r e o f m a y be e s t a b l i s h e d ,
" shall b e m a d e in said B a n k or b r a n d i e s thereof, unless the S e c r e t a r y
** of t h e T r e a s u r y shall at a n y time otherwise order a n d d i r e c t ; in
44
which case, the S e c r e t a r y o f the T r e a s u r y shall i m m e d i a t e l y lay
" before C o n g r e s s , if in session, a n d , if not, i m m e d i a t e l y after t h e
" c o m m e n c e m e n t of the n e x t session, the reasons of such order
or
u
direction"
I b e g the H o u s e to r e m a r k that this d o c u m e n t p r o c e e d s from a
g e n t l e m e n of distinguished r e p u t a t i o n as a j u r i s t , t r a i n e d to legal i n vestigations, and fully a c q u a i n t e d with the legal effect and v a l u e o f
e v e r y word w h i c h he has used. T h e l a n g u a g e he has a d o p t e d r i m s ,
" b y t h e plain terms of t h e c o n t r a c t , as c o n t a i n e d in t h e s e c t i o n a b o v e
q u o t e d , the s t o c k h o l d e r s h a v e a g r e e d , ' 1 & c . Sir, if the S e c r e t a r y h a d
said t h a t t h e c o n t r a c t g a v e him this p o w e r by implication,
or t h a t h e
possessed it b y t h e fair interpretation
of the "section, or by its reason*
spirit, scope, or intention,
m y perplexity would h a v e b e e n less; b u t
w h e n h e asserts that his authority is derived from the tmrms of t h e s e c t i o n , and from its plain t e r m s , and that by those t e r m s it is not r e s t r i c t e d
t o a n y p a r t i c u l a r c o n t i n g e n c i e s , but is absolute ami u n c o n d i t i o n a l , I
feel s o m e d o u b t s w h e t h e r t h e r e is t h a t c o m m o n m e d i u m of a c o m m o n
l a n g u a g e b e t w e e n t h e h o n o r a b l e S e c r e t a r y a n d m y s e l f which is so i n dispensable to profitable argument* I f I rightly u n d e r s t a n d t h e p r o position, it has no a u t h o r i t y in t h e t e r m s , nor in the r e a s o n , s p i r i t , o r
intention of the section; a n d it is a s revolting to good s e n s e , in t h e
s t r e n g t h of t h e l a n g u a g e w h i c h t h e S e c r e t a r y h a s u s e d , a s it is t o t h e
rules of law* I t .asserts t h a t , in no e v e n t , right or w r o n g , not e v e n
in t h e c x t r e m e s t case of wilful injustice or fraud, (a case w h i c h I a m far
from s u p p o s i n g t o h a v e b e e n in the view of t h e S e c r e t a r y , t h o u g h h i s
lan<njage c o m p r e h e n d s it,) could the B a n k a s s e r t t h e least violation of
17
faith by the Secretary's removal of the deposites. Sir, 1 submit to
the House that the contrary proposition may be easily shown to be
true, and therefore that the Secretary's proposition is not true.
T h e right of the Bank to the deposites is derived from contract; a
valuable consideration having been paid for it, in a bonus to the T r e a sury, and in a stipulation for expensive services to be performed
through the whole term of the charter. A right in the Secretary to
remove those deposites, without good cause, during any part of the
time, is not to be presumed, but the contrary; and it should not be conceded, until it is shown to be required by the clear and plain meaning of the whole section. T h e terms of the section, instead of giving
to the Secretary an absolute and unconditional power to remove the
deposites, require that he shall have reasons for the removal, which
reasons he shall immediately communicate to Congress. T h i s is the
condition upon which the Bank submits to the exercise of his power—
that he shall have reasons, and communicate them; and such is the
agreement of the parties. T h e whole section is agreement, as the
whole charter is. It is all contract, from the beginning to the end*
Now, if Congress have agreed with the Bank that the Secretary shall
give his reasons for the act, and, consequently, that he shall have
reasons, the difficulty, sir, is to understand how, according to approved
rules of interpretation, these reasons can be considered as of no
concern to the Bank, but only to Congress; how we can understand
that it is of no sort of moment to the Bank whether there are reasons
or not, when the Bank is to be affected by the removal, and Congress
have agreed with the Bank that the reasons shall be given. Sir, in my
judgment, the Secretary has directly inverted the object of the p r o vision.
T h e reasons concern the B a n k only, and not Congress:
or rather, they concern Congress only because they concern the
Bank. T h e contract for the deposites with the Bank is a mockery
under any other interpretation* Congress is ahove the reasons* W h e ther good or bad, she can do right and justice to herself, whatever
the Secretary may argue. T h e Bank, on the other hand, is wholly
dependent upon them, and has no other protection from injustice; and
the stipulation for communicating the reasons to Congress is, t h e r e fore, for the plain and manifest object of giving to the Bank the b e n e fit of a review by Congress, upon such principles as ought to govern
such a contract*
Sir, the honorable member from T e n n e s s e e seems to me not to
have been fortunate in his reference to the former head of the T r e a sury, Mr. Crawford, for his doctrine on any branch of this case- O n
this, in particular, the opinion of Mr, Crawford was directly against
him, as well as against the present Secretary, and in favor of that interpretation which I suppose to be the true one. On the 25th M a y ,
1824, the select committee on the memorial of Niniau E d w a r d s , r e ported that, in certain instances, deposites of the public money were
made by Mr. Secretary Crawford in certain State banks situated in
places where the Bank of the United States had branches, and that
he made no such communication of his reasons to Congress as the
charter requires. " T h i s omission," says the committee, " i s acknowledged by the S e c r e t a r y , who says it was owing to inadvertence; and
2
IS
that the inattention to the provision of the law was u n i m p o r t a n t , i n a s m u c h as the provision wa> intended oaviot>i.v for the benefit
<*f
the Bank, and the Bank had full notice." (RejM>rts o\ c o m m i t t e e s ,
18th Congress, 1st session, documem I:?*.) T h e doctrine of t h e
present Secretary is, that the provision wa*> not intended at all f o e
the benefit of the Bank; but that, so far a> rt <jard> the Bank, his pow©«of removing the deposites is. by the phi in term> of the section, a b s o lute a n d unconditional.
T h e honorable member from Tenne.->ec is not more fortunate i n
the suggestion of his own reasons for suppoMivj; the provision to r e gard Congress and not the Bunk. I miderxaLHThini to have said t h a t
the section required thU communication iVom the S e c r e t a r y , that C o a »
gress might know, 1st, where the dupo.-ites were made liy the S e c r e t a r y
after their removal; and 2d, whether the Secretary was or was not l i a b l e
to impeachment for the act. Now, sir. 1 think mv>olf entitled to a s k
it as a concession from the honorable member, that a c o m m u n i c a t i o n
of the fact where the public money is placed, is not a c o m m u n i c a t i o n
of the reasons why it w;i> removed from the Bank of the I n i t e c l
States. T h a t f-jet is preci>eiy u hat the Secretarv i> not directed to com—
municate. ills communication is, by the pi am term> of the s e c t i o n ,
confined to the reasons for ordering: and directing that the d e p o s i t e s
should not he made in the 3 a n k or the branches 'thereof. A s to t h o
object of impeachment, sir, it is as much in derogation of that p r i n ciple of our constitution, that no man shall be compelled to be a w i t ness against himself, as it k, of the character of the Legislature f o r
plain and honest dealing with its officer, to impute to it the design o f
drawing the Secretary of the Treasurv into a confession which ' m a y
be read against htm to the Senate. S o , sir; this was not the d e s i ^ i
ot Congress, nor can any course of decent reasoning sustain the e n o r mous proposition of the Secretary, that hi» power is absolute and u n conditional. It , s a power which Consrres* did not, could not, g i v e .
A n absolute and unconditional power, derived hv implication from a
contract, for valuable consideration, belongs to do'ctriue* which a c o u r t
of justice would spurn from its hall. It has no countenance in o u r
institutions; it has none in our constitution, which vvns ordained t o
establish justice, as well as to secure the bkssiixx of libertv: it has n o
countenance from any thing but tho poverty of the case, which, finding a reason to be impossible, makes it unnecessarv.
Sir, the interpretation of the section is, to mv mind, a b u n d a n l l v
clear. T h e Legislature did not see fit to part with the absolute r i g h t
to the deposites, nor to make the tight of the Bank a judicial q u e s t i o n
by defining the exceptions to it. I n consequence of the fiscal r e l a tions of the Secretary of the T r e a s u r y to the B a n k , and of the p r o b a bility that whenever the proper reasons should occur they would call
ior immediate action, the parties have agreed that lie shall e x e r c i s e
a provisional
power oyer the subject, under the stipulation that h i s
reasons shall come immediately to Congress for their review, upon s u c h
-inciples as belong to the contract; and if, according to those p r i n 'es, the reasons of the S e c r e t a r y are insufficient for the act, t h e n
'11 ho an open breach of the public faith, not merely sanctioned, b u i
19
committed by Congress, not to send the dcposites hack to the Bank,
whose right to them is unimpaired* If, after the payment of a million
and a half of money as a bonus, and the performance of costly duties to
this period of the charter, and to be continued to the end of it, together
equivalent to an annual payment of two hundred thousand dollars for
twenty years, the Secretary has removed the public money without
adequate cause, it is possible, indeed, that an artificial argument may
be made to sustain the act; but reflection in this House, and by this
people, will infallibly bring the question back to the ground upon
which it must ultimately rest—the ground of common sense and common justice, upon which alone the faith of the nation is to be defended,
if it can be defended at all.
Mr. Speaker: T h e second general proposition of the Secretary
affects this House as a component part of the legislative power, and
affects the whole' legislative power in the most critical manner, as
may be seen by the proposition itself. 44 T h e place of deposite
44
could not be changed by a legislative act, without disregarding a
4
* pledge which the Legislature has given," 44 although Congress
" s h o u l d be satisfied that the public money was not safe in the care
44
of the Bank, or should be convinced that the interests of the peo44
pie of the ITnited States imperiously
demanded the removal."
T h e s e are the plain terms of lhe Secretary, and the House must see
what is their plain meaning: that, whereas the Secretary could overthrow this contract, with or without reason, right or wrong, Congress
could not be relieved from it by the most imperious reasons; that as his
action could under no circumstances impair the contract, so the action
of Congress upon it could, in no event, be otherwise than illegal.
Sir, there is one characteristic of these propositions, for which I
acknowledge mvsolf to be indebted to the Secretary; tbev are so
strongly stated, that \\ is impossible to mistake their meaning. While
the Secretary asserts every power over the subject in himself, he
denies the existence of any power in Congress over the same subject.
T h e use and design of the doctrine are, at the same time, as clear as
its meaning; it is the only and the indispensable justification of the
Secretary's extreme action upon the depositee so shortly before the
present session of Congress; and, if this justification fails, he is without any.
T h e question, sir, concerns the interpretation of a statute- T h e
extent of the Secretary's authority, and of the restriction upon that
of Congress, must be collected, therefore, in the ordinary way, from
the fair scope and moaning of its provisions, in their application to the
subject-matter; and the House must consequently frel some surprise
that the Secretary should have adopted the interpretation which he
asserts, in a state of mind that ought to have carried him to the
directly opposite conclusion. His letter proceeds to say: " T h e
** power over the place of deposite for the public money would seem
44
properly to belong to the legislative department of the G o v e r n 44
ment, and it is difficult fo imagine why the authority to withdraw it
44
from this Bank was confided exclusively to the Executives'1
I must
state it as an extraordinary fact, in the history of legal interpretation*
20
that, when the learned S e c r e t a r y admitted that h e could not i m a g i n e
w h y the meaning should be what he asserts it to b e , it did not occur
to him that this was one of the best reasons in the world for holding
that its meaning is not what he asserts it to be. If a court of justice
should be told by learned counsel that he could not imagine why the
meaning lie gave to a statute should be its meaning, he would probably
be admonished to try the effect of his imagination upon a different
construction, and it would be very likely to assist him in obtaining the
true construction. T h e Secretary says, he cannot imagine why the
power was confided exclusively to the Executive* I hold, sir, w i t h
submission, that the power is not confided to the E x e c u t i v e , e i t h e r
exclusively or at all. T h e position is directly repugnant to his first
proposition, that the power of the S e c r e t a r y is absolute and unconditional^ and it is equally repugnant to the laws and constitution, as
they have created and fashioned the E x e c u t i v e d e p a r t m e n t .
The
Secretary is not the agent or officer of that department in the p e r formance of the trust committed to him by the 16th section of t h e
charter, nor in the performance of any of the trusts committed to hint
by Congress, in regard to the control of the public treasure.
lit
these particulars he is the agent and officer of that department which*
levies aud collects taxes, duties, and imposts; pays the debts of t h e
nation; borrows money; raises and supports armies; provides a n d
maintains a navy; m a k e s appropriations, and keeps the public t r e a sure under its own control, till, in virtue of a legal appropriation, it
is drawn out of the T r e a s u r y . H e is the agent and officer of C o n gress, and not of the Executive.
T h i s , sir, is a question of vast importance, not more in relation to
the recent transaction, than to the due order of this G o v e r n m e n t ,
under all future administrations of it. I t is not a point now raised
for the first time, though possibly for the first time made a topic o r
controversy.
T h e distinction is coeval with the constitution.
It
m a y be traced, in the clearest characters, through the first o r g a n i z a tion of the Executive department and of the T r e a s u r y ; and, if it did
not lead to public discussion then, it was because it challenged u n i versal assent* I t is impossible to explain the structure of these different departments or offices upon any other theory. I ask the
attention of the House to the consideration of this point.
T h e act of 27th J u l y , 1 7 8 9 , entitled " A n act for establishing a n
Executive
d e p a r t m e n t , to be denominated the D e p a r t m e n t of Foreign
Affairs," enacts that the Secretary for that department (now the D e
partmeut of State) ** shall perform and execute such duties as shallr
from time to time% be enjoined on or intrusted to him by the
President of the United States, agreeably to the constitution^ relative to
correspondences, commissions, or instructions, to and with public
ministers or consuls from the U n i t e d States, or t o negotiations with
public ministers from foreign States or princes, or to memorials oi
other applications from foreign public ministers or other foreigners*
or to such other matters respecting foreign affairs as the
President
of the United States shall assign to the said department:
and fur*
t h e r m o r c , that the said principal officer shall conduct the business o f
21
t h e said department in such manner as the President of the United
States shall, from time to time, order and
direct"
T h e act of 7th August, 1789, entitled " A n act to establish an
Executive department, to be denominated the Department of W a r , "
enacts that the Secretary " shall perform and execute such duties as
shall, from time to time, be enjoined on or intrusted to him by the
President of the United States, agreeably to the co?istitution, relative to military commissions, or to the land or naval forces, ships or
warlike stores of the United States, or to such other matters respecting military or naval affairs, as the President
of the United
States
shall assign to the said department, or relative to the granting of
lands to persons entitled thereto for military services rendered to the
United States, or relative to Indian affairs: and furthermore, that the
said principal officer shall conduct the business of the said department in such manner as the President of the United States
shall\
from time to time, order or instruct,*'
T h e act of 30th April, 1798, entitled " A n act to^ establish an
Executive department, to be denominated the D e p a r t m e n t of the
N a v y , " enacts that it shall be the duty of the Secretary ** to execute
-such orders as he shall receive from the President of the United
States, relative to the procurement of naval stores and materials, and
the construction, armament, equipment, and employment of vessels
of war, as well as all other matters connected with the naval establishment of the United States.**
T h e provisions of these acts require no commentary. T h e y place
the departments wholly under the direction of the President, agreeably to the constitution, in all that regards the exercise of his constitutional powers over foreign affairs, the army, and the navy*
T h e act of the ^d September, 17S9, for the establishment of the
T r e a s u r y Department, pursues a strikingly different course. It drops
from the title the denomination of Executive
given to the other d e partments—not by accident, but by design, as the word *' Executive**
was contained in the title of the bill when reported by committee,
(see Journal 1st & 2d Cong, vol. 1, p. 57,) and, what is more material,
it enacts that it shall be the duty of the Secretary *' to digest a n d p i e p a r e
" plans for the management and improvement of the revenue, and for
*c the support of the public credit; to prepare and report estimates of the
" public revenue and the public expenditures; to superintend thccollec<l
tion of the public revenue; to decide on the forms of keeping andstat** ing accounts and making returns; and to grant, under the limitations
" herein established, or to be hereafter provided, all warrants for
ct
moneys to be issued from the T r e a s u r y , in pursuance of appro•*' priations by law; to execute such services relative to the* sale
" of the lands belonging to the United States as may be by law
" required of him; to make report and give information to cither
" branch of the Legislature, in person or in writing, as he may be
** required, respecting all matters referred to him by the Senate or
4t
House of Representatives, or which shall appertain to his office;
*4 and generally to perform- all such services relative to the finances
*" as he shall be directed to perform"
T h e name of the President
22
is n o t m e n t i o n e d in t h e a c t , e x c e p t in t h e 7 t h s e c t i o n , w h i c h c h a r g e s
t h e a s s i s t a n t w i t h t h e d u t i e s of t h e office, in c a s e t h e S e c r e t a r y is
r e m o v e d b y t h e P r e s i d e n t ; a n d t h e b o n d of t h e T r e a s u r e r , p r e s c r i b e d
b y the 4 t h s e c t i o n , is n o t t o b e a p p r o v e d b y t h e P r e s i d e n t , b u t b y
t h e S e c r e t a r y of t h e T r e a s u r y a n d C o m p t r o l l e r .
I t is n o t m e a n t to s a y , sir, t h a t the S e c r e t a r y of die T r e a s u r y
p e r f o r m s , o r is b o u n d to p e r f o r m , no d u t i e s of a n E x e c u t i v e d e p a r t *
m e n t , o r t h a t , in t h e p e r f o r m a n c e of a n y s u c h d u t i e s , he is n o t s u b j e c t t o d i r e c t i o n b y t h e P r e s i d e n t ; h u t it is m e a n t to s a y t h a t t h e
T r e a s u r y D e p a r t m e n t is n o t , in its control of the T r e a s u r y , a n E x e c u t i v e d e p a r t m e n t , in t h e c o n s t i t u t i o n a l s e n s e ; a n d that the d i r e c t i o n
w h i c h is to g o v e r n t h e S e c r e t a r y , is left, b y t h e t e r m s of t h e a c t , t o b e
s e t t l e d a c c o r d i n g to t h e c h a r a c t e r of the function to b e e x e r c i s e d *
T h e S e c r e t a r y is n o t t h e h e a d oi' a n E x e c u t i v e d e p a r t m e n t , in t h e
p e r f o r m a n c e of a c t s w h i c h c o n c e r n t h e c u s t o d y a n d s e c u r i t y o f t h e
p u b l i c m o n e y s in t h e T r e a s u r y .
H i s d e p a r t m e n t is n o t , in this r e respect, a Presidential department.
T o have placed the custody of
the public T r e a s u r y within the Executive d e p a r t m e n t , would h a v e
b e e n a c o n s t i t u t i o n a l i n c o n g r u i t y , a s o l e c i s m , to s a y n o t h i n g of t h e
e n o r m o u s mischiefs t o result from p l a c i n g t h e p o w e r of t h e s w o r d
a n d t h e p u r s o in the? s a m e hand* I t w o u l d h a v e m a r r e d t h e h a r m o n y
a n d s i m p l i c i t y of t h e w h o l e s c h e m e of t h e c o n s t i t u t i o n , by l e a v i n g t o
C o n g r e s s t h e d u t y of p a v i n g t h e d e b t s a n d p r o v i d i n g for t h e c o m m o n d e f e n c e a n d welfare*, while t h e m o n e y collected for t h e s e o b j e c t s w a s not u n d e r t h e i r c o n t r o l , but in the h a n d s of a different d e partment.
It w o u l d m a k e , a n d the a d o p t i o n of the d o c t r i n e d o e s
m a k e , t h e p o w e r of a p p r o p r i a t i o n e n t i r e l y fiuile, b e c a u s e t h e p u b l i c
m o n e y is, b y force of it, as little u n d e r t h e control of C o n g r e s s b e f o r e
a p p r o p r i a t i o n as rt is a f t e r w a r d s ; a n d it g i v e s t h e control of t h e p u b lic t r e a s u r e , so far as t h e p o s i t i o n a n d d i s t r i b u t i o n of it c a n give s u c h
a c o n t r o l , to a d e p a r t m e n t that can wield the w h o l e force of t h e r e v e n u e , a g a i n s t t h e legislative d e p a r t m e n t a n d t h e p e o p l e .
T h e a r g u m e n t of t h e h o n o r a b l e g e n t l e mart from T e n n e s s e e h e r e
c u t s into t h e s u b j e c t b y m e a n s of t h e p o w e r of r e m o v a l from office;
a n d , w i t h t h e a i d of t h e d e b a t e s in C o n g r e s s , w h e n the act for o r g a n izing t h e D e p a r t m e n t of F o r e i g n Affairs w a s on its p a s s a g e , h e c o n *
t e n d s t h a t the P r e s i d e n t nuiy direct t h e S e c r e t a r y of t h e T r e a s u r y
in t h e d i s c h a r g e of his d u t i e s of e v e r y d e s c r i p t i o n , b e c a u s e h e m a y
r e m o v e him.
S i r , I do n o t a d o p t his c o n c l u s i o n .
It d o e s not flow
from his p r e m i s e s , a n d a b e t t e r c o n c l u s i o n {lows from b e t t e r premises*.
T h e p o w e r of removal is a g r e a t q u e s t i o n , w h i c h I do not m e a n a t
p r e s e n t to a g i t a t e .
I t h a s b e e n a l l o w e d , by i m p l i c a t i o n a n d u s a g e , t o
t h e P r e s i d e n t of t h e U n i t e d S l a t e s , for different r e a s o n s ; a n d t h e a r g u m e n t h a n d e d d o w n to ns e n this h e a d is p e r h a p s n o t a l t o g e t l i e r
a s c l e a r , c o n s i s t e n t , a n d i n t e l l i g i b l e as t h e g r e a t n a m e s c o n n e c t e d
w i t h it w o u l d lead us to expect*
I t is p r o b a b l y imperfect*
It isy
h o w e v e r , p l a i n , from w h a t r e m a i n s of it, t h a t t h e g e n t l e m e n w h o a s s e r t e d t h i s p o w e r did not all d o so for t h e s a m e r e a s o n s . I t w o u l d
s e e m to h a v e b e e n t h e o p i n i o n of s o m e , t h a t t h e p o w e r of r e m o v a l
w a s a n E x e c u t i v e p o w e r , or a p o w e r o f t h e E x e c u t i v e d e p a r t m e n t s
23
O t h e r s , w h o did not a g r e e to t h i s , t h o u g h t it b e l o n g e d to t h e a p p o i n t ing p o w e r , which w a s s u b s t a n t i a l l y in t h e P r e s i d e n t . A n d s o m e , who
differed from b o t h , d e e m e d the most c o n v e n i e n t a n d safest p o s i t i o n of
the p o w e r to be in t h e P r e s i d e n t , w h o , by its i m m e d i a t e e x e r c i s e ,
might resist t h e a g g r e s s i o n s of d i s h o n e s t y , or p r e v e n t t h e mischiefs
of i n c o m p e t e n c y *
N o o n e , sir, a p p e a r s to h a v e t h o u g h t t h a t t h e
p o w e r b e l o n g e d to the P r e s i d e n t , b e c a u s e h e h a d a right to direct all
officers a p p o i n t e d d u r i n g p l e a s u r e ; although it is c l e a r , from the a r g u m e n t uf M r , M a d i s o n , t h a t the force of t h a t p r i n c i p l e was v e r y
s t r i k i n g iu its influence u p o n t h e question t h e n directly before C o n g r e s s — t h e right to r e m o v e the S e c r e t a r y for F o r e i g n Affairs.
That
e m i n e n t p e r s o n said, " I t is e v i d e n t l y the intention of the c o n s t i t u t i o n
44
that the F i r s t M a g i s t r a t e should he r e s p o n s i b l e for the
Executive
" department.
S o far, t h e r e f o r e , as w e do not m a k e t h e officers
** who are to aid him in the duties of the said department
rosponsi" hie to h i m , he is not responsible
to his caitHtrj/S'
T h i s , sir, is v e r y
s t r i k i n g , but it goes no further than t h e d u t i e s a n d responsibilities of
a n E x e c u t i v e d e p a r t m e n t , in its c o n s t i t u t i o n a l s e n s e . I f t h e h o n o r a b l e
g e n t l e m a n can m a k e it out that the k e e p i n g a n d control of t h e p u b l i c
T r e a s u r y are* duties of an E x e c u t i v e d e p a r t m e n t in that s e n s e , he will
gain a b e t t e r s u p p o r t for h i s - a r g u m e n t tl>nn I h a v e y e t h e a r d .
T h e p r i n c i p l e w h i c h , it s e e m s to m e , sir, must g o v e r n tins q u e s t i o n , a n d t h a t w h i c h I t a k e the liberty of stating to the H o u s e , as t h e
only satisfactory o n e t h a t lias o c c u r r e d to m e , is t h i s — t h a t t h e right
of direction^ w h e r e it exists at all, results from official c o n n e x i o n , s u b o r d i n a t i o n , and r e s p o n s i b i l i t y , and not fiom t e n u r e of office.
If the d u l y
belongs to t h e E x e c u t i v e d e p a r t m e n t , the right of d i r e c t i o n is iu t h e h e a d
of t h a t d e p a r t m e n t , who is r e s p o n s i b l e for the p e r f o r m a n c e of all its d u t i e s , i f it belongs to the J u d i c i a l d e p a r t m e n t , the right is in the h e a d s
of that d e p a r t m e n t — t h e c o u r t s . I f it belongs to the L e g i s l a t i v e d e p a r t m e n t , the right of d i r e c t i o n is hi C o n g r e s s . T h e d i r e c t i o n in t h e s e
s e v e r a l c a s e s , by force of this p r i n c i p l e , is in perfect h a r m o n y with t h e
system.
It p r o c e e d s from official r e s p o n s i h l i t y in the p r i n c i p a l , a n d
official d u t y iu the s u b o r d i n a t e officer to follow w h a t the p r i n c i p a l d i r e c t s . T h e officer is hound to o b e y the p r i n c i p a l , b e c a u s e t h e p r i n cipal i< r e s p o n s i b l e for him in t h e v e r y m a t t e r d i r e c t e d , a n d his
d i r e c t i o n is a justification to the officer who o b e y s him. A n v o t h e r
p r i n c i p l e must p r o d u c e p e r p e t u a l conflict and confusion. T h e a t t e m p t
to m a k e a test of the r e m o v i n g p o w e r , fails us soon as y o u a p p l y it.
T h e m a r s h a l s a r e , as to m a t t e r s of j u d i c i a l c o g n i z a n c e , d i r e c t e d b y
the c o u r t s , to w h o m t h e y a r e r e s p o n s i b l e , a n d for the p r o p e r d i r e c tion of w h o m the courts a r e r e s p o n s i b l e ; yet the c o u r t s d o not a p p o i n t , a n d c a n n o t r e m o v e , t h e marshalsS i r , t h e q u e s t i o n c a n n o t well arise as to a c t s plainly p r e s c r i b e d .
N o o n e c a n a s s e r t a n a u t h o r i t y in t h e P r e s i d e n t to d i r e c t an a c t to b e
d o n e , w h i c h the l a w s , or the c o u r t s , in c o n f o r m i t y w i t h the l a w s ,
d i r e c t n o t to b e d o n e ; nor t h e c o n t r a r y . I t arises only in r e g a r d to d i s c r e t i o n a r y a c t s . B u t t h e s a m e p r i n c i p l e r e g u l a t e s d u t i e s of
o\ery
d e s c r i p t i o n , a n d especially d u t i e s w h i c h p r e c o m m i t t e d by t h e law t o
t h e discretion of an officer. F o r a b u s e of that d i s c r e t i o n , if a n s w e r a b l e
24
to any thing hut the law, he is answerable to the head of that department to which the particular duty appertains, and by that department
he may be directed. T h e marshal is, in judicial matters, answerable
to the court; in legislative matters, to Congress; and in executive
matters, to the President, T h e Secretary of the T r e a s u r y , as it r e gards the T r e a s u r y , is answerable to Congress. T o give the P r e s i dent the right of directing or controlling his discretion in such matters,
is to m a k e the Secretary responsible to the President, who is not
responsible for him. T h i s , sir, is the position upon which the d o c trine I maintain may be safely placed. T h e President is not r e sponsihlo for the duties which do not appertain to his department.
His direction is no justification to the officer to whom the law assigns
the duty to be performed, or to whom it has given the discretion to
perform the act or not; he is, therefore, not bound to obey him, nor
excusable for obeying him. Any other principle will give to the P r e sident the rijfht of directing and controlling the discretion of every
officer in the land except the Judges.
T h e answers given to these suggestions, sir, are not satisfactory.
It is said, the President has the undoubted right to remove, and may,
in ibis way, obtain the direction. Certainly the President may thus
obtain the direction of men who prefer their office to their duty; but
if he removes, to obtain a power of direction where he has not the
right, he violates his own duty. T h e power of removal ought not to
be so exercised.
It is further said, that all powers are legislative, judicial, or executive. T h e Secretary's power is neither legislative nor judicial,
and therefore it must be executive, and belong to the Executive
departmentT h i s is a confusion of language. T h e
departments
of our Ivovermneut are legislative, judicial, and executive; and what
does not belong to the first two, belongs to the third. But there are
executive arts, that is to say, arts to be executed in the Judicial and
Legislative departments, as well as in the Executive department. A n
act to he executed in the Judicial department does not belong to the
Executive department. T h e question of the right of direction regards
not merely the art to he done, but the relation in which it is to he
done*
It is again said, that the constitutional power of the President to
demand the opinion, in writing, of the officers of the Executive d e partments, touching the duties of their respective offices, shows the
dependency of those officers upon the President, and his responsibility
for them. T h i s may or may not he so; hut it leaves tin* question, what
is an Executive department, in this sense, precisely where it found it.
Again; it is said that the President is bound to take care that the
laws are faithfully executed. T h i s proves too much for the argument, as, if it proves any thing, it proves that the P r e s i d e n t n i a y direct
the judges as well as other officers during pleasure. T h e supervisorypower cannot interfere with the exercise of discretion in the S e c r e t a r y ,
when the law gives it to him, because the faithful execution of the law
consists in the exorcise of his discretion; and whoever disturbs that
exercise, violates the law instead of executing it. It is a power that
25
does not enlarge the President's authority, but rather declares the
result of other powers before given to him in the constitution. It is
corrective, to put aside, where his power is adequate, both dishonesty
and incompetency; but it is not directory nor transcendental, to bring
all the officers and operations of the nation under his sway.
Finally, it is said that the power of removal is fairly applied to
discharge an officer who does not do his duty; and how can this be,
if the President cannot decide what is his duty, and, consequently,
direct its performance'? Sir, the President is responsible for the
use and abuse of his power* If he exercises it fairly, to remove an
officer who does not do his duty, it is well. But if the discharge is
colorably for this, but really to enforce a direction which he had no
right to give, he gains the power he ought not to have, by the abuse
of the power he has.
These are the remarks, sir, which I have supposed would show
the inaccuracy of the Secretary, in that part of his letter which attributes a power over the deposites to the Executive, or to the Secretary
as an Executive officer. In this matter of the deposites, lie is emphatically the minister or agent of Congress- Ho is to give reasons
to Congress, and they are consequently to be his own reasons.
The
reasons of the President are not given, and would not be a justification to the Secretary, if they were. T h e Secretary is to give them
to Congress, his principal, and not to the head of the Executive department, to whom, in this matter, he does not sustain an official relation. It is a charier authority, and to be pursued as the charter directs*
Under this charter, the President has several powers, such as to appoint
commissioners to receive subscriptions, to appoint directors, and to
issue a writ of scire facias. T h e Secretary, also, has powers, as to r e quire transfers of public money, and to remove the deposites, giving his
reasons- It is humbly apprehended that these are different powers in
relation as well as in action, and that the President cannot assume those
which have not a relation to the department of which he is the head.
But how would it follow, sir, if this were otherwise, that Congress
cannot remove the deposites in any event, as the Secretary avers? It
would seem as if the grant to the Executive was set up as a less
startling reason for denying the power to Congress, than a grant to
the Secretary would b e ; but the power is inherent in Congress. It
is one of which they could not divest themselves absolutely and unconditionally. T h e y hold it now, as they always must hold it, subject
only to the right of the Bank; that is to say, except so far as the charter gives the right of possession to the Bank. T h i s right of the Bank
grows out of her covenant to afford safety and to render service. T h e
continuance of her right depends upon the performance of her duty.
T h e covenant of the nation, to leave the deposites with the Bank, and
of the Bank to keep them secure, and to perform other duties in regard
to them, are mutual and dependent covenants. If the Bank commits
a breach, the covenant of the nation is cither discharged or suspended,
and Congress may take care of that which is the property of the nation;
and if the acts imputed to the Bank were a sufficient cause of removal,
Congress were as competent to decide them to be so, at the present
26
session, as the Secretary was before* T h e technical doctrine of the
Secretary is inconsistent with the spirit of the charter, and with the
safety of the nation. I t strips Congress of all power, and lodges it
where there is no responsibility either to the Bank or to Congress. I t
asserts, that Congress could not reclaim the control of the deposites,
under any circumstances, from either the Bank, or its own minister.
It leads to this extraordinary consequence, that if the Bank could have
propitiated the Secretary to connive at the most corrupt employment
of the public treasure, there would have been no remedy for it- If
** offence's gilded h a n d " could have shoved by the Secretary, we
should have seen " the wicked prize itself buy out the law/* T h e
proposition is wholly inadmissible in every possible interpretation of it.
Another proposition, sir, and the most alarming, from the great
practical mischiefs which must flow from it, comes from the Secretary
in the following terms: " T h a t the power reserved to the Secretary
14
of the Treasury does not depend for its exercise merely on the safety
" of the public money in the hands of the Bank, nor upon the fidelity
** with which it has conducted itself; but he has the right to remove
** the deposites, and it is his duty to remove them, whenever the public
" interest or convenience will be promoted by the change." In another
part of his letter, the Secretary of the Treasury says that it is his
duty to remove the deposites " whenever
the change would in any
4t
degree promote the public interest.1* And again he says; *' T h e
" safety of the dc^posites, the ability of the Bank to meet its engage** merits, its fidelity in the performance of its obligations, are only a
" part of the considerations by which his judginent must be guided.
" T h e general interest and convenience of the people must regulate
" his conduct."
T h e application of this doctrine to the present power of the Secretary over the deposites in the State banksim may he seen from another
part of the letter. T h e Secretary says:
T h e law incorporating the
44
Bank has reserved to him, in its fullest extent, the power he before
" possessed. It docs not confer on him a new power, but reserves to
" him his*i former authorityt without any new limitation*** Consequently, it is the Secretary's apprehension that he now has the same
power over the deposites in the State banks, which he claims to have
had over the deposites in the Bank of the United States; and it is this
which makes the subject worthy of the special attention of the House.
Sir, it is an abuse of language to call the charter direction as to
the deposites, a contract, if this be the Secretary's power. It has
none of the features or binding force of a contract. It is wholly d e pendent on his mere favor, pleasure, opinion; upon any tiling short
of, and indeed not short of, the most fantastic caprice. T h e Bank has
no contract with the nation under this construction; and, sir, when I
regard the necessary effects of the asserted power upon the nation at
large, the interests of the Bank disappear; she ceases to he an object
of the least consideration. What are convenience and interests?
W h e r e are they defined ? What acts promote them? What is any
degree of them? What law has made the Secretary of the T r e a s u r y
a judge of them? This nation and this House are variously divided
27
in regard to almost ail the topics of general convenience and interest
that are discussed before them; and here is a challenge of the right,
by a single officer of the Government, to direct the momentum of the
whole revenue of the United States to the support of what he thinks
fit to regard as the general interests and convenience of the people;
and he challenges it as the power witii which Ins office has been clothed
since its creation. A n w o extravagant proposition lias never, in my
humble judgment, been asserted; and it is as unsound in reference to
the subject to which it is applied by the Secretary, as it is dangerous to
the liberty and welfare of the country. T h e question of general con*
venience and interest, in regard to the public deposites,Was settled
by Congress when they agreed that the Bank should have them; and
it was settled for the whole'term of the charter. T h e Secretary has
nothing to do with it. T h e power of removal was given to him to be
exercised for the promotion of a particular interest, or the remedy of
a particular mischief, and for nothing else. General convenience and
interest are results with which Congress have never trusted him, or
meant to trust him, or any body but themselves.
T h e authority given by the charter to the Secretary of the T r e a sury is official, and not personal; and, by necessary implication, it is
limited by the sphere of his office. His powers and duties are fiscal,
and the functions of Ins office are the index to the reasons for which,
and tor which alone, he lias authority to remove the deposites. His
reasons must grow out of his relations to the Bank, to the treasure in
its custody, and to the collection and disposition of that treasure, which
the law confides to him. Tf the deposites are not safe4, his official
connexion with the Bank will apprize him of it: he has the means ot
ascertaining it by the returns made to him, and by examination of
the general accounts of the Bank, if he is not satisfied with the returns.
If the Hank does not perform its duties to the Government, of paving
and transferring the public funds, the Secretary knows it, because he
is the otYiccr to direct the service, and to watch over the performance.
And, beyond this, what official authority has the Secretary? What
official duties does ho perform that can instruct him with reasons for
the removal of the public deposites? Sir, he must leave his office
before he can obtain them, and enter into departments which do not
belong to him: he must take charge of interests that have not been
confided to his office. I have stated to the House why these reasons
have not been explicitly defined in the act, and that it was to continue
a control over the Treasury, which Congress thought might be impaired
if the conditions of its exercise were more explicitly stated. In the
eye of a court, there is discretion, regulated by an appeal to Congress.
In the contemplation of Congress, there is limited power, regulated by
the duties of the Treasury Department, in its relations to the Bank.
Sir, it is a stain upon the Congress that incorporated this Bank—it is
a stain upon the first Congress that organized the Treasury Department—to say that they placed in the power of unknown men for an
indefinite period, and for a period of twenty years without the right of
recall, the whole revenue of the United States, to be used as the Secretary should think the general convenience and interest of the public re*
28
quired. Is it so, sir? And will this House affirm this proposition of t h e
Secretary? Let the nation look to it. If it should be the Secretary*^
opinion that it is for the general convenience and interest of the p e o p l e
that manufactures should decline and die away, he brings a dearth u p o n
the land—he draws the public treasure to another quarter—and t h e y
perish* If internal improvements are not to his mind—if P e n n s y l v a n i a
wants a loan, if New Jersey requires funds, to assist them—if there i s
any proposed rival interest which would be promoted by their decline .
his mandate to the State banks, in promotion of general convenience
and interest, consummates the design. T h e currency is his, to regulate
at his pleasure, and every thinsr dependent on it. Sir, if this theory o f
the Secretary ba true, it was the duty of the Bank of the U n i t e d
States, it is the duty of the deposite banks, to submit to his pleasure_
If his power is constitutionally and legally what he asserts it to be, i t
is the duty of the banks to become his slaves. If all this power o v e r
the Treasury is his lawful power—if he is the arbiter of general c o n venience and interest—if the Executive is the only head to direct anci
control him—it is a theory of universal subserviency to the Executive^
for the profits that are to spring from the application of the public
treasure. It never occurred to me, sir, that men, treading the soil of*
a republic, would present such a doctrine for the review and sanction
of CongressIt has been said, that both Secretary Crawford and S e c r e t a r y
Ingham have asserted a similar doctrine. Sir, without meaning t h e
least disrespect to those officers, I may be permitted to s a y r t h a t
arguments in favor of power are not entitled to most consideration
when they come from those who are to exercise it, A T r e a s u r y
argument, in favor of Treasury power, is not quite as much to be r e lied on, as an argument for the same power even from some other
department- But, sir, the authority is not exactly as it is a p p r e hended to be. In regard to Mr, Secretary Ingham, there seems t o
have occurred one or two animated passages between himself a n d
the President of the Bank, in the course of which a menace was let
off, as to-the use of the public deposites, for a certain purpose, or in
a certain event; but nothing to the effect threatened occurred. M r ,
Secretary Crawford did act, but I do not admit that his action sustains
the present Secretary; or, if it does to a small extent, its effect is
taken off by the opinion of a committee of this House, of whose r e port a part was read the other day by the honorable member fron*
Tennessee. T h e Secretary of the Treasury was invested, by t h e
joint resolution of 30th April, 1816, with the largest powers, to cause
the taxes and other moneys accruing, or becoming: payable to the
United States, to be collected and paid in the legal currency of the
United States, He was required and directed to adopt such measures as he might deem necessary; and there can be no doubt that
such an authority gave to that officer a power, which, since the entire and
effectual restoration of specie payments, has ceased to exist. Thehistcuy
of the disposition of the public moneys bj-Mr. Secretary Crawford, who
came into office in the fall of that year, is given in the report of the
committee upon the memorial or address of Ninian Edwards, made
29
to this House in May, 1824, T h e r e appear to have been in the
year 1S18, and afterwards, two descriptions of acts by Mr. Crawford
affecting the public deposites. O n e of them consisted in using certain
State banks to the W e s t as depositories of the public money, for the
sake of the revenue itself, and because the Bank of the United States
would not receive on deposite, as cash, any thing but the legal currency of the country or its own notes, in which the large receipts of the
United States could not at that time be collected. T h e r e consequently
were cases in which the deposites could not be made in the Bank of the
United States, because the Bank would not receive them in that form
alone in which the T r e a s u r y could make them. It was not, as I a p p r e hend, a case of omission to deposite the public moneys in the Bank of
the United States, but an omission to deposite in that Bank moneys
which the Bank would not receive, and was not bound to receive as
moneys at all, because, although nominally they were the notes of
specie-paying banks, substantially they were not such notes as the B a n k
thought it could convert into specie. T h i s was not a case of exercise
o f power under tho 16th section, but a case o f necessity, arising
from the lawful refusal of the Bank to receive the deposites in the
tmly form in which the T r e a s u r y could make them. T h e other acts
referred to were of a different kind, and they consisted of such dispositions of the public money as Mr. Crawford, in his letter of 13th F e b ruary, 1817, cited by the present Secretary of the T r e a s u r y , says he
has authority to make: that is to say, deposites made with State banks,
to sustain their credit- Upon this point, the committee explicitly say
that "this is no legal employment of public funds; it is nothing but
a gratuitous loan J9 which, certainly, the Secretary was not authorized to m a k e , whatever was the practice. It was precisely of the
same character as the transfer drafts, which appear to have been
placed, by direction of the preseut Secretary, in different hands, during the removal of the public deposites from the Bank of the United
States, and which are liable to precisely the same criticism. T h e authority of Mr. Secretary Crawford, therefore, does not seem competent for the purpose for which it has been cited.
T h e fourth and last general proposition of the Secretary is that
which asserts, that, as the propriety of removing the deposites was
evident, it was consequently his duty to select the places of present
deposite. Sir, on this point I do not mean to ask any considerable
attention of the House; for, although I hold the act of the Secretary
to be against the law of Congress, and one from which the most critical consequences may result, it is not altogether, as I learn, without
the countenance of a previous T r e a s u r y practice, and I mean not to
press it to any other purpose than as a caution to be adverted to in
the disposition of the general subject. T h e authority of the S e c r e t a r y of the T r e a s u r y , under the 16th section of the charter, is not to
remove the deposites, as his letter supposes, but merely to order and
direct that they shall not be made in the Bank of the United States.
W h e n the deposite in that Bank ceases to be lawful by the order of
the Secretary, the general law takes up the subject, and that law gives
to the T r e a s u r e r the power which the Secretary has undertaken to
30
exercise. T h e 4th section of the act of 2d September, 1789, is e n tirely explicit, " that it shall be the duty of the Treasurer to receive
and keep the moneys of the United S t a t e s , " — " t o submit to t h e
Secretary of the Treasury, and to the Comptroller, or either of them,
the inspection of the moneys in his hands" and to give bond, with
sufficient sureties, in the sum of $tlo0,000, payable to the United
States, "with condition for the faithful performance of the duties of
his office, and for the fidelity of the persons to be by him employed*?*
It is the Treasurer who is to choose the place of deposile; and he is
the best officer in theory, as well as the only officer by the law, to
perform the act; because the doctrines of general convenience and
interest are not so likely to reach him. His object will be security,
and his bond is the motive for obtaining it. If there is a T r e a sury practice that has displaced the Treasurer, the practice should be
made to conform to the law, or the law to the practice. As the case?
now stands, the money of the United States is not deposited whenc it
is, by direction and under the sanction of the law. It is placed in
the deposile banks b\ an officer who has not the authority so to place
it; and, in case of controversy, it may possibly be found, not only that
the bond of the Treasurer is of no avail, but that remedies for the
loss or detention of the doposites, are not to be obtained in the natrtc
of the United Stiucs, or in the courts of the United States, but in
private names and in State courts, with all the contingencies incident
to litigation in this form. Whatever may be the practice, it is not
becoming, sir, that .the Treasury of the United States should be in
any predicament but that precisely in which the law has given its direction to place iu
These general propositions of the Secretary are, then, 1 submit
to this House, one and all of them, unsound, and without foundation
in law; and some of them are pregnant with most alarming consequences to the public safety and welfare. If his particular reasons
are dependent on them, as they doubtless are, they fall with their
foundation; and they have, moreover, peculiar defects of their own
us will be seen by the details of more interest to which their consideration will give rise.
Sir, the Secretary admits that the public deposites were safe in the*
Bank of the United States. He admits that the Bank has faithfullyperformed its duty to the Government in every stipulated form. H e
admits it, by the clearest implication, in various parts of his report to
Congress, and places the order of removal upon entirely distinct
grounds.
T h e only valid causes of removal are, then, in my humble judgment, wanting; and, if all the particular causes asserted by
the Secretary could be sustained in fact and law, they would fall short
of a justification. T h e y will, however, be found, one and all, to bo
without support.
Sir, the first and principal reason for the order of the Secretary is*
that the present charter of the Bank will expire in March, 1836,'and
that it is not to be renewed. 1 do not mean to detain the House with
a commentary upon the novel spectacle of a Secretary of the T r e a sury instructing Congress upon the subject of hU constitutional opin-
31
ions in regard to the charter of the B a n k , or upon what they will or
will not think fit themselves to do in regard to the renewal of the
charter. F o r the purposes of this inquiry, I grant that the charter is
not to be renewed* T h e question is, how does that circumstance
justify the present removal?
T h e manner in which the Secretary develops his reasoning on this
head is as striking as it is plain and intelligible. H e begins by an
averment, that, if the deposites should be left in the Bank until the
expiration of the charter, it may be doubted whether the Bank will
have the ability to be prompt in paying them to the G o v e r n m e n t ,
H e proceeds to suggest that the circulation of the B a n k , moreover, if
it continues out till that time, will become a depreciated currency,
not merely by the character of the paper, hut by the cessation of the
public guarantee; that the Bank should be made to reduce her circulation, by reducing her discounts; that the removal of the public d e p o sites will compel her to make this reduction; and that the S t a t e bank
circulation being pushed out, in its place, by means of these deposites
made elsewhere, the notes of the Bank of the United States will bo
withdrawn, and a currency probably mure uniform be substituted in
its place.
Sir, whatever may he the morits of tins plan, there is no doubt that
it is perfectly intelligihle. It is an operation we are acquainted with.
W e know what it m e a n s , and what it is to brine: to pass. But the
question in this place is, what right had the Secretary to take the p u b lic moneys from the Bank of the United States, because its charter
was to expire in M a r c h , 1830J W h a t authority did Cengress mean
to give him over the deposites, from the simple fact of lapse of time?
I confidently assert, none whatever. T h e r e was no contingency in
the circumstance. It was matter of lata) necessity. It must occur;
and the Secretary could not m be better informed that it had occurred
in 1 8 3 3 , than the Congress which granted the charter in 181G were
then informed that it would occur. Sir, il was just as well known in
1816 as it now is, that the 1st of October, 18^*1, was separated by
two years and five months from the 1st of March, 1830; and if lapse
of time had not been deemed an inadequate cause for the removal,
Congress Mould themselves have ordered the deposites to be removed
at the time t h e y thought proper, and have made the removal at that
time a matter of positive e n a c t m e n t , and not of contingency. Now
Congress have not only not done this, but they have done the contrary. T h e y have chartered the Bank fur twenty y e a r s ; they have
bound her to perform services for twenty y e a r s ; and they have ordered
the deposites to be made in her vaults, by necessary implication for
the whole period, subject to the contingent exercise of the power of
removal. It is a violation of the charter, witlwut reasonable color,
for the S e c r e t a r y to m a k e that removal upon the ground of mere time;
and such is the ground his letter occupies, without reference to any
contingency whatsoever.
T h e Secretary has wholly overlooked the provision in the charter
which allows two years to the Bank for winding up its concerns, after
the 3d M a r c h , 1836- T h a t provision runs: " A n d notwithstanding
32
" the expiration of the term for which the said corporation is created*
** it shall be lawful to use the corporate name, style, and capacity, f o r
44
the purpose of suits, for the Jinal settlement and liquidation
of tjk&
** affairs and accounts of the corporation,
a n d for the sale a n d dis**
'* position of their estate, real, personal, and mixed; but not for a n y
** other purpose, or in any other manner whatsoever, nor for a p e r i o d
** e x c e e d i n g two years after the expiration of the said term of i n c o r 44
poration."—Sec. 2 1 .
" A s the act of Congress," says the Secretary, " w h i c h created t h e
c
* corporation, limits its duration to the 3d of Alarch, 1 8 3 6 , it b e c a m e
" m y duty, as the Secretary of the Treasury, in executing the trust
44
confided to me under the law, to look to that period of time as the
** termination
of its corporate existence."
" It was i n c u m b e n t o n m e ,
" in discharging my official duties, to act upon tin* assumption that
44
this corporation would not continue in being after the time a b o v e
" specified." N o w , sir, the corporate existence is not so limited a s
the Secretary has felt it incumbent on him to assume. It is to con-*
tinue two years more, for the very purpose of enabling it to do t h a t
whicli the Secretary says shall be done before. T h e r e is no o n e
operation which he wishes to compel the Bank now to perform, t h a t
she cannot most appropriately perform in the additional two y e a r s *
S h e may diminish or reduce her discounts in any ratio she deems fit^
five per cent, or ten per cent, a month, or more or less, as circunrw
stances may require- S h e may possibly bring in her circulation* i n
the same proportion, though that depends on the pleasure of t h e
holder. She may do every thing she now does, but expand h e r s e l f
after having closed or liquidated a transaction. S h e cannot m a k e a
new loan, but she may continue in force the existing contracts, or*
settle and liquidate them as she may deem expedient. Sir, not o n l y
has the B a n k the right to k e e p out her circulation, and to k e e p u p
her discounts during the whole term of the charter, which right s h e
has purchased and paid for, but it is her duty to do it, unless she i s
disabled by the act of the Secretary. It was her promise in accept—
ing the charter. Her duty to trade is to assist it; to her stockholders^
it is to make an interest upon their capital; and, above all, her duty to t h e
nation is to k e e p within the limits of safety, by due control and r e g u l a tion, the very State bank paper which the Secretary desires to augment*
F o r these duties, in addition to the greater design of securing and distributing the public revenue, the Bank was created, and is bound to t h e i r
performance as long as slu> can perform them with safety to h e r s e l f
and to the country.
Sir, the project of the Secretary of the Treasury astonishes m e ~
it has astonished the country* It is here that we find a pregnant source
of the present agony—it is in the clearly avowed design to bring a
second time upon this land the curse of an unregulated,
uncontrolled^
State bank paper currency.
W e are again to see the drama w h i c k
already, in the course of the present century, has passed before u s ^
and closed in ruin. I f the project shall be successful, we are a g a i n ,
to see these paper missiles shooting in every direction through t h e
country—a derangement of all values—a depreciated circulation—**
suspension of specie payments; 'then a further extension of the s a m e
33
detestable p a p e r — a still greater d e p r e c i a t i o n — w i t h failures of traders,
and failures of banks, in its train—to arrive, at last, at the same
point from which we departed in 1 8 1 7 . Suffer m e to recall to the
recollection of the H o u s e a few o f the more striking e v e n t s of that
day. T h e first B a n k of the United States expired in March, 1 8 1 1 ,
B e t w e e n the 1st of January, 1 8 1 1 , and the close of the y e a r 1 8 1 4 ,
more than o n e hundred n e w banks were established, to supply this
more uniform and better currency.
F o r ten millions of capital called
in by that B a n k , t w e n t y millions of capital, so called, were invested in
these. In the place of five and a half millions, about the amount of
circulation in notes of that bank withdrawn, t w e n t y - t w o millions w e r e
pushed out* T h e n came a suspension of s p e c i e p a y m e n t s , in August
and S e p t e m b e r , 1 8 1 4 . A s an immediate c o n s e q u e n c e of this suspension, the circulation of the country, in the course of fifteen months,
increased fifty per cent., or from forty-five to sixty-eight millions of
dollars; and the fruit of this more uniform currency was the failure of
innumerable traders, mechanics, and e v e n farmers; of o n e hundred and
sixty-five banks, with capitals emounting to thirty millions o f dollars;
and a loss to the United States alone, in the negotiation of her loans,
and in the receipt o f bankrupt paper, to an amount e x c e e d i n g four
millions of dollars. I take this summary from the treatise of Mr.
Gallatin, on the Currency and Banking S y s t e m of the United S t a t e s ,
one of the most valuable contributions that great sagacity and an e n lightened spirit of research have made to the political literature of this
country, and which it is one of the sins of the present B a n k that she
has endeavored to diffuse among the p e o p l e . T h i s m a y enable us to
apprehend what was lost, in the item of property alone, by this better
currency.
W h a t it cost us in reputation, it is impossible to estimate.
D o e s K e n t u c k y wish to see the return o f those days? D o e s P e n n sylvania wish it? D o e s any man wish it, who has property, or the
desire to possess it, and reason to discern the causes of its d e c a y and
destruction? I thank the Secretary for the disclosure of this plan.
I trust in G o d it will be defeated; that the Bank of the United S t a t e s ,
while it is in e x i s t e n c e , m a y be sustained and strengthened by the
public opinion and interests of the people to defeat it; that the sound
and sober State banks of the Union may resist it, for it is their cause;
that the poor m e n and laborers in the land m a y resist it, for it is a
s c h e m e to get from e v e r y one o f them a dollar's worth o f labor for
fifty c e n t s , and to m a k e fraud the currency of the country as much
as paper. Sir, the B a n k of the U n i t e d S t a t e s , in tiny other relation
than to the currency and property of the country, is as little to m e
as to any man under h e a v e n ; but after the prime and vigor of Jife are
p a s s e d , and the p o w e r o f accumulation is g o n e , to s e e the children
stripped, by the monstrous imposture of a paper currency, of all that
the father's industry had provided for t h e m — t h i s , sir, m a y well e x cuse the warmth that d e n o u n c e s this plan as the precursor of universal
dismay and ruin*
I have said, sir, that it is the cause of the sound and sober S t a t e
banks that I a m defending. W h e n the evils of such a currency pre*
vail, the people do not discriminate. A bank note is a bank note,
3
a*
F e a r g i v e s t h e m all t h e s a m e l o o k t o the a p p r e h e n s i v e .
If a few
h a n k s s u s p e n d t h e i r s p e c i e p a y m e n t s , m a n y will d o it; all m u s t d o it %
unless t h e y s e e t h e s t o r m in its a p p r o a c h ^ a n d close t h e i r d o o r s u n t i l
its fury be s p e n t .
T h e B a n k of t h e U n i t e d S t a t e s h e r s e l f m a y w e l l
look for t h a t d a y , if it c o m e s in h e r t i m e , with fear.
l^et h e r n o t b e
w e a k e n e d b e f o r e t h e h o u r of h e r trial- I should r e g a r d t h a t m a n , sir %
•as o n e of t h e g r e a t e s t b e n e f a c t o r s of his c o u n t r y , w h o w o u l d d e v i s e ^
for t h e use of this p e o p l e , s o m e control o v e r t h e p a p e r c u r r e n c y ot*
t h e S t a t e h a n k s , a n d r e l i e v e us from the p e r p e t u a l r e c u r r e n c e of c o n *
s t i t u t i o n a l d o u b t s a n d p a r r y c o n t e n t i o n , to w h i c h the c a r e e r of a B a n k
of t h e U n i t e d S t a t e s s e e m * n e c e s s a r i l y e x p o s e d .
C o n t r o l <>f s o m e
k i n d is e s s e n t i a l
it is i n d i s p e n s a b l e ; t h e r e c a n he no p r o p e r l y , o r ,
w h a t is t h e s a m e thinsr, no s e c u r i t y or u n i f o r m i t y TO its v a l u e , w i t h o u t
it. L e t us h a v e a r e s p i t e from t h e evil while t h e law will jjive it t o
u s . L e t us not ho t u r n e d oft" before t h e w a r r a n t of e x e c u t i o n calls f o r
it- L e t t w o y e a r s m o r e he driven to s o b e r reflection bv the p e o p l e , t h a t
t h e r e m a y be a locus pcititrntur
a l l o w e d To those w h o a r e n o w p r o p o s i n g tliis p l a n , without s n ^ e s t i n i r the m e a n s of c o n t r o l , or a p p e a r i n g t o t h i n k t h a t t h e y art* n e c e s s a r y .
B u t , sir, t h e S e c r e t a r y s a y s t h a t the d e p o s i n g will not be p r o m p t l y
p a i d , if t h e y a r e left in t h e B a n k until t h e c h a r r e r e x p i r e s , a n d it i s
his d u t y , t h e r e f o r e , not to l e a v e t h e m t h e r e . W h a t is it rltat it is a p p r e h e n d e d will c a u s e ibis default'?
D o t ^ the S e c r e t a r y suppose t h a t
p r i v a t e d e p o s i t e e will c o n t i n u e in the H a n k to the s a m e t i m e , rind, b y
t h e i r d e m a n d s , interfere with t h e p a y m e n t s TO the public?
If i n d i v i d u a l d e p o s i t e s d o not r e m a i n , all will b e a d m i t t e d to be w e l l .
The
p u b l i c d e p o s i t e s will be p a i d t h e n , as t h e y a r e now p a i d , p r o m p t l y .
I f t h e p r i v a t e d e p o s i t e s d o r e m a i n , a n d the h a n k n o t e s c o n t i n u e i n
c i r c u l a t i o n t o t h e i r old a m o u n t , t h e n , sir, let the T r e a s u r y , for o n c e ,
t r u s t to the instinct of self-interest in The p e o p l e , a n d b e l i e v e that w h a t
all c o n c u r in d o i n g ^>r t h e m s e l v e s , w h e n t h e y h a v e t h e r e a d i e s t m e a n s
o f d o i n g otherwise 1 , if t h e y p l e a s e , c a n n o t he v e r y d a n g e r o u s t o t h e
publicS o u n d r e a s o n i n g a n d e x p e r i e n c e a l i k e e x p o s e this T r e a s u r y
apprehension,
A h a n k , b a v i n ? t h e r e s o u r c e s that t h e B a n k of t h o
U n i t e d S t a t e s is a d m i t t e d to h a v e , w h e n s h e a r r i v e s ;u t h e t e r m of*
h e r c h a r t e r , i n c r e a s e s , from that m o m e n t , in s t r e n g t h : b e c a u s e h e r c a p i t a l is then to be r e t u r n e d to h e r , and h e r d e b t o r s h a v e b e e n p r e *
v i o u s l y a d m o n i s h e d t h a t t h e y must then be p r e p a r e d ro r e t u r n it t o
her- O t h e r h a n k s m a y t h e n assist, by t h e i r e x p a n s i o n , t h e l i q u i d a t i o n
o f Iter d e b t s , and t h e y m a y do it safely, to a c o n s i d e r a b l e e x t e n t , a s
s h e c a n n o t h a v e , e r , if she h a s , ^he c a n n o t e x e r c i s e , a p o w e r to d i s ~
t r e s s t h e m b y h e r d e m a n d s , without c o m b i n i n g a vast force of p u b l i c
o p i n i o n a g a i n s t h e r , that will effectually resist h e r .
T o a s k of t h o
S t a t e b a n k s w h a t it must d i s t r e s s t h e m to «rive, a n d w h a t is n o t n e *
c e s s m y to t h e ("nited S t a t e s * B a n k for o p e r a t i o n s t h e n d i s c o n t i n u e d ,
w o u l d h e as idle in h e r a s t h e a p p r e h e n s i o n of it is in o t h e r s .
It
c a n n o t o c c u r . T h e r e must he a r e a s o n a b l e a r r a n g e m e n t b e t w e e n
t h e U n i t e d S t a t e s ' B a n k a n d all t h e S t a t e b a n k s who assist in a b s o r b i n g h e r l o a n s , to p r e v e n t o r to m i t i g a t e t h e d i s t r e s s t h a t t h e
w i t h d r a w i n g of a lar<>e c a p i t a l would orherwe-o occasio?\.
This,
35
t h e r e f o r e , is the m o m e n t w h e n t h e B a n k of t h e U n i t e d S t a t e s will
h a v e the g r e a t e s t p o w e r for h e r own p r o t e c t i o n , w i t h o u t h a v i n g it for
the a n n o y a n c e of the S t a t e h a n k s ; a n d , unless t h e r e is a g e n e r a l c r a s h
w h i c h shall m a k e d e p o s i t e e unsafe e v e r y w h e r e , t h e y will h e as safe
in t h e B a n k of t h e United S t a t e s as t h e y c a n he a n y w h e r e .
S i r , this is the result of e x p e r i e n c e , d e r i v e d from an o p e r a t i o n w h i c h
t h e S e c r e t a r y of t h e T r e a s u r y has s t r a n g e l y o v e r l o o k e d .
T h e h o n o r a b l e m e m b e r from T e n n e s s e e , in the c o u r s e of his a r g u m e n t , m a d e o n e r e m a r k , w h i c h , not b e i n g at all n e c e s s a r y hi t h e c o n sideration of t h e p r e s e n t question, I m a y he e x c u s e d for s a y i n g , w a s
a remark which I regretted.
T h e irentleman took o c c a s i o n to s a y ,
t h a t the first H a n k of t h e U n i t e d S t a t e s was c h a r g e d with h a v i n g b e e n
given o v e r to political a b u s e s a n d to the aid of t h e a r i s t o c r a c y , in
opposition to the G o v e r n m e n t of the c o u n t r y ; and t h a t , in this re*
s p e c t , the p r e s e n t B a n k had followed in h e r s t e p s .
S i r , I o w e a d e b t to t h e d i r e c t o r s of that first B a n k w h i c h it would
ill b e c o m e m e not to e n d e a v o r to d i s c h a r g e , in p a r t , on such an o c c a sion as this. I a m i n d e b t e d to those jjeiitlenien for h a v i n g first held
out their h a n d to m e in tin* path of niv profession.
Willi such of
t h e m as h a v e passed a w a y , L lived in u n b r o k e n friendship a n d affection till their d e a t h , a n d t h e few w h o r e m a i n a r e e q u a l l y w o r t h y of
t h e s e n t i m e n t . I should feel it to be an a b a n d o n m e n t of m y d u t y if I
did not d e n y the i m p u t a t i o n w h i c h has b e e n cast upon t h e m , not by
t h e g e n t l e m a n from T e n n e s s e e , but by those w h o m h e q u o t e s . I w a s
a d i r e c t o r of t h a t B a n k d u r i n g the last y e a r s of h e r c h a r t e r , w h e n I
w a s too y o u n g to g o v e r n h e r councils, though not TO u n d e r s t a n d t h e m ;
a n d , as o n e of those d i r e c t o r s , I h a v e assisted in liquidating h e r c o n c e r n s . S i r , the d i r e c t o r s of the p a r e n t B a n k (I k n o w n o t h i n g of tl*e
b r a n c h e s , ) wvvo a b o d y of as h o n o r a b l e m e n , as i m p a r t i a l , and as
faithful to t h e i r trust, as a n y m e n t h a t e v e r lived. T h e i r , w a s not <x
politician at t h e i r h o a r d , nor a m a n w h o g a v e u p h i m s e l f to a n y
t h i n g inn the p e r f o r m a n c e of d u t y to his trust.
At their h e a d was a
gallant soldier, w h o , d u r i n g the w a r of tin* R e v o l u t i o n , w a s a p r i s o n e r
l o t h e e n e m i e s of Ins c o u n t r y , and w ho, a few y e a r s s i n c e , d e s c e n d e d
to his g r a v e , e s t e e m e d and r e s p e c t e d by all who k n e w h i m , most of
all for his r e c t i t u d e as well as fearlessness of p u r p o s e , in the e x e c u tion of e v e r y trust h e u n d e r t o o k . S i r , J k n o w the B a n k was c h a r g e d
as t h e g e n t l e m a n s t a t e s , hut the charges w e r e unjust a n d u n t r u e . F r o m
w h o m or w h y s h e r e c e i v e d t h e bad n a m e for w h i c h she w a s h u n t e d
d o w n , it d o e s not c o n c e r n the p r e s e n t question to i n q u i r e .
I t is t h e history of t h e liquidation of this B a n k t h a t the S e c r e t a r y
has o v e r l o o k e d , a n d it is t h e most t r i u m p h a n t a n s w e r to his d o c t r i i w
of default and d e p r e c i a t i o n .
H e r c h a r t e r e x p i r e d on t h e :Jd M a r c h ,
1 8 1 1 , w h e n h e r c o r p o r a t e e x i s t e n c e c e a s e d at o n c e a n d forever.
O n the Jst J a n u a r y , 1 8 1 1 , her situation was as follows:
T h e a m o u n t of h e r notes d i s c o u n t e d and loans w a s
#17,759,001
Public deposites, $0,474,402
P r i v a t e depositee, 3,855,402
N o t e s in c i r c u l a t i o n ,
*
6,070,15"!
Specie,
5,317,885
36
On the 1st March, 1811, it was as follows;
The amount of discounts and loans,
Public deposites, *
- $2,874,833
Private deposites, 3,583,596
Notes in circulation,
6,552,875
Specie,
.
On the 1st September, 1811, it was
T h e amount of discounts and loans,
Public deposites, Private deposites, Notes in circulation,
Specie,
-
as follows;
*
- $ 322,349
448,112
2,963,209
And on the 1st March, 1812, it was as follows;
The amount of discounts and loans,
Public deposites, $ 8],517
Private deposites, 223,442
1,070,459
Notes in circulation,
Specie,
-
$14,587 l 134r
4,835,70fr
$7,152,786*
4,500,527
$3,792,975
6,116,776
Thus, from the 1st March, 1811, two days before the charter e x pired, to the 1st September, 1811, the Bank paid, as the'above state*
ments show—
Public deposites, $2,552,484
Private deposites,
3,135,484
Bank notes,
3,589,566
$9,277,534
And her specie fell only $335,175*
From the 1st March, 1811, to the 1st March, 1812, she paid
Public deposites, $2,793,316
Private dcposiies,
*
3,360,154
Bank notes,
.
.
.
5,482,416
$11,635,886*
And her specie increased from $4,116,776 to $6,116,796, being an
increase of $1,281,074.
Comparing her capital with that of the present Bank, which is three
and a half times greater, the present Bank might stand with equal
safety on the 1st of January, 1836, with the following discounts atwt
liabilities:
Notes and domestic bills,
- $62,156,503
Notes in circulation, 21,245,530
Public deposites,
22,660,407
Private deposites,
13,493,907
Whereas, on the 1st of October, 1833, the discounts and liabilities
of the present Bank were as follows:
Notes and domestic bills,
- $60,094,202
Notes in circulation, 19,128,189
Public depositee,
9,868,434
Private deposites,
8,008,862
37
I n one particular, and only in o n e , was the provision o f the first
S a n k better, for the d a y o f trial, than that of the present Bank.
Her
s p e c i e , on the 1st of J a n u a r y , 1 8 1 1 , was $ 5 , 3 1 7 , 5 8 5 , being more than
equal to one-half of her capital; while that o f the present B a n k , on the
1st of October, 1 8 3 3 , was $ 1 0 , 6 6 3 , 4 4 1 — a little more than t w o - s e venths of her capital. T h e specie of the first B a n k had h e e n greatly
augmented by importations under t\m royal orders from the S p a n i s h
colonies, which the embargo and other restrictions had prevented from
going abroad; but it was increased, instead of being diminished, by the
liquidation of her concerns. S o much, sir, for the probability of default
in paying the public deposites. A s to depreciation o f her notes, which
the Secretary also a p p r e h e n d s — i f the notes are to depreciate because
they will be paid on presentation, because the quantity in circulation
will be daily diminished, because the residue outstanding will be o f
increased value as e x c h a n g e , and b e c a u s e , unless Congress shall pass
a law to the contrary, the public guarantee will continue, then, but
not otherwise, the Secretary's fears m a y prove true. Sir, the S e c r e tary has erred, e v e n as to the matter of the guarantee. T h e letter o f
the Secretary says that " this obligation on the part o f the United
" States will c e a s e on the 3 d of March, 1 8 3 6 , w h e n the charter
*4 expires; and as soon as this happens, all the outstanding notes will
** lose the peculiar value they now possess." T h e fourteenth section
of the charter says otherwise.
It says " that the bills or notes o f the
** said corporation originally made p a y a b l e , or which shall have b e 4
* come payable on demand, shall be receivable in all payments to
** the United States, unless otherwise
directed
b y an act of C o n " grens." T h e y will be notes of the said corporation as much after
the charter expires as they now are.
But, sir, this apprehension o f the n o n - p a y m e n t o f the public d e p o sites, if left in the B a n k until March, 1 8 3 6 , will appear, from another
p a p e r presented by the same D e p a r t m e n t to this H o u s e , to have b e e n
changed into an apprehension that, at that time, there would b e no
deposites any where to be paid. " Judging
from the past*** the
S e c r e t a r y ' s letter s a y s , " it is highly probable they will a l w a y s amount
t o several millions." But u reference to the past, only, is not the
best way of ascertaining what, under our altered revenue s y s t e m , will
be its amount. A c c o r d i n g l y , in his annual report on the state of the
finances, made in the last month, the S e c r e t a r y j u d g e s otherwise than
b y a reference to the past. I ask the attention of the H o u s e to a few
extracts from this report.
T h e balance in the T r e a s u r y on the 31st of D e c e m b e r , 1 8 3 4 , is
estimated to be $ 2 , 9 8 1 , 7 9 6 0 5 .
T h e Secretary, after the statement which he d e e m s necessary to
justify this result, proceeds to say:
** I n this v i e w of the receipts o f 1 8 3 4 , the income o f the y e a r will
41
about equal the estimated expenditure; and, with the aid of the
Cft
balance in the T r e a s u r y on the 1st of January next, it will be suffi" cient for all the wants of the G o v e r n m e n t , including the amount
•** necessary to p a y off the residue of the national d e b t . "
H e further says: " I f the entire amount of appropriations pro*** posed in the estimates for 1 8 3 4 were also to be required within the
38
** year, there would not be money enough in the T r e a s u r y to meet
tA
them, after satisfying the balances above stated, and paying oflf the
" public d e b t . "
H e says further: *4 In estimating the balance in the T r e a s u r y at41
the close of 1 8 3 4 , I have therefore assumed that a portion of the
4
* estimates of expenditures herewith submitted will not be used during
** the year; and that balances of appropriations, equal to the amount
" at the close of Jthe present year, will, in like manner, remain in the
" T r e a s u r y at the end of the y e a r 1834, and go into the expenses of
*4 the succeeding year; and it is not necessary to raise money for the
*' public use sooner than it will probably he needed. But the balance
** stated at the end of 18-J4 is not to be considered as a clear surplus,
4t
I t will still be chargeable with the amount of appropriations csti-*' mated to remain unexpended at that time.
44
F r o m this state; of tire finances, and of the proposed appropria4t
tions, it is evident that a reduction of the revenue cannot, at this
" time, be made without injury to the public service. Under the act
** of the last session, the receipts of 18*35 will be less than those of
** 1834, as a further reduction in the rate of duties will take elfect on
*4 the 1st of J a n u a r y , 18-55; and if the appropriations
should be
** kept up to the amount authorised for the present year, the charge
" upon the Treasury in 18*$5 would be more than it could
probably
44
meet.
Jiut the debt will then hare been entirely paid; and^ if a
•' guarded rule of appropriation
is at once commenced j there will be
" no difficulty in bringing down the expenditure ^ without injury to
** the public
sen:ice.
** If the revenue is not to be reduced morcr than the existing laws
14
provide for, there seems to be no sufficient reason to open, at this
41
time, the vexed question of the tariff. T h e manner in which duties
41
are now apportioned on dilferent articles would be liable to insu41
perable objections, if it were to he considered as a settled and p e r 44
maneut system. But the law is temporary on the face of it, and
44
WHS intended as a compromise between conflicting interests; and%
*' unless the revenue to arise under it should hereafter be more pro*
44
ductive than is anticipated\
it will be necessary", in two years from
44
this time, to impose duties on articles that are now free^ in order
44
to meet the current expenses of the
Government."
T h e existence of the several millions in the T r e a s u r y in March, 1 8 3 6 ,
is therefore to depend on the future action of Congress upon the report
of the Committee of W a y s and Means; and if the existence of a n y
public money in any bank at that time is to depend on the future
action of Congress, how could that constitute a motive for removingthe deposites in October, 1838?
T h e S e c r e t a r y of the* T r e a s u r y presents another reason for withdrawing the deposites on the 1st of October, which is very r e m a r k able. If I understand the S e c r e t a r y , he makes the removal in O c t o ber a consequence of the reductions by the Bank in August and S e p tember, T h e remarkable feature of this reason is, that the v e r y
effect he intended to produce by the removal, and which, if the B a n k
did reduce, was produced by the known intention of removal, is p r e -
39
ferred as the ground of complaint against the Bank, and as the justification of the removal. H e complains of the B a n k , because she
acted as if she meant to carry his design into efleet; and he removes
the deposites because the B a n k took measures to prevent the removal
from distressing her.
T h e amount of reductions in August and
September, as the Secretary states them, was ft4,06(>,146, or
$2,000,000 per month; and, as her discounts and bills in August were
$64,000,000, there is a simple rule in arithmetic by which we may
ascertain the monthly reduction necessary to effect the S e c r e t a r y ' s
object during the thirty-one months of the charter which then r e mained. It is clear, sir, that the monthly reduction must be more
than two millions; and now that the deposites are removed, and we
arc in the month of J a n u a r y , when the loans and bills stand at about
$55,000,000, the monthly reductions of the Bank for the twenty-six
remaining months of the charter must be more than ,^2,000,000, or
the object which the Secretary meant to effect will not be accomplished. It is r e m a r k a b l e that the a p p a r e n t coincidence of the B a n k
with the design of the Secretary should be a ground of complaint
against the Bank.
T h e S e c r e t a r y says, and gentlemen concur with him in saying,
that the Bank have reduced too rapidly. Suppose it to be so; did the
Secretary inform the Bank what amount of reduction he thought sufficient?
Did he tell them of the amounts to be from time to time r e moved, and the places at which they would be required? No.
He
says that ** the nature of the inquiry at the four principal b a n k s , " (of
which the Bank knew nothing,) " showed that the immediate with** drawal, so as to distress the B a n k , was not contemplated; and that
** if any apprehensions to the contrary were felt by the B a n k , an
** inquiry at the Department would no doubt have been promptly
" and satisfactorily a n s w e r e d , " W h a t , sir, was the B a n k to come to
the Treasury Department to ask for the suspension of a demand,
which she was bound to be iu readiness to pay whenever made?
Is
this to be said while the sound of the honorable m e m b e r ' s voice, upon
the subject of the throe per cents, is still in our cars? While this
House has in its fresh recollection the charge against the B a n k , that
she asked in March a suspension of the discharge of half the three per
cents, from J u l y to O c t o b e r , 1 8 3 2 , " because the Bank was not able to
pay them?" No, sir; that was sufficient warning to Air. Biddle not to
approach the D e p a r t m e n t upon the subject, even had he been invited;
?md, if he had approached it, under any circumstances, we should
have heard again the same changes rung upon the inability to pay the
deposites that we have heard in regard to the three per centsThe
master of the removal was in the T r e a s u r y , T h e time and proportions depended upon him; and, if his concern for the country was
excited, if the reductions of the Bank were too rapid according to
the T r e a s u r y views, the r e m e d y was in the power of the T r e a s u r y ,
and should have been applied.
S i r , the B a n k of the United States acted wisely and warily in
August and S e p t e m b e r , Although the removal of the deposites did
not t a k e place until the 1st of October, the intention to remove was
40
fully known in July. T h e agency to negotiate with the State banks
was announced in the Globe on the 25th of July; and, whatever the
public might think, it was not for the Bank to act in any other faith
than that the purpose would be immediately and relentlessly executed.
It was the clear duty of the Board to prepare itself without a moment's delay- T h e position of the Bank was every where known to
the Treasury Department by the weekly statements. Her widely
dispersed branches were to be strengthened wherever they required
it. Her circulation was large, and she was in the practice of assisting it by an almost universal payment at all points, without regard to
the tenor of the notes- T h e House may judge of the extent of a c commodation which the Bank was in the practice of giving, by the
thirty-nine millions of these notes paid, out of place, in the year
1832- T h e y may know it further by the fact, that, of these branch
notes, $ 1 , 5 4 0 , 0 0 0 were paid at the Bank of the United States in
Philadelphia, during the very months of August and September,
1833. This circulation was to be sustained and increased, to be still
more facilitated, as it since has been, to keep the people and the
Bank from feeling the consequences of the measure. All this required that the Bank should not sleep upon lier post. T h e least dishonor suffered by that Bank would have produced universal disorder
in the country.
I understand the honorable member from Tennessee to say, that the
reductions by the Bank, in August and September last, were greater
than they ever had been in any other two months since her institution*
I join issue upon this allegation. T h e y have been greater in other
months, and they were greater in the very same months of the preceding year.
In August and September, 1833, the amount reduced
was ~ 84,066,146
In August and September, 183^, it was
4,315,678
being the difference between $ 6 8 , 0 0 8 , 9 8 8 , the discounts and domestic
bills in August, 18-J2, and $ 6 3 , 6 9 3 , 3 1 0 , their amount in October; and
yet there was no alarm whatever in 1832. There was, moreover,
a greater reduction, by a million and a half, from July to October,
1832, than there was between the same months in the present year,
and without any distress or alarm.
T h e discounts and hills in July, 1833, were
- $63,369,897
T h e discounts and bills in October, 1833, were 60,094,202
Reduction,
T h e amount in July, 1832, was
T h e amount in October, 1 8 3 2 ,
Reduction,
-
$3,275,695
-
$68,416,081
63,693,330
-
$4,722,771
There was a greater State bank debt in October, 1 8 3 2 , than in
the same month, 1833, and yet there was no alarm. In October,
41
1883, it was $ 2 , 2 8 5 , 5 7 3 , and in October, 1832, it was $2,820,114.
T h e reason of the difference may possibly show to gentlemen that
mere reduction is an insufficient element for determining the pressure
in the market- I n October, 1832, the payment of the three per
cents was to restore to the community a portion of the sums called in
by the Bank* I n October, 1833, the deposites were to go where individuals must have a less beneficial use of them, and where they
could have no use of them, except as the State banks should choose
to lend upon them.
Nor did the whole reduction, from October to December, 1833,
cause the existing distress. It is well, sir, to present these details,
that the House may reflect upon them, and learn how far the S e c r e tary is responsible for the condition of the country. T h e Bank paid
out, in the two months of October and December, $ 2 4 6 , 7 6 6 more
than she received from the community.
Jieceipts*
I n October, 1833, her discounts and
bills were
$60,094,202
In December they were,
54,453,104
$5,641,098
In October the public depoPayments*
sites were
$9,868,434
In December they were,
5,162,259
$4,706,175
I n October the private d e posites were
$8,008,862
In December they were,
6,827,173
1,181,689
5,887,864
Excess of payments over receipts, $246,766
Nor was the reduction by the Bank of the United States, in the
month of December, rhe cause of the distress.
In December, 1833, the discounts and bills were
$54,453,104
In January, 1834, they are,
54,911,461
Showing an actual increase of -
-
-
$458,357
Yet, in that month, the public and private deposites were paid to
the extent of $1,024,058- Yes, sir, in this very month, when it has
been said that the Bank had grasped the debtor's throat, to compel
an outcry to Congress for the return of the deposites, the Bank extended her loans nearly half a million of dollars, while she paid more
than a million of her deposites.
Nor was the entire reduction in the four commercial cities, from
October, 1 8 3 3 , to J a n u a r y , 1834, the cause of the prevailing distress*
I n October, 1 8 3 3 , the loans and bills in those places were as follows:
42
Philadelphia,
New York,
Boston, Baltimore,
-
-
-
_
-
_
-
_
$7,156,487
6,180,883
3,965,283
2,033,318
819,335,971
In J a n u a r y , 1 8 3 4 , they are as follows:
Philadelphia,
Now York,
.
.
.
.
Boston, Baltimore,
.
.
.
.
.
.
$7,979,233
5,970,055
2,316,034
1,954,045
$18,219,367
Making £ 1 , 1 1 6 , 6 0 4 reduction in the four cities during the three
preceding months.
T h e cause of the alarm and general paralysis are not to be found,
then, in the conduct of the Bank of the United States, T h e y are to
be sought for and found in the removal of the deposites; in the universal derangement of the money system of the country by that
means; in the just refusal of the United States' Bank to extend herself to her own undoing, or to keep herself unprepared for the coming storm, by remaining as extended as she was; in the inability of
the State banks to us*? tin.* deposites as beneficially as they were used
before; and in the refusal of capitalists to lend their money and adventure their property in the face of a project to overwhelm t h e
country with an uncontrollable State bank paper currency.
What, sir, does the Secretary of the T r e a s u r y expect of the Bank?
What measure of justice does he render to her? H e says, the d e sign of removing the deposites was to compel reduction, and he censures her because she reduces. l i e complains that she increased her
discounts and domestic, bills, from December, 1832, to August, 1 8 3 3 ,
more* than two millions and a half, when this was the very season in
which trade requires the increase, and it was wholly in the purchase
of domestic bills. l i e complains that she reduced her discounts, in
August and September, 1833, four millions of dollars, when this is
the very season of payment, when trade does not require the means,
and three millions of the amount was In* the payment of domestic
bills which had arrived at maturity. He complains of the increase
of loans in December, 1830, when they were $42,402,304; and
he complains of reductions in August, 1833, when thev were
twenty-two millions more, viz: $ 6 4 , 1 6 0 , 3 4 9 .
H e compfain* of
reductions in 1833, when, in the whole, from J u n e to December,
they have been but # 6 1 0 , 5 0 8 more than they were in 1832; and the
Bank has had also to pay the public deposites.*
* The statements which verify these positions may be more intelligibly
placed in a note than in the body of the argument, as they were stated to the
House*
I. The variations in the increase and diminution of discounts and domestic
bills through the years 1832 and 1833, are shown by the following statement:
43
Sir, it is c l e a r that the B a n k must abide t h e r e p r o a c h e s of the S e c r e t a r y , w h a t e v e r she d o e s . B u t what has she not a right to e x p e c t
from this H o u s e , from the P e o p l e , from the solid S t a t e b a n k s , from
all who a r e c o n c e r n e d in the c u r r e n c y , and the p r o p e r t y it circulates?
T h e i r safety d e p e n d s on her pursuing the course she h a s t r a c e d o u t ,
from which n e i t h e r the r e p r o a c h e s of e n e m i e s , nor the e n t r e a t i e s of
friends, should divert her. F o r t h e former I h a v e no a p p r e h e n s i o n ;
and for the l a t t e r , although I e n t e r t a i n s o m e t e a r s , I trust that an a n swer will a l w a y s b e found by the able B o a r d which a d m i n i s t e r s t h e
concerns of the B a n k , in the superior claims of public d u t y .
T h e S e c r e t a r y asserts, s i r — a n d it s e e m s to b e a favorite a s s e r t i o n ,
as it is to be found in m o r e t h a n o n e p l a c e in t h e l e t t e r — h e a s s e r t s
that the B a n k has violated the c h a r t e r .
H e s a y s , t h a t , ** instead of a
Board constituted of at least seven d i r e c t o r s , a c c o r d i n g to the c h a r t e r ,
at which those a p p o i n t e d by the U n i t e d S t a t e s h a v e a right to b e
it
p r e s e n t , m a n y of t h e most i m p o r t a n t m o n e y t r a n s a c t i o n s of t h e
it
B a n k h a v e b e e n , and still a r e , placed u n d e r the control of a c o m ct
m i t t e e , d e n o m i n a t e d the E x c h a n g e C o m m i t t e e , of which no o n e of
44
the public directors has been allowed to b e a m e m b e r siuce t h e
" c o m m e n c e m e n t of the p r e s e n t y e a r .
This committee is not even
** elected b*/ the. Hoard* and the pub fie directors
have no voice in
" their appointment.
T h e y are chosen by t h e P r e s i d e n t of t h e B a n k ;
** and the business of the institution, w h i c h ought to be d e c i d e d on
44
by the Board of D i r e c t o r s , is, in m a n y i n s t a n c e s , t r a n s a c t e d by this
44
committee: and no one has a right to be p r e s e n t at their p r o c e e d i n g s
** but the P r e s i d e n t , a n d those w h o m h e shall please to n a m e as
** m e m b e r s of this c o m m i t t e e . T h u s loans a r e m a d e , u n k n o w n at
** the time to a majority of the B o a r d , and p a p e r discounted which
44
might p r o b a b l y be rejected a t a r e g u l a r m e e t i n g of t h e d i r e c t o r s .
44
T h e most important o p e r a t i o n s of the B a n k a r e s o m e t i m e s resolved
** on a n d e x e c u t e d b y this c o m m i t t e e ; and its m e a s u r e s a r e , it a p '* p e a r s , d e s i g n e d l y , and by regular s y s t e m , so a r r a n g e d as to conceal
*4 from t h e officers of the G o v e r n m e n t t r a n s a c t i o n s in which the public
44
interests a r e d e e p l y involved, A n d this fact alone furnishes e v i 44
donee too strong to be resisted, that the concealment
of
certain
Domestic hills,
ffixcounts.
Total.
January, 1832,
?16,691,129
49,602,577
66,293,707
June,
.
22,850,769
46,712.040
69,562,809
December,
16,047,507
44,924,118
61,571,625
January, 1833,
18,069,043
43,626,870
61,695,913
June,
22,427,702
40,627,094
63,054,796
December,
15,672,537
38,780,567
54,453,104
Total reduction from June to December, 1832, 7,991,184
Total redaction from June to December, 1833, *
8,601,692
2. T h e increase of two millions and a half, from January to August, 1833,
was wholly in domestic bills, while the discounts were reduced.
Domestic bilk*
Dheou-nts*
January, 1833,
*
$18,069,043
$43,626,870
August, 1833,
*
,
20,923,243
43,237,106
Increase,
«2,854,200
389,764 diminution.
44
44
important
operations of the corporation from the officers of the
Government is one of the objects which is intended to be aecom44
plished by means of this committee. The plain words of the charter
44
are violated^ in order to deprive the people of the United States of
44
one of the principal securities which the law had provided to guard
44
their interest, and to render more safe the public money intrusted
44
to the care of the B a n k / 1
Now, sir* the Secretary cannot have examined this matter, or he
would have entertained a different opinion. T h e r e is no violation
whatever of the charter in giving the President authority to appoint
the Committee of Exchange, or in authorising that committee to
transact the business of exchange, or even to discount, if such a
power should be deemed expedient.
T h e Secretary appears to rely on the fourth fundamental law of
the corporation, which enacts, that 4t not less than seven directors
44
shall constitute a Board for the transaction of business, of whom
44
the President shall always be one, except in case of sickness or
44
necessary absence; in which case his place may be supplied by any
44
other director whom he, by writing under his hand, shall depute for
44
that purpose. And the director so deputed may do and transact all
44
necessary business belonging to the office of the President of the
44
said corporation, during the continuance of the sickness or necessary
44
absence of the President/* B y transaction of business, the S e c r e tary would seem to understand exclusively the execution of business;
the carrying of a direction, order, or law, into act and effect.
But
this is not the restricted meaning of the word in this place, for several
satisfactory reasons. J. Such a restriction upon the execution of the
various business of the Bank, as that not less than seven directors
should form a quorum to do it, would render the execution of business
impossible. Not a deposite could be received or paid, or the simplest
operation of business performed, without the presence of such a
quorum. 2. Accordingly, the charter, by the UM^ of a different term,
in a different place, shows that this is not the meaning of the words
transaction of business.
T h e tenth section gives to the directors for
4
the time being * power to appoint such officers, clerks, and servants
44
under them as shall be necessary for executing the business of the
44
said corporation, and to allow them such compensation for their
44
services, respectively, as shall be reasonable." 3 . T h e word, in
its proper sense, includes both execution and direction. 4 . T h e
authority of the Hoard, as would naturally occur to most people, is
legislative;
and although they can also execute and perform definitively any business they please, it must depend upon the law which
they prescribe to themselves, or which is prescribed for them by the
charter and by-laws, what part they will perform in person, and what
they will commit to others. T h e quomtm is appointed for the exercise
o f authority as a Board—for legislation, and not for the execution of
the laws or directions of the Board. T h e body is, by the very name
of its office, directive and not executive.
5. T h i s is clearly implied
from the provision which gives to a substituted director the power
to transact all the necessary business belonging to the office of P r e -
44
45
sident, during the continuance o f the President's sickness or n e c e s sary absence- W h a t is the necessary business belonging to the office
of President! T h e charter does not declare ir. P e r h a p s the only
business which it allots to him, expressly, i* that o f signing notes of a
certain description to g i v e them a certain effect.
W h e n c e , then, can
he get it, e x c e p t from the Board o f D i r e c t o r s , or the b y - l a w s and
regulations o f the Bank? A n d if he gets it from the Board, they must
have power to authorize and direct, and the President, by virtue
thereof, must h a v e power to e x e c u t e .
Sir, the p o w e r o f making by-laws and regulations for the g o v e r n ment of the B a n k has been wholly o v e r l o o k e d by the S e c r e t a r y .
T h e seventh section o f the charter gives to the whole corporation,
the stockholders, the power to ** ordain, establish, and put in e x e c u *fc tion such b y - l a w s , ordinances, and regulations, as they shall d e e m
" necessary and convenient for the g o v e r n m e n t of the said corporation,
44
not being contrary to the constitution thereof, or to the laws o f the
** United S t a t e s ; " and the present situation of this p o w e r is thus: It
has b e e n settled for a century, that where a charter commits the
power of making by-laws to the whole b o d y of the corporation, the
general mass of corporators, they may delegate the power to a select
body, who then represent the whole body in their acts o f legislation*
T h e contrary o f this is held to be the law when the p o w e r is g i v e n
by charter to a select body, for they cannot delegate their p o w e r to
any other body. N o w , sir, the whole body o f the corporation o f the
Bank o f the United Suites, the stockholders, at a general m e e t i n g
held on the 6th January, 1 8 1 7 , did d e l e g a t e their power o f making
b y - l a w s and regulations to the Board of Directors, after passing a
few by-laws not affecting the present inquiry. T h e act by which this
was done declares, ** that the directors shall have p o w e r to m a k e
" such further rules, regulations, and b y - l a w s , as they shall d e e m
** necessary and convenient for the g o v e r n m e n t o f the B a n k o f the
4t
U n i t e d S t a t e s , not contrary to these ordinances, nor to the act o f
** incorporation, nor to the laws of the United S t a t e s . " C o n s e q u e n t l y ,
the directors h a v e , since that time, possessed and e x e r c i s e d , and do
now possess and e x e r c i s e , the legislative power o f the corporation,
b y the gift and delegation o f the stockholders; and the laws and regulations made by the Board o f Directors, whether for the g o v e r n m e n t
o f their own body, or of the business o f the B a n k , not being contrary
to the constitution, the laws o f the U n i t e d S t a t e s , or the b y - l a w s
m a d e by the stockholders, are good and valid, either by virtue o f
their o w n charter authority as directors, or the authority delegated
to them by the whole corporation.
U p o n what principle is it, then, that a regulation o f the Board
authorizing the President to appoint committees, (a necessary p o w e r
in e v e r y legislative body,) or that authorizing a c o m m i t t e e to t a k e
order upon the purchase and sale of e x c h a n g e , or to perform a n y
other act of banking which the charter d o e s not require to be d o n e
b y s o m e b o d y e l s e , is denounced as a violation o f the charter, and o f
the plain words of the charter? Sir, the p o w e r exercised b y the
C o m m i t t e e o f E x c h a n g e is k n o w n by all w h o k n o w a n y thing of
46
practical banking, as it is now conducted in our cities, to be not only
usual, but almost indispensable; and, to the due management o f the
parent Bank, entirely s o . T o require a quorum o f s e v e n to be pre*
sent at e v e r y such operation, occurring as they d o e v e r y d a y , would
be to say that the Hank o f the U n i t e d S t a t e s should not g i v e the
facilities*to e x c h a n g e s which the interests o f trade require.
The
question of e x p e d i e n c y is, h o w e v e r , for the Board, w h e n its legal
quorum is present, to decide; and they have decided it, and the
stockholders h a v e n e v e r questioned the decision- A s to the right,
though from c o n v e n i e n c e , as well as from the regular recurrence and
magnitude o f the operations, the discounts o f promissory notes are
directed by the Board o f Directors in person, there is no legal ditlere n c e b e t w e e n discounts and exchanges, or a n y other branch o f
banking business, which m a k e s them necessarily subject to different
rules. T h e Board m a y regulate the whole as it d e e m s best for the
Bank.
But, sir, this alleged violation o f the charter is c o n n e c t e d , in the
mind o f the S e c r e t a r y , with a design to 4* conceal certain important
operations of the corporation from the officers o f the G o v e r n m e n t . "
T h e particular operations concealed are not suggested, but the c o n cealment is alleged as an inference from the m o d e o f appointing and
instructing the c o m m i t t e e s in violation of the charter.
T h e r e are s o m e points o f fact adverted to in the Secretary's tetter, and in the argument o f the honorable member from T e n n e s s e e ^
which it is my intention to leave to thot>e who think that they are
still worthy of additional notice. I am not o f that opinion.
These
matters regard the particular items o f e x p e n s e for printing and pub*
lication b y the Bank, and the old affair o f the ii per c e n t s , both as to
the suspended payment from July to October, and the contract bv the
Bank with certain holders of that stock. If, after the volumes printed
by the order o f this H o u s e nt the last session of C o n g r e s s , upon these and
other kindred questions, something more is required to be said, I a m
sure it may be said more profitably by others than by myself. S o , also,
sir, as to the discovery which the honorable m e m b e r from T e n n e s s e e
thinks he 1ms m a d e , o f a contradiction b e t w e e n the amount o f printing e x p e n s e s o f the Bank in 1 8 » 1 , returned by the Bank to the S e n ate under a resolution o f that b o d y , and the amount for the s a m e
y e a r slated in the pamphlet which he is pleased to term the manifesto o f the B a n k — t h e former beimr, as I understand, the s u m o f
£ 9 , 7 7 5 , and the latter the sum of $ 2 1 , 7 0 S 3 3 . T h a t discovery m a y
not prove to be as important as it is supposed to b e , if g e n t l e m e n
will advert to the* (act that the call o f the S e n a t e e m b r a c e s o n l y the
e x c u s e s paid by the Bank for printing
and to etlitvrs;
and the e x p e n s e s in the pamphlet are the whole amount paid b y the B a n k for
publications o f e v e r y kind, by w h o m e v e r printed, and not m e r e l y
the portion paid b y the B a n k * t o printers e m p l o y e d by itself, and to
editors of newspapers.
T h e s e , sir, are minor points; but the question o f c o n c e a l m e n t inv o l v e s great considerations. It would a p p e a r that the charge i m p l i e s
a general c o n c e a l m e n t , from the omission to appoint a n y o n e o f the
47
G o v e r n m e n t d i r e c t o r s u p o n the C o m m i t t e e of E x c h a n g e ; a n d p a r ticular c o n c e a l m e n t , from giving to t h e C o m m i t t e e on t h e Offices a
p o w e r to modify t h e resolutions of t h e Board for r e d u c i n g t h e business of the institution as t h e y should d e e m e x p e d i e n t , and refusing
t o order them to m a k e a r e p o r t to the B o a r d ; a n d , also, from refusing
to the G o v e r n m e n t d i r e c t o r s a c o p y of the resolution indicating t h e
course of policy p r o p e r for the B a n k to p u r s u e u n d e r p r e s e n t c i r c u m s t a n c e s , and which t h e G o v e r n m e n t d i r e c t o r s thought should b e
transmitted to the S e c r e t a r y of the T r e a s u r y . I n r e g a r d to the C o m m i t t e e on the Offices, [ find it difficult to c o m p r e h e n d that b r a n c h of
t h e alleged c o n c e a l m e n t , as by their letter of t h e 22<\ A p r i l , 1 8 3 3 ,
t o the P r e s i d e n t , it a p p e a r s t h a t onv, of t h e ( l o v o r n i c n t d i r e c t o r s w a s
at that time a m e m b e r of that c o m m i t t e e .
Possibly, however, there
m a y have b e e n a c h a n g e , and I shall so consider it.
Sir, these questions a r e oi* great i m p o r t a n c e to all b a n k s , and to
t h e Bank of t h e U n i t e d S t a t e s in p a r t i c u l a r .
T h e right of the G o v e r n m e n t d i r e c t o r s to the station t h e y aspire to, or to d e m arid t h a t
the Board should m a k e the orders which the B o a r d hnve refused to
m a k e , has not t h e least foundationT h e i r right to be m e m b e r s of
a n y committee has no m o r e legal s u p p o r t , t h a n the right of a m e m b e r
of this H o u s e to be upon a c o m m i t t e e a p p o i n t e d by this H o u s e .
It
d e p e n d s , in this H o u s e , upon the good p l e a s u r e of the 1 l o u s e ; or, w h a t
is constructively the s a m e t h i n ? , upon the pleasure of the* S p e a k e r ,
chosen by the Mouse. I n the Board of D i r e c t o r s it d e p e n d s on the
pleasure of the B o a r d , e i t h e r directly or i n d i r e c t l y , as t h e y m a k e the
a p p o i n t m e n t t h e m s e l v e s , or give the p o w e r of appointment, to the
P r e s i d e n t of the Board. T h e right to r e q u i r e that a c o m m i t t e e shall
m a k e a r e p o r t to the B o a r d , is t h e riirht of the B o a r d , and not o f a n y
m e m b e r of it. T h e right to t a k e a copy of the m i n u t e s , for any p u r p o s e , d e p e n d s on the will of the B o a r d by w h o m they a r e m a d e , or
o r d e r e d to be m a d e , as t h e c h a r t e r does not contain a n y d i r e c t i o n
u p o n the subject* It would be the s a m e in this H o u s e , if the constitution did not r e q u i r e a journal to be k e p t by e a c h H o u s e , and to be
published from time to t i m e ; though e v e n this is subject to an e x c e p tion, d e p e n d i n g on the will of the H o u s e .
T h e questions of right being thus, let us e x a m i n e , sir, the q u e s tions of e x p e d i e n c y and p r o p r i e t y .
H e r e t o f o r e , in t h e history of the B a n k , the d i r e c t o r s appoint*-*!
by t h e P r e s i d e n t of t h e U n i t e d S t a r e s , h a v e mingled in all the t r a n s a c t i o n s of the B a n k , m u t u a l l y giving and e n j o y i n g u n r e s e r v e d confid e n c e , and being in no r e s p e c t w h a t e v e r distinguished from t h e o t h e r
d i r e c t o r s . M r , Kiddle himself was a director up pointed by the P r e s i d e n t , for ninny y e a r s , a n d p a r t i c u l a r l y in the i m p o r t a n t y e a r s of
1 8 2 9 , 1 8 3 0 , 1 8 3 1 , ' a n d 1 8 3 2 , as the r e p o r t s of the last session s h o w ;
and o t h e r G o v e r n m e n t d i r e c t o r s h a v e , from time to l i m e , a c t e d u p o n
all t h e i m p o r t a n t c o m m i t t e e s , including die C o m m i t t e e of K x c h a n g e ,
so as to give to t h e B a n k t h e benefit of their p e c u l i a r qualifications,
for it must a l w a y s h a v e b e e n a question of qualification, a n d , if a d i r e c t o r w a s not qualified for u p a r t i c u l a r post, it is not prolmbiu, w h a t e v e r was t h e s o u r c e of his a p p o i n t m e n t , that he would b e pbieed in
48
it- But, sir, in the time of the present Government directors, a
change has come upon us and upon the Bank, of a very important
kind, and it is not surprising that it has affected those directors also.
It was vehemently suspected, sir, at the time of their ap^wnu* lent*
that their notions of duty and right were peculiar; that they -icemed
themselves bound or entitled to use their posts for the purpose of
making representations to the President of the United States, tending
to excite odium against their co-directors, by impeaching their motives and acts, and thus to impair the credit of the Bank; that they
deemed themselves at liberty, in the performance of this duty, or in
the exercise of this right, to pursue objects which they did not care
to avow, and which they were not permitted to avow; and, finally, sir*
that, in some way, by some unexplained theory of their appointment*
they had come to the opinion that they possessed political powers
in
the institution, which they were authorized to use for political
purposes- All this, sir, was, as 1 have said, most vehemently suspected;
and, if the suspicions were just, the propriety of placing them in posts
of trust and conlidence in the Bank was not so clear, particularly as, if
they were so placed, it might have been difficult to persuade other gentlemen to sit beside them in the occupation of those posts. I say*
sir, it might have been extremely difficult to persuade gentlemen o f
character, having some feelings and reputation of their own, to sit
in a post of trust and confidence by the side of directors holding
such notions of duty and right, and carrying them out, without a v o w ing their objects, into measures of extreme personal annoyance as
well as of discredit to the BunkSir, what was at that time, perhaps, no more than vehement suspicion, is now, and, for some time past, has been, matter of unquestionable certainty; and the certainty is derived from the best possible
authority—the confession of the very party.
Sir, I beg to call the attention of the House to a part of a letter
addressed by three of the Government directors to the President o f
the United States on the 22d of April, 1 8 3 3 , which is annexed to
the letter of the Secretary* It is the first that has been exhibited t o
this House, but not the first in the correspondence of which it forms
a part, and which has not been communicated. W e know, e v e n now
but in part. T h e three directors say:
41
Without considering any portion of our remarks as falling within
44
the limits of those private accounts, which, as you state, the charter
"lias so carefully guarded, since the whole relate to the action of the
44
Hoard upon matters fully openf atbd discussed, before them,, ami ex*
44
tend in no instance to the private debtor and creditor accounts of
44
individuals^ y e t we may be excused for expressing much gratifica*
* 4 tion at your assurance that the information requested is for your
44
own satisfaction, and that you do not wish it extended beyond our44
personal knowledge.
W e may be permitted also to add, that the
14
wishes and opinions which w e took the liberty of expressing in our
44
former letter have been since more strongly confirmed, and that wet
44
should not only feet more satisfaction
ourselves, but be enabled to
** convey to you more full and correct information^ were we to proceed
49
WHOSE OBJECT WAS AVOWED, and if we were
*4 in an investigation,
44
strengthened by that official sanction which we suggested."
Then, sir, they were not altogether comfortable in their new
position; and I do not wonder at it. T h e n their object was not
avowed^ and they were not permitted to avow it, but were compelled,
by their own sense of distress, to ask for an official sanction, under
which they might avow it: then, further, they were practising concealment themselves, and trying to prosecute an investigation, without avowing its object, when that object is now known to have been
to inculpate the Board, and particularly the gentleman at the head of
it, and, hy means of the odium thus excited, to justify to public prejudice an act of deadly hatred to the Bank of which they were directors—the removal of the public deposites: and then, sir, I say, in
conclusion, that there is not an honorable man hi this House, or in
this country, who will not respond to the sentiment, that they were
treated at least as well as they deserved to he, by not being assisted
in the performance of these remarkable labors. With this confession
of concealment by the Government directors, to which they were
coerced by the Executive, the Secretary of the Treasury arraigns
the Board for concealing its operations from them. l i e charges the
Board with concealment, in violation of their charter, and in contempt of the Government, when the hoad and front of their offence
is this only—that they would not consent to he the dupes of con*
cealment that was practised by others.
But, sir, this is not a l l T h e memorial of the Government directors to this House, for the doctrines of which we are, [ presume,
indebted to the professional gen*Ieman whose name is at the head,
cannot be too much adverted to, in connexion with both the charge
of concealment hy the Board, and another charge, hereafter to be
noticed,.of a graver description. It is a document that may be considered as a sort of small martifrotogy—a
history of the sufferings
incident to disappointed efforts and mortified pretensions; and it contains, as is natural, a confession of the faith hy which the sufferers
have been sustained at the stake where they have placed themselves.
I beg permission to exhibit it to the H o u s e . — " It lias pleased the
" majority of the Board of Directors/' says the memorial, 4t in tlie
44
document to which we refer, in order, we suppose, in some degree
(t
to extenuate their conduct, in systematically nullifying the repre4
• sentatives of the Government and t\\e P e o p l e , " [doubtless meaning themselves,] 4t to deny that the public directors are seated at
44
the Board in anv other relation than themselves; to deny the ex4
* istence of any difference in the official character and duty of them44
selves and us. This extraordinary denial, in the face of all experi** enceof the familiar history of tin* country, and of palpable reasoning,
44
must rather he ascribed to the presumption which moneyed power
** is apt to inspire, than to the ignorance or wilful misrepresentation
" of those who make it. Nothing can be plainer than that the PUII41
L.IC DIREOTOKS MJERE J > E n s i i 0 AS IWSTRUMFAXS "
[ I b e g t h e IIoUSC
to advert to the felicity of the language*-—"u:rre. d* vised as instruments."] *' Nothing can be plainer than that the public directors
50
** w e r e devised as instruments for tbe attainment o f public objects;
** that their being insisted upon in the charter itself w a s in o b e d i e n c e
44
to the will o f those w h o e l e c t e d the legislative body b y w h i c h it w a s
** passed; and that their optpointment
was given to the
President,
44
with the a d v i c e and c o n s e n t of the S e n a t e o f tbe U n i t e d S t a t e s ,
44
(not to the m e r e fiscal r e p r e s e n t a t i v e , ) in order to clothe them w i t h
*4 all the c h a r a c t e r o f official representation, and to exact from
them
44
a d i s c h a r g e of all the d u t i e s , public, political,
and patriotic, inci** dent to a trust so conferred.
I f w e are mistaken in this, w e a c *4 k n o w l e d g e that our solicitude about the rights and m o r a l s , the
44
practical purity and freedom o f our c o u n t r y m e n , has m i s l e d us.
4
* B u t w e k n o w that w e are not,"
Devised
as instruments,
and g i v e n to the P r e s i d e n t , to exact from
t h e m a discharge of all the duties, public, political,
and patriotic, i n cident to a trust so conferred! T h e s e n s e would not have b e e n more
c o m p l e t e , sir, though the alliteration would h a v e b e e n more perfect, i f
they had described their functions as e x t e n d i n g to all duties, p u b l i c ,
political, patriotic, and parti/,
incident to a trust so conferred.
N o w , sir, without at present s a y i n g w h e t h e r this theory w a s true,
the other directors had a right to a counteracting theory for t h e m s e l v e s ; and if it is true that the G o v e r n m e n t directors w e r e d e v i s e d
as instruments, and that t h e y are, b y their creation, political
directors, the other d i r e c t o r s , w h o h a v e not b e e n so d e v i s e d , are e n t i t l e d
to consider t h e m s e l v e s as anti-political directors, and not bound t o
assist the political operations of the other branch, but rather, b y X\M*
m o m e n t u m o f their greater n u m b e r s , to k e e p them from m o v i n g t h e
B a n k out o f place.
But, sir, the heads of the memorialists h a v e
b e e n made d i z z y by their e l e v a t i o n . T h e i r theory has no foundation
in reason, or in the charter,
I d e n y that they w e r e devised as i n struments, w h a t e v e r they m a y have m a d e of t h e m s e l v e s .
T h e r e is
not a s h a d o w o f difference b e t w e e n the rights and duties, the p o w e r s
or the obligations, o f any of the directors: they are all directors,
neither more nor less, and o w i n g the s a m e duties to all the interests
confided to them. T h e directors appointed by the P r e s i d e n t o w e a
duty to the nation, and so do the others, a n d , in m y poor j u d g m e n t ,
t h e y have performed it. T h e directors e l e c t e d by the s t o c k h o l d e r s
o w e a duty to the B a n k , and so do the directors "appointed by the
President; but they h a v e neither performed nor a c k n o w l e d g e d it. T h e y
are not placed there to m a k e inquiries for the P r e s i d e n t .
The President has no authority to direct inquiries to be made by t h e m .
This
is a question o f charter p o w e r , o f p o w e r o v e r a corporation, all ot
w h o s e privileges are rights o f property. T h e charter g i v e s to the
P r e s i d e n t no such right. It e x p r e s s l y g i v e s to the S e c r e t a r y o f t h e
T r e a s u r y a right o f limited inquiry, b y investigating such g e n e r a l
accounts, in the b o o k s o f the B a n k , as relate to the statements w h i c h
t h e B a n k is bound to furnish to the T r e a s u r y D e p a r t m e n t , but n o
further*
C o n g r e s s h a v e the p o w e r to inspect the b o o k s of the B a n k ,
and the p r o c e e d i n g s o f the corporation gencraUy. T h e s e p o w e r s
h a v e b e e n expressly given* and t h e y h a v e b e e n so g i v e n b e c a u s e
t h e y would not h a v e b e e n d e r i v e d b y i m p l i c a t i o n from the charter.
51
But here is a power to be implied greater than all, and worse than
all—a power to be exercised secretly, and without avowal, ex parte,
without notice, without opportunity of reply or explanation being
given to those whom it aftects, and by persons who are holding, to all
appearance, the relation* of amity with their co-directors, sitting on
the same seats, and professing the same general objects. Sir, the
Board did right not to aid them; it would have done right to resist
them; and I inquire of the members of this House, and ask them to
follow out their honorable feelings into the reply—would they consent to sit in committee by the side of men who professed principles
like these, and submitted themselves to the direction of another as
to the manner hi which they should carry ihem into execution'? T h i s
question concerns all banks, and this Bank most intimately. A hue
and cry is raised against the directors of this Bank, because the
Bank will not tell the Government directors, that they may tell the
Secretaryi precisely how they mean to wind u p , if they do mean it;
and here is a new theory of banking, to place by the side of the
new theory of political power—that all which the Bank intends to
do for its own defence, is to be told to an enemy, that, if lie thinks
fit, he may defeat the measure; that it is not sufficient for him to continue to know the precise condition of the Bank, in point of fact, as
it actually is, and as he must perceive it to be b}* the weekly statements,
but that he must also know what it is going to be by the operation of
measures of defence, that if it is in his power, and he also thinks fit,
he may frustrate the purpose* T h e private directors of this Bank have
upon them the responsibility of taking care of all the stockholders—the
nation, for its seven millions, included. Tf others forget this duty, they
will not. This House, I hope, will not; nor will they join in censuring
these faithful men for refusing, under the challenge of political power,
to give up the direction of the Bank, by allowing to any department
an inquisition into their concerns, which the charter does not warrant.
Mr, Speaker, it is in connexion with this asserted right of inquiry
into the affairs of the Bank, that the contracts, made by the Secretary with the new depositc Banks, become an object of the deepest
interest. T h e 15th fundamental law of the Bank charter enables the
Secretary to require of the Bank a weekly statement of the capital
stock of the corporation, debts due to the same, moneys deposited
therein, notes in circulation, and the specie in hand; and gives him a
right to inspect the general accounts relating to it in the books of the
B a n k , but not the right of inspecting the account of any private individuah
This ouizht to have been sufficient for the Secretary, as,
in the judgment of Congress, it was sufficient for the safe-keeping of
the public moneys. It was enough for safety, which Congress wanted,
but not enough for interference and control of the Bank, which
Congress did not want. T h e contracts which the Secretary has
made with the deposite banks hold a very different language, as may
be seen by that with the Girard Bank. T h e Bank is bound, not
only to make weekly returns of its entire condition, and to submit its
books and transactions to a critical examination by the Secretary, or
an agent duly authorized by him, but it is expressly provided that
52
this e x a m i n a t i o n m a y e x t e n d to all the boohs and accottnts, t o the
c a s h on h a n d , a n d to all the acts and concents of the B a n k , e x c e p t
the current accounts
o f individuals.
S i r , I a m h a p p y to learn that
the s t o c k h o l d e r s o f the B a n k o f V i r g i n i a h a v e d i s a v o w e d the a c t of
their d i r e c t o r s , in g i v i n g this p o w e r to the S e c r e t a r y .
It is a fearful
p o w e r , a n d , w i t h t h e T r e a s u r y interpretation of current
accounts^
( w h i c h is not the l a n g u a g e o f t h e charter, but accounts g e n e r a l l y of
a n y p r i v a t e individual,) w e m a y s e e the e x t e n t of control, w h i c h ,
with the aid o f tho d e p o s i t c s , this c l a u s e of the contract will g i v e .
I t is an authority for universal s u p e r v i s i o n o f all the o p e r a t i o n s o f
the B a n k , including its d i s c o u n t s , and for granting and w i t h h o l d i n g
a c c o m m o d a t i o n s at the pleasure o f t h e S e c r e t a r y .
1 h u m b l y submit
to all w h o feel a n y kindred s y m p a t h i e s with honorable m e n , w h e t h e r ,
in the a b s e n c e of the m a n d a t e of a j u d i c i a l d e c i s i o n , in a c a s e in
w h i c h s u c h a d e c i s i o n lias b e e n a v o i d e d b y the p o w e r that h a s a
right to i n v o k e it, w h e t h e r this is a fit o c c a s i o n to justify t h e r e m o v a l
o f the d e p o s i t e e for violation of charter, b e c a u s e the directors h a v e not
a d o p t e d or assisted s u c h p r i n c i p l e s , interpretations, and aims as these?
T h e affair o f the F r e n c h bill I shall briefly n o t i c e , as I pass to the
r e m a i n i n g topic o f tho S e c r e t a r y ' s a n s w e r . I will t a k e the h i s t o r y
o f that bill, as it is g i v e n b y the honorable m e m b e r from T e n n e s s e e
that it w a s a bill bought b y the B a n k , refused p a y m e n t by the F r e n c h
G o v e r n m e n t , a n d , u p o n protest, the a m o u n t w a s paid b y the a g e n t ,
for the h o n o r of the B a n k , to the foreign holder; that the m o n e y w a s
not u s e d b y the T r e a s u r y h e r e ; and that the B a n k suffered n o t h i n g
but a few e x p e n s e s , w h i c h the S e c r e t a r y is willing to refund,
I will
a g r e e that there is n o t h i n g but an old statute o f M a r y l a n d to sjive
d a m a g e s on the protest, and that it d o e s not include the s o v e r e i g n
o f the c o u n t r y ,
1 c a n n o t argue- the c a s e , b e c a u s e the h o n o r a b l e
m e m b e r a s s u m e s nil the law and all the facts, and the S e c r e t a r y ' s
letter g i v e s us n o n e .
I must* therefore, ajjrec to the c a s e as h e p r e sents it,
B u t the thing w h i c h p a s s e s m y c o m p r e h e n s i o n i s , that a
m e r e claim by the B a n k — a claim without suit or other a c t — a c l a i m
w h i c h it is the p r i v i l e g e of the l o w e s t and poorest to m a k e u p o n t h e
highest and richest in the l a n d , without incurring e i t h e r forfeiture o r
damage
that this should be g r a v e l y put forth as a brand of f a i t h l e s s n e s s upon the H a n k , and a forfeiture o f her right to the public d e p o sitee.
S i r , t h e r e must be a strange p e r v e r s i o n o f mind in m v s e l f , o r
in the h o n o r a b l e S e c r e t a r y , in regard to this conclusion.
It w o u l d
h a v e b e e n t h e o c c a s i o n o f infinite surprise to m e , if the facidty o f
b e i n g surprised had not b e e n r e c e n t l y so m u c h impaired by u s e , t h a t
I am no l o n g e r c o n s c i o u s o f its existence*
T h e last r e a s o n o f the S e c r e t a r y for r e m o v i n g the d e p o s i t e s i s ,
that the B a n k had e m p l o y e d her m e a n s w i t h the v i e w o f o b t a i n i n g
political p o w e r .
I heyr p e r m i s s i o n of the H o u s e to s a y a w o r d c o n c e r n i n g the h u m b l e individual w h o has the honor o f a d d r e s s i n g in H a d I b e e n a
d i r e c t o r o f the B a n k o f the U n i t e d S t a t e s , during t h e y e a r s in w h i c h
it has b e e n its misfortune n o t to h a v e r e c e i v e d the a p p r o b a t i o n o f t h e
S e c r e t a r y , I should h a v e b e e n a s s o c i a t e d with m e n w h o a r e an o r n a -
53
ment to the city in which they live, and an honor to their country—
men, who, from earliest youth to their present mature age, have
been beloved, respected, and honored by all around them, and who
are as much the standard of all the virtues, private, social, and p a triotic, as the coins of your mint are the standard of your currency,
and without any of the base alloy which you mingle in your coins
to make them fit for the use and abuse of the world. If I had been
called upon to act with such men as these, in regard to measures of
any kind, and had differed from them in iny judgment, I should have
deemed it almost an act of treason against the authority of superior
intelligence, or of arrogance, exposing myself to reprehension or
contempt. I should have followed them fearlessly wherever they
led, and with unshaken confidence that they could not lead me where
either wisdom or virtue would be exposed to reproach. But, sir, I
had not this honor. I was not a director of the Bank in 1829, nor in
1830, nor in 1 8 3 1 ; and, though chosen a director in 1832, I left
Philadelphia in J a n u a r y , to pass my winter here, and met the Board
but once after my return, to show respect to the Committee of I n quiry appointed by this House, Of the measures now to be adverted
to 1 was not informed, except as the public and this House have
been informed, I can speak of them, therefore, without the influence arising from either participation or privity. A s to my professional relations to the Bank, I am proud to belong to a profession
which has many distinguished members in both Houses of this Congress—a profession which the confidence and affection of this people
have raised, in more than one instance, to the highest office in their
gift.
I will not degrade this honorable profession!
I will not
degrade my own rank in it, however humble, by condescending to
inquire what extent of compensation would induce an honorable
man to sell his conscience, and his principles, as slaves, to his client!
Sir, the great accusation against the B a n k is, that she has endeavored to obtain political power, and interfered with the election of the
President of the United States. G r a n t the design of the Bank, sir;
and what then? It has not succeeded. T h e letter of the Secretary
is an argument to show that it has not succeeded, and that the question of re-chartcr is settled against the Bank by the voice of the P e o ple at the last election. T h e election of the President—the appointment of the Secretary—the elections for this House-—were all completed before the deposites were removed; and these are held up to
show that the design imputed to the Bank has failed and fallen to the
ground. T h e n I ask, sir, what is the character of that act which has
removed the deposites? I s it preventive, or is it vindictive? I t is
vindictive, sir. I t is punishment directed against the Bank for an
imputed design that has wholly failed in its execution, and the victim
of the iniliction is not the Bank, but the country. If it is a matter
of grave belief that the purpose of the Bank was that which is imputed, and that the elections have given out the answer of the People
to it, what more triumphant refutation can be adduced of the reasons
that find either a ground of apprehension, or a motive of punishment, in acts which have thus failed of effect? If the premises b e -
54
long to the case, the true conclusion is, that the people are in no
danger from attcm[>ts to gain political power by the devices of the
Bank, and that she may go on to the conclusion of her* charter, performing her constitutional duties to the country, as she has always
done, with fidelity and success; leaving the question of renewing the
charter to settle the extent of her punishment.
But, sir, I deny the charge. I say the design was not entertained^
and that not a particle of evidence has been produced to infer the
contrary. T h e Board haveA4 printed and published, and have assisted
in printing and publishing, for the purpose of communicating to the
" people information in regard to the nature and operations of the
" Bank, and to remove unfounded prejudices, or repel1 injurious caThis is the
" bunnies on the institution intrusted to their c a r e /
declared purpose of all they have done, and they stand upon the
sacred principle of self-defence in asserting their right to do it- T h a t
there was nothing in the veto message to justify the circulation of
the review which the gentleman from Tennessee has noticed, is more
than I admit; and when the gentleman shall assert, upon his own
authority, that the Board have given currency to a scurrilous pamphlet against any one, he will find me ready either to deny the fact,
or to admit its impropriety. T h e constitution secures to every person, natural and political, the right of printing and publishing, being
responsible for the abuse of it. It prohibits Congress from passing
any law abridging the freedom of the press. If the charter had inserted a provision to restrain the; Board of Directors from printing or
publishing, it would have been null and void. An interpretation of
the charter to restrain it is equally so* T h e y have the universal
right, subject to the constitutional corrective through the jxrdicial tri*
bunals of the country; but to condemn, and then to try them—to
punish, and then to hear—belongs not to the tribunals of this earth
nor to the constitution of this country.
Sir, the change of the deposites is an extraordinary mode of p r e venting their application to the purposes of political power. Before
their removal, they were in a Bank not possessing political power,
nor capable* of using it. T h e y are now wielded by those who possess
it, and who are more or less than men if they do not wish to keep it.
T h e n they were in one Bank, under one direction; now they will
be in fifty. T h e n they were in a Bank which political power could
not lay open to its inquiries and control; now they are in Banks that
have qiveu a stipulation for submitting all their acts and concerns to
review. T h e n , if these deposites sustained any action at all, it was
in the safest form for the People—action against power in office;
now its action is in support of that power, and tends to the augmentation of what is already great enough.
I say, in conclusion upon this point, if these publications are
deemed by this House to have been unlawful, return the deposites till
the Bank has been heard. Go to the scire facias—give
to the Bank
that trial by jury which is secured by its charter, and is the birthright
of alb Ask the unspotted a n d unsuspected tribunals of the country
for their instruction. Arraign the Bank upon the ground either of
55
sedition, or grasping at political power. T h e r e was ample time for
it, and still is; and there is a great precedent for it, which I commend
to the consideration of this House.
Sir, in the worst days of one of the worst princes of England, ( I
mean Charles the 2d,) the love of absolute rule induced him to
make an attempt upon the liberties of the city of London, whose
charter lie desired to overthrow. H e complained that the Common
Council had taxed him with a delay of justice, and had possessed the
people with an ill opinion of him; and, by means of his ministers of
the law, and by infamously packing the bench, having promoted one
judge, who was not satisfied on the point, and turned out another
who was not clear, he succeeded in obtaining a judgment, under which
the liberties of that ancient city were seized by the crown. B u t ,
when the revolution expelled his successor, and the principles of
the Brirish constitution came in with the House of Orange, an
early statute of William and Mary reversed the judgment as illegal
and arbitrary; and from that time it has been the opprobium of the
bench, and the scorn of the profession.
T h e account of it which is given by Burnet, is t h u s : — " T h e
" court, finding that the city of London could not be wrought on to
41
surrender their charter, resolved to have it condemned by a j u d g 44
mentin the King's Bench. Jones had died in May; so now Pollexfen
44
and T r e b y were" chiefly relied on by the city in this matter. Sawyer
44
was the Attorney General, a dull, hot man, and forward to serve all
*4 the designs of the court. He undertook, by the advice of Sanders,
44
a learned, but verv immoral man, to overthrow the charter. T h e
" two points upon which they rested the cause were, that the Com4t
moil Council had petitioned the King upon a prorogation of P a r 44
liament, that it might meet on the day to which it was prorogued,
44
and had taxed the prorogation as that which had occasioned a delay
44
of justice: this was construed to be the raising of sedition, and
44
the possessing the people with an ill opinion of the K i n g . " —
44
W h e n the matter was brought near judgment, Sanders, who had
4
* laid the whole thing, was made Chief Justice; Pemberton, who was
44
not satisfied on the point, being removed to the Common P l e a s ,
44
on North's advancement. Dolbin, a judge of the King's Bench, was
44
found not to be clear; so he was turned out, and Wilkins came in
** his room* W h e n sentence was to be given, Sanders was struck
44
with an apoplexy, upon which great reflections were made; but he
4i
sent his judgment in writing, and died a few days after." As the
only precedent which the books present to us of forfeiture of charter for sedition, or an interference with political power, it is not without instruction.
Sir, these reasons of the Secretary being one and all insufficient
to justify the removal of the deposited, the question of remedy is the
only one that remains. T h e state of the country requires the return;
but the question of return has nothing to do with the renewal of the
charter. If renewal were the object, 1 should say, do not put them
back, leave them as they are; make no provision for the future, and
see, at the end of two years, to what relief the people will fly, But t
56
sir, let us save the country from this unnecessary suffering.
Retura
t h e m , and the mists will clear off from the horizon, and the face o f
nature smile as it did before. R e t u r n them, and make some p r o v i H\*>V for the d a y when the capital of this Hank, is to be withdrawn from
the *u *".;-", if it is to be withdrawn. P r o v i d e some control, some
r^jfulatii>>i of \ our currency. T h e time is still sufficient for it, a n d
the country requires it. I f indeed, this B a n k is not to be continued*
nor another to be supj>.I#'d, nor a control devised to prevent the S t a t e
Banks from shooting out of their orbit*, and bringing on confusion
and ruin, then, i confess thai I scr uo benefit in putting off the evM
for iwo y o ^ s longer. . T h e sv^rni imist conn;, in which every one
must sei/ Mich j ' l - u k o f safety u£ ho may out of tin* common w r e c k ;
and it is not the part, either u i \ t r u e coum^t* or of provident caution,
to wish it deferred for a little thmi longer.
Sir, I have done. I have now closed my remarks upon the question of the public deposites, second in importance to none that has
occurred in the course1 of the present administration, whotner wo r e gard its relations to the public faith, to the currency, or to the e q u i poise of the diilerent departments of our (Government. It is with
unfeigned satisfaction that I have raised my feeble voice in behalf of
the amendment offered by the gentleman from South Carolina, whose
enlightened labors in this great cause, through a course of y e a r s , have
inseparably connected his name with those principles upon which t h e
security, the value, and the enjoyment of property depend; and it
will be sufficient reward for me if 1 shall be thought not to have impaired the effect of his efforts, nor to have retarded the progress
of those principles to their ultimate establishment. For myself, I
claim the advantage of saying, that, as T have not consciouslv uttered
a sentiment in the spirit of mere party politics, so I trust "that m y
answers to the Secretary will not be encountered in that spirit. I f
the great and permanent interests of the country should be above the
influence of party, so should be the discussions which involve them*
It ought not to be, it cannot bfk, that such -questions shall be. decided
in this House as party questions. T h e question of the Bank is one
of public faith; that of the currency is a question of national prosperity; that of the constitutional control of the T r e a s u r y is a question of national existence*
It is impossible that such momentous
interests shall be tried and determined by those rules and standards
which, in things indifferent in themselves, parties usually resort to*
T h e y concern our country at home and abroad, now, and to all future
time; they concern the cause of freedom every where; and, if t h e y
shall be settled under the influence of any considerations but justice
and patriotism—-^sacred justice and enlightened patriotism—the d e jected friends of freedom dispersed throughout the earth, the patriots
of this land, and the patriots of all lands, must finally surrender their
extinguished hopes to the bitter conviction that the S P I R I T O F P A R T Y
is a more deadly foe to free institutions than the H P I R I T O F DKS-»
POTISM.
@FedFRASER