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MR.
SOUTHARD,
ox
T H E REMOVAL O F T H E DEPOSITES;
DELIVERED
In the Senate of the United. Stages, January, 1834.
SECOND
Ki»rV2o*.\
WASHINGTON:
PRINTED BY GALES AND SEATON.
1834,
SPEECH.
T h e Senate, on the 8th of January, 1834, having under consideration the
report of the Secretary of the Treasury, laying before Congress his reasons
for removing the Public Deposites from the Bank of the United States, and
the following resolutions, submitted by Mr, Clay:
1. Htsolved, That, by dismissing the late Secretary of the Treasury because he
would not, contrary to his sense o f his own duty, remove the money of the United
States in deposite with the Bank of the United States and its branches, in conformity
with the President's opinion; and by appointing- his successor to effect such removal,
which has been done, the President has assumed the exercise of a power over the
Treasury of the United States not granted to him by the constitution and laws, and
dangerous to the liberties of the people*
2. Hesolved, That the reasons assigned by the Secretary of the Treasury for the removal of the money of the United States, deposited in the Bank of the United States
and its branches, communicated to Congress on the 3d day of December, 1833, arc
unsatisfactory and insufficient.
M r . S O U T H A R D addressed the Senate as follows:
Mr. PRESIDENT: T h e amendment offered by the Senator from Missouri
having been removed out of the way by the vote of the Senate, the debate
returns upon the reasons of the Secretary of the Treasury and the resolutions
offered by the Senator from Kentucky—and these present subjects of the first
magnitude for the grave consideration of Congress,
For sixteen years, said Mr, S., the money belonging to the Union has been
kept in a position selected by Congress, under the authority of law—-in a depository suited to its safety, to the convenience of the Government, and the
interests of the people. Within three or four months past this money has
been removed and distributed among twenty or thirty State banks, in positions
not selected by Congress, nor under its control, without consulting the representatives of the people, and in violation of their recently expressed opinion.
The place of its former deposite was created for the express purpose, by the
legislative power of the country; the places of its present deposite were not
created by Congress, nor are they under its control, but chosen according to
the discretion ot an executive oiiicer. T h e order for the change was given by
the Secretary of the Treasury, under and by virtue of a construction of hi&
powers and^ authority as Secretary; and it operates not only on the money
now in the Treasury, but on all which may hereafter be acquired.
W e have not t therefore, before us mere questions regarding the temporary
possession of office. W e are not to deliberate and decide upon the policy of
sustaining this or that man, nor whether it is wise to recharter a bank, nor
how we shall settle a dispute between an individual President of the United
States and his advisers on the one part, and a moneyed corporation on the
other- The questions rise higher—they affect the management and control of
the whole treasure of the Union; and the construction which is, now and
hereafter, to be put upon delegatetLfowerB,under the fundamental and written
4
laws of the land. Our decision, in its consequences, will be felt when p r e s e n t
arty conflicts shall be over—when aspirants tor place and placemen s h a l l
ave passed by and been forgotten; and ihej- demand, at our hands, a i l t h e
calmness of deliberation which the exciting circumstances in which w e find
ourselves will admit.
T h e Secretary, in compliance with the command of law, has submitted h i s
reasons for the acts which he has performed; and the Senate, as a p a r t o f
Congress, is called upon either to approve or condemn both the acts t h e m selves and the reasons which are oftered for their justification.
W e are,
therefore, required to examine—
1. T h e acts which have been done.
2. T h e principles avowed as the authority for these acts; and
3. T h e reasons assigned as rendering them necessary and proper* at the
time*
1. T h e Secretary of the Treasury has ordered the debtors of the G o v e r n ment, and the inferior officers under the control of his Department, to d e p o s i t e
the public money which may now be or may come hereafter into their hands*
from the various sources of revenue, in more than twenty State banks, c r e a t e d
by several of the States, and holding their corporate powers and authorities
under State legislation. T h i s order must, in its nature, be prospective, a n d
relate not only to the money now in the public Treasury, but to all that w h i c h
shall be acquired by the Government and people of the Union.
T h e terms on which it is to be received and kept, and by which it is t o be
secured, are tound in the agreements entered into between the Secretary a n d
the several banks—copies of two or three of which are appended to his report,
and found in pages 36, 37, and 40. A n d as Congress has not authority o v e r
these banks, and this agreement is the security provided for the public m o n e y ,
its various items require examination. W e niu?t look into the agreement, or
w e cannot understand the nature and effect of the conduct of the Secretary,
nor the situation in which the money now is.
B y the tirst item, e a c h b a n k agrees ** to receive and enter to the credit of
" the Treasurer of the United States all sums of money offered to be deposited
**
on account of the United States* whether oftered in gold or silver c o i n , in
44
notes of any bank which are convertible
into coin* IN ITS IMMEDIATE V I C I 44
N I T Y , or in notes of any bank which it is. for the time beingr, in the habit qf
4t
receiving!"
I t is apparent, therefore, that they have agreed to receive money on account
Of the United States only* and not such money a s , being in the hands of officers or disbursing agents, may be deposited under the provisions of the law of
3d March, 1S09.
If the latter shall be ordered to be placed in them, the
agreement affords no protection to it. T h e extent of the agreement deserves
attention, as it will be found that the Secretary has ordered money to be
deposited there* which is not embraced in this condition. T h e money, also,
which they are bound to receive, is not of the notes of all the selected b a n k s ,
nor of any of them, unless they are convertible into coin in their
immediate
vicinity, or be such as they are in the habit of receiving at the time it is offered—in other words, such as they may choose. N o t e s of selected banks, in
Virginia, or elsewhere, oftered in payment of a debt in N e w York, they are
under no obligation to receive, and must, of necessity, generally refuse for
their own safety.
**
T h e second item provides, that *• if the depositee shall exceed one-hatf o f
44
the capital stock ot the bank actually paid in* collateral security*
satisfactory
44
to the Secretary* shall be given for its safe* keeping and faittful
disburse44
merit," with a proviso that the Secretary may demand collateral security
when the deposites do not exceed one-half of the capital. T h e r e is, then, no
resent security for the public money but the solvency of the banks. I t has
een placed in banks selected by the Secretary, without taking other security:
and whether there is any to be given hereafter depends on the will—of w h o m ?
Of the Congress of the United States? Of the constitutional guardians of the
public purse? ]So$ but on the will of the Secretary of the Treasury a l o n e .
K
E
5
A n d what is the value of that security, which results from the present condition and the charters of these banks? I t can only be commensurate with the
Eowers of their charters and the soundness of their condition. Do Senators
now its value? Has the Secretary deigned to inform us? Did he himself
know it when he acted? A r e Senators informed whether there be not r e strictive clauses which forbid the agreement on their part? Did the Secretary
know it? H e affirms that they are banks of undoubted credit, but without a n
examination of their charters, and, with regard to some of them, without the
possibility of his acquiring the knowledge within the time in which he acted.
A comparison of dates, which are before the Senate, justify this declaration.
T h a t th ese banks were not altogether strong and safe, is apparent from his
declaration that, within a short period, ^ so far from being able to relieve the
" community, they found themselves u n d e r the necessity of providing for
*"* their own safety."—(p. 9.) A n d , within a few days, the stockholders of
one of them have rejected the deposites; and we are told that one ground of
their decision was, that they were incompetent, by their charter, to fulfil the
conditions of the agreement; the others rested on the odious nature of the
terms of the agreement itself*
B y the fourth item, the bank agrees to pay warrants and drafts, and to
transfer the public money without charge, " b u t the Secretary shall give reasonable notice of the time when such transfer shall be r e q u i r e d . " W h a t is
reasonable notice of the time when a transfer will be wanted? W h o is to be
the judge on this point? Suppose a transfer is directed from N e w York to
N e w Orleans in five days, or in fifty; will it be deemed " reasonable?" T h e
bank may say it is not, and there may be a failure to meet the wants of the
Government, without apparent violation of the contract. T h e r e is no escape
from this conclusion, but by regarding the whole discretion on this subject as
within the wilt of the Secretary; and this would place the banks at his m e r c y ,
and under his unrestricted dominion*
T h e fifth item requires of the banks the performance of all " t h e services
" now performed by the Bank of the United States, or which
may be lawfully
" required of it, in the vicinity of said contracting bank.' 5 T h e y are to render
these services in their vicinity * and not elsewhere. T h u s has the Secretary
made an entire surrender of all the advantages which the Congress of the
United States, acting in their high legislative capacity, had declared that the
Government should possess, except such as may be performed in the i m m e diate neighborhood of these favored banks.
In the sixth item, taken in connexion with the third, there is another provision which strikes me as improper and dangerous. T h e y authorize weekly
returns from the banks, of their entire condition, to the Secretary and
Treasurer; the submission of all their books and transactions
to a critical
examination by the Secretary or any agent duly authorized by him, whenever he shall require it; and the appointment by him of one or more agents to
examine and report to him, the banks paying " a n equitable proportion of his
or their expenses and compensation, according to such apportionment
as
" may be made by the Secretary. 5 5
T h e r e is no restriction as to the nature and extent of the examination into
their books and transactions^ except the " current accounts of individuals,
4t
or as far as is admissible without a violation of their c h a r t e r s . "
Transactionsof all kinds, of every character, are examinable by him or bis agents. T h e
restriction as to current accounts of intlividuals is useless, and worse than
useless, if the reasonings of the Secretary, in the 14th page of his report, be
correct. H e there spurns the objection which relates to private accounts, and
argues that these may be the very grounds on which action against the B a n k
of the United States is to be justified. Besides, what is^the restriction resulting from their charters? I t is not known—those charters were not before t h e
S e c r e t a r y , and are not before us.
In the appointment of agents, there is no limit, either as to numbers or c o m >ensation, but the will of the Secretary. One thousand, or five thousand dolars, may be given for the services of each. A n d report, at this moment,
f
assigns a large compensation to one designated agent* whose name c r e a t e s n o
feeling of confidence in the purity with which his trust will be d i s c h a r g e d .
T h u s is this most important power—this unlimited control—assumed b y t h e
Secretary. T h e c o n s e q u e n c e s of such provisions need scarcely be e x h i b i t e d
before the Senate- T h e last item authoriz.es the Secretary to discharge t h e
banks " whenever^ in his opinion^ the public interest may require it — w h e n ever w h i m , caprice, party policy, the E x e c u t i v e order, may d e m a n d it.
{-his
is the tenure by which the selected fiscal agents of the G o v e r n m e n t hold t h e i r
offices—these the terms on which they are to discharge their duty t o t h e
public!
I n presenting this agreement, the Secretary has neglected to tell us w h e n i t
w a s e x e c u t e d with m u c h the greater number of the banks* T h e dates o f o n l y
three or four of the contracts are here. W h e n he was about to present h i m *
self before Congress, with his reasons for the removal of the public m o n e y ,
was it fair to m a k e this omission? One of these reasons is the curtailment o t
issues by the B a n k of the U n i t e d S t a t e s at a specific period* The d a t e s o f
these contracts, and the action of the D e p a r t m e n t in relation to them, w e r e
necessary in forming a just estimate of the c o n d u c t of the Bank in this P**~ticular; and y e t the Secretary c o n c e a l s this important information, w h i c h
m u s t have had a direct effect upon the action of the Bank.
T o m y apprehension, it is apparent that, in ordering the deposites o f t h e
public m o n e y to be thereafter made in these State banks, the Secretary h a s
been grossly negligent of his duty. H e had not made the necessary inquiries;
he acted without the proper information: and we are now called upon t o
justify his conduct, when it affects the whole treasure of the nation, and puts
« in jeopardy. B e t w e e n the 13th. when the decision was m a d e — t h e 2 0 t h ,
w h e n the notice was given in the Globe—the £Gth, when the order i s s u e d —
there was not time for obtaining the information and forming the c o n t r a c t s .
N o r w a s one of them made before the order was g i v e n . N o financier, h o w e v e r
skilful and prompt, could have made the inquiries, and e x e c u t e d the i n s t r u m e n t s , which the interest of the whole people d e m a n d e d on the occasion.
I here can be no relief to the Secretary from the fact that an agent had p r e viously
been appointed. Of that a g e n c y , and its effects, I shall be disposed to
s e
P ^ k h e r e a f t e r . H i s appointment could have been made only about the last
or
July, or first of A u g u s t , but a few d a y s before the order w a s given—time
e
JMlug»* perhaps, to inquire about some of the banks in a few of the commercial
cretary, under the c i r c u m s t a n c e s , could o n l y have acted under his dictation
and instructions, as agent of the agent. W h e n the Secretary affirms their u n doubted credit, I mean not to impeach or call it in question; but I am not w i l ling to rely on the mere assertion of such a fact, when involving the most i m portant c o n s e q u e n c e s to the country. If he has acted as he ^eems to have
d o n e , he has been gun ty of a gross dereliction of d u t y . H e has made his s e l e c tion, entered m t o his contracts without proper caution; and then, in violation
ot l a w , taken money from the Treasury* to enable the other p irtv to maintain
its s o l v e n c y , and perform i t s p a r t o f the agreement. Resort to illegal m e a n s
to maintain the ability of the banks is a strange e v i d e n c e of their c o m p e t e n c y
to discharge the duties assigned to them.
T h e r e is another cause of d e e p dissatisfaction with this act. W h e r e is t h e
authority of the Secretary to make this great contract, in which millions are
c o n c e r n e d ? If he had no legal right to make it, the contract is void, and your
security, such as it purports to be, is gone; and e v e r y thing in relation to the
safety of the public money rests on the honor anil honesty of the receiving
b a n k s . I am willing to trust them as far, perhaps, as others. B u t this is n o t
the kind of security which the laws demand. If the Secretary had t h e a u thority, w h e n c e is it derived? W h e r e is the law that confers it? I can find
n o n e . T h e 6th section of the act of 1st M a y , 18-30, ( 3 S t o . 1777,) directs that
** no contract shall thereafter be made by the Secretary of S t a t e , or of the
Treasury* or of the Department of W a r , or of the N a v y , e x c e p t under a lata
7
authorizing
the scnne^ or under an appropriation adequate to it a fulfilment?*
and excepting, also, for the subsistence and clothing of the army and navy,
and by the quartermaster's department, which may be made by the Secretaries of those departments. W a s this contract, then, authorized by a previous
law? or is that difficulty to be overcome by the argument of the Secretary,
that he was'authorized to remove the deposites, and that *4 the power to re*
" move necessarily draws after it the power to select the places where the
" public money shall be deposited P" T h i s is a non sequitur in itself, a n d
does not go far enough for his justification. T h e power to direct the deposites
to be removed does not necessarily draw after it the selection of the places
in which, and the terms upon which, it shall be kept. Unless Congress have
conferred both powers on the y same individual, they do not exist. T h e S e cretary, like every other officer, is but the agent of the law—to act by the law,
and not without law. T h e duty of deciding upon the propriety of a measure
may be imposed on one officer, and its execution be intrusted to another;
one may be required to decide when money shall be removed, while the r e sponsibility for its safe-keeping rests upon another. T h i s is the case in n u merous instances, and in all the Departments. I t is especially so in regard
to the finances. T h e law establishing the T r e a s u r y Department gives to the
Secretary the general duty of arrangement and direction, but creates other
officers for execution. A n exhibition of their relative duties will be required
in the course of my remarks; for the present, it is sufficient to state that the
T r e a s u r e r , and not the Secretary, is the officer bound to receive and keep
the money, wherever the place of safe-keeping is not expressly prescribed by
Congress. H e , and not the Secretary, is to decide in what particular places
it shall be kept, and the conditions and contracts under which it shall be k e p t .
T h e argument of the Secretary, that he must select the places, is not only
inconclusive, but, if true, it does not go to the extent necessary for his justification.
He must not only have the right to designate the places, but he
must have the right to make the contracts by which the money is to be kept.
Believing that he has no such power, I cannot but regard his act as a d i r e c t
and open violation of the law of the land. H e was in too much haste to execute his purposes before the meeting of' Congre$s^ to permit him to do what
his duty demanded that he should do, and in that haste assumed powers never
granted, and has put your whole T r e a s u r y at hazard. You have no law n o r
any valid contract by which it is secured.
T h e extent of power and influence which this act draws to the Secretary,
and through him to the Executive, upon his avowed principles, is enormous,
dangerous to the interests of the people and the liberties of the country. I t
places all the selected banks, and through them many other State institutions, at the mercy of the Secretary of the Treasury. H e may, at will, require
security for the public money, or he may require none. H e may require the
payment of heavy expenses, and compensation for his agencies, and fasten
them on whom he chooses. He may decide, at pleasure, which of them m u s t
transfer money from one extreme of the Union to another, and when a n d
where they shall transfer it—acts which they may, and probably will, be incompetent to perforin; and he may discharge them, without warning, from the
service of the Government. All this he may do for causes entirely unconnected with the business of the Treasury, and in no way concerning the public interest. T h e r e is no responsibility upon him—they have no means of
resistance- And his power of favoritism, in the deposite of money, distribution
of duties, and c o m p e n s a t i o n ' s as unlimited as his povyer of injury and injustice; and he has every possible temptation to its exercise for the worst of purposes. Subservience to his will will become the ready and sure road to benefits- Sir, the very act is calculated to create an army of servile sycophants
and supporters. W h e t h e r it will produce that result is yret to be shown*
T h e promptness with which the representatives of some of the banks have
volunteered their defence of him, and the manner in which his favor was
received by at least one, gives no very auspicious augury as to the result, but
too cJearly indicates the effect upon their dispositions. T h e Secretary was
very
promptly informed of t € the high sense entertained by the directors o f
44
one of the banks, of the honor conferred upon it by so distinguished a mark
"of his confidence," p . 37—a quick stooping to degradation*
This state of things is prescribed, not by the Legislature, but by a b e e r e t a ry, and is not dependent upon and regulated by law, but by his
discrettonAnd the man who presumes thus to act tells Congress that his acts are u n d e r
the
control of the President. He says, in effect, " I have no official w i l l —
4
*the President may order me as he pleases—the whole is at the command ot
" the P r e s i d e n t , " If there has been a larger or more dangerous stretch o f
Executive power and influence, I have not discovered it. It Senators a r e
prepared to meet the consequences of such an assumption, they have b u t t o
approve the reasons of the Secretary. T h e day is not long passed by, w h e n
it would have met the deep-toned execrations of the present supporters o f
Executive infallibility.
T h e law which created the Bank, which directed where and how the p r t lie treasure was to be kept, and what was to be done, did not so regulate this
subject. T h e intercourse between the Government and the Bank, in relation
t o the public money, was fixed and authorised bv law^ T h e acts directed t o
be done, or omitted, were, tmder it* matters of legal right? not of
Executive
favor.
T h e law was paramount and triumphant. T h e r e was no temptation
to favoritism or corruption. But, under the recent innovation, while suci*
unlimited powers are exercised by the Secretary ami the Executive, t h e r e
must be favoritism and corruption. I have no faith to bestow on the purity of
individual virtue, acting without law, in the midst of such temptations. M u c h
less can I approve of conduct in a Secretary so violative of all law, and l e a d ing so directly to encroachments which are dangerous to the liberties which
we enjoy.
M r . President, another act of the Secretary* in connexion with the removal
of the deposites, and in pursuance of the same purposes and objects, is the
order to public officers, and agents who are in possession of public money*
under bonds for its faithful disbursement and safe-keeping, to place it in the
banks designated by him. In a communication to the President of the 5th of
~
* certain.
itorw»
ke a
/hen
placed at the disposition of a public officer, in order to be applied to the
public service, remains the monev of the United States while it continues
in the hands of the disbursing agent, and is, consequently, sxdyject to the
control of the Secretary of the Treasury, as to the place of its
deposits"
And he thereupon proposes that all such money shall be deposited in one of
the banks having the depositee of the public money, if there be any such bank
a t the place of disbursement, and the nature of the disbiu semen will p e r m i t .
t h ^ h ° P ° f l t , 0 n , W a S . a P P r o ^ ™ the same day, and a c i r c u i t addreJsed to
the other departments tor their direction.
W h e n c e does the Secretary draw hi* belief, that money in the hands of an
agent, tor which that a~ent has given bond and security, and for the disbursement and safe-keeping of which he is accountable* is public money which he
has a right to control, and take the responsibility for it away from the agent?
W h e r e did he obtain this authority? Is it in virtue of his high office? He has*
by this order, placed all the disbursing officers under the cotitrol and check—
not of the Treasurer—not of the Comptroller or Auditor—not of the whole
Treasury Department—but of himself and the President alone. H e has also
thrown the hazard of loss on the Government. If the disbursing officers obey
the order, and the money shall be lost, the loss must fall upon the T r e a s u r y ,
or gross and shameful injustice be done to them and their sureties. Suppose
a case—and it may be fact and history more than supposition—that there are
several large disbursing officers in Washington, who have kept their monev m
t h e Patriotic Bank, and they have been compelled to transfer it to the Bank ot
the Metropolis, and it should be lost, either in whole or in part, by the failure
9
or depreciation of the latter—what must be the c o n s e q u e n c e ? T h e release o f
the officers to the e x t e n t of the failure. N o honest G o v e r n m e n t would c o m p e l
them or their sureties to suffer: it must fall on the T r e a s u r y , T h e y are not
left to j u d g e of their own interests and responsibility, but required to place
their m o n e y in a bank which the law did not create for that purpose, and w h i c h
the law does not control for that purpose. N o r has the Secretary bound t h e s e
bfca n k s , by his agreement, to receive or take care4Wof this money* It is neither
* entered to the credit of the T r e a s u r e r , " nor
deposited on account of the
U n i t e d S t a t e s . " — p . 39. H e has looked neither to the responsibility of the
bank nor the a g e n t s . Is there not, t h e n , absurdity, illegality, if not gross o p pression, in the act? H e s e e m s to have no limit to a s s u m e d power over the
fmblic treasure, and no guide but the disposition to pour every thing into the
ap of the favored banks.
B u t he here also s e e m s to have violated positive l a w . B y the 4th section
of the act of the 3d of M a r c h , 1809, paymasters, pursers, and other agents are
d i r e c t e d , w h e n practicable, to k e e p the m o n e y in their hands, " in some i n " corporated bank, to be designated for the purpose by the P r e s i d e n t of the
4
* U n i t e d S t a t e s , " &c- T h e P r e s i d e n t alone has the power of d e s i g n a t i o n ,
and they are to obey his order, and his o n l y , w h e n he shall give o n e .
Here
the Secretary declares that he h i m s e l f had designated s o m e b a n k s , and it i s
not k n o w n whether the P r e s i d e n t was e v e n informed w h i c h they w e r e , and
that he w a s proceeding to select others; and the order i s , that the agents shall
m a k e their deposites in such as he had s e l e c t e d , and in whichsoever he might
select* It w a s an order to place their m o n e y wherever the Secretary might
p l e a s e , and to change it w h e n he p l e a s e d . W a s this a performance of t h e
d u t y of the P r e s i d e n t untler the law? H e may perform his dut^r through the
instrumentality of his subordinates in the D e p a r t m e n t s ; but if he is c o m m a n d e d to do an a c t , does he obey the law w h e n he authorizes a subordinate
t o d o as he pleases; approves what he has d o n e , without k n o w i n g what it i s ;
and sanctions beforehand whatever he m a y do in relation to it? I s there n o
longer a n y authority in law? I s e v e r y thing s w a l l o w e d up in E x e c u t i v e d i s cretion? I admits sir, that this and a hundred other laws in our statute book
are folly and arrant n o n s e n s e , if the doctrine r e c e n t l y c o n t e n d e d for be true—that the P r e s i d e n t , in virtue of his authority to see the l a w s e x e c u t e d , has a
right to look to all cases of discretion
in E x e c u t i v e officers, to command t h e m
t o obey his w i l l , and to d i s m i s s them if they do not obey it. H e might as w e l l ,
u n d e r that d o c t r i n e , and without the aid of l a w , not only order agents w h e r e
and how to keep their m o n e y , but when and how to obey the orders of a S e cretary in regard to it, and discharge them for neglect. B u t that doctrine is
u n s o u n d . It is the e s s e n c e of d e s p o t i s m , the substitution of a single will in
p l a c e of the will of the w h o l e ; and w h e n e v e r it shall be approved by the A m e rican people, they will be s l a v e s , who may sing preans to their despot over
their chains, but they will not thereby render them less strong, nor, in the e n d ,
l e s s galling.
B u t , M r . President, the Secretary has not been satisfied with his orders for
t h e disposition of the future revenue of the nation; but he has d r a w n m o n e y
out of the T r e a s u r y , and used it without regard to legal provisions. H e has
given drafts, not signed by the Comptroller of the M reasury, to the U n i o n
B a n k of M a r y l a n d , for t w o or three hundred thousand d o l l a r s ; one to the
Oirard B a n k tor half a m i l l i o n ; another to the B a n k of A m e r i c a ; another to
t h e M a n h a t t a n B a n k ; and another to the M e c h a n i c s 5 B a n k ; each for the s a m e
s u m , amounting, in a l l , to more than t w o millions of dollars. H o w m u c h more
m a y be in the s a m e situation w e are not informed. Senators will find in the
a p p e n d i x to the pamphlet on their table Cpages 4 3 , 44, and 4 5 , ) a correspond e n c e explanatory of this matter. When these drafts w e r e matte and issued
w e do not precisely k n o w . T h e S e c r e t a r y , in his ** r e a s o n s , " did not c o n d e s c e n d to inform us respecting t h e m . H e c o n c e a l e d the facts. I c o n s i d e r e d it,
w h e n his reasons were read to the S e n a t e , and I saw the c o r r e s p o n d e n c e o f
t h e T r e a s u r e r and Cashier—I consider it n o w — a s a disingenuous c o n c e a l m e n t
o f an important fact, not m e r e l y useful, but indispensable, in forming an
opinion in regard to his c o n d u c t . H e g a v e orders to draw more than t w o
10
millions of dollars out of the Treasury, and yet does not inform Congress that
he had so done. He plays a game of hazard with your money, and does not
think it of sufficient importance to apprise you of it, or recollect that respect
for you and your control over the Treasury demand an explanation.
We
have however learned, without the aid of the Secretary, from another source,
that these drafts were made, or at least some oi them, and in the hands of the
cashiers, about a month before the 5th November last. As to their character^
we are informed, not through the Secretary, but by the letters ot the Treasurer of the United States to the cashier of the Bank ot the United States,
that
" they were not of the usual kind:*" ** they were issued by direction of
tfc
the Secretary of the Treasury, to be used in the event qf certain contingen" cies9 upon failure of which*they were to be returned to the Treasury\ and
" cancelled.**
And in the recent report of the Secretary* of the 30th December, in answer
to a call made upon him, which has been read, but which, being in the bands
of the printer, we have had no opportunity of examining, it is stated that * he
44
has transferred
money,, in some instances* from the J3ank of the United
4
* States to the selected banks* in order to enable them to defend the commit*
** nity against the ttnwarantable
attempts
of the Bank of the United
States
4
* to produce a state of general embarrassmeyxt
and distress***
<•
The3* w e r e , t h e n , d r a f t s , signed b y t h e S e c r e t a r y a n d T r e a s u r e r , for t h e
m o n e y legally deposited in t h e B a n k of t h e U n i t e d S t a t e s , t o the a m o u n t of
t w o inilhons t h r e e h u n d r e d thousand d o l l a r s , placed in t h e h a n d s o f t h e
cashiers of several b a n k s , to be used by t h e m , if they s a w fit. T h e y w e r e to
be used on c e r t a i n contingencies* W h a t contingencies? T h e y were n o t explained to u s . ^ W h o was tu j u d ^ e of those c o n t i n g e n c i e s — t h e S e c r e t a r y ? N o :
the b a n k s . W h a t security had the S e c r e t a r y that they should not be m i s u s e d ?
N o n e . T h e y w e r e in t h e h a n d s of t h e cashiers. P a y m e n t might h a v e been
d e m a n d e d , and t h e m o n e y s q u a n d e r e d ; or t h e cashiers escaped, a n d n o possible claim could have been sustained against t h e b a n k s u n d e r the a g r e e m e n t ,
or against t h e securities on t h e cashiers* bonds. T h e b a n k s could n o t b e a n s w e r a b l e until t h e m o n e y w a s received by t h e m , a m i c r e d i t e d on their b o o k s ;
t h e conditions of t h e cashiers* bonds e m b r a c e no s u c h t r u s t . T h e S e c r e t a r y
h a s d r a w n , and a u t h o r i z e d to be d r a w n , out of the T r e a s u r y between t w o a n d
t h r e e millions of m o n e y , a n d placed i t , without s e c u r i t y , upon the contingency
ot certain i n d i v i d u a l s , believing that the B a n k of the U n i t e d S t a t e s improperly
pressed t h e c o m m u n i t y , ( a fact on which h e was not to d e c i d e , ) to be u s e d ^ i t ,
in t h e m a n a g e m e n t of t h e business confided to t h e m , they should t h i n k t h a t
t h e y w e r e p r e s s e d , o r b e unable to relieve t h e c o m m u n i t y . W h a t a precious
g u a r d i a n over t h e T r e a s u r y of t h e c o u n t r y ! W h a t r e s p e c t has he s h o w n for
t h e provisions of l a w !
T h e s e t w o millions a n d more w e r e held b y t h e cashiers of those b a n k s t o
s u p p o r t their c r e d i t
I t was a loan of so m£ch of 11>e public money for t h a t
specific p u r p o s e . C a n a n y m a n m a k e more or less i f Tt? I t W M to pay n o
i & Ji ' T t 0 Tf,1 ™ c a »» a S a ' " s * t h * Government. It was to do nothing
which the laws of the Union had directed. It was a loan, to be used or not,
at discretion of the parties, to sustain their credit, and enable them to transact
their business.
iav#ic
Has the Secretary of the Treasury a right to loan two or ten millions of
dollars for such a purpose? Are Senators prepared to say that such a power is
in his hands, and to approve its exercise—and such an exercise witnout the
pretence or affectation of security? Suppose one of these cashiers had, during
the month, drawn the money and escaped; the Bank of the United States
would have been discharged for that amount, and even the cashier's bond
would not have been broken. Your money would have been cast upon the
waves, with no hope of its being drawn to the shore again. Your resortjmight,
perhaps, have been to the bond of the Treasurer of the United States, The
money was still on his books as belonging to the Government, as he tells you,
and he was responsible for it until legally discharged; but you would have
speedily found a credit given. It might have been done with much less disregard of law than has been exhibited.
11
I f s u c h a c t s be a p p r o v e d , you have n o g u a r d upon y o u r T r e a s u r y .
The
P r e s i d e n t or the S e c r e t a r y m a y p e r m i t a cashier to d r a w from it millions u p o n
millions of d o l l a r s ; a n d , if he escape, y o u r only r e m e d y is l i k e that a g a i n s t
t h e d e s e r t e d s o l d i e r — t o m a r k him u r w n . "
B u t , sir, in w h a t an aspect d o e s this p r e s e n t the S e c r e t a r y of t h e T r e a s u r y
before u s ! H e first perforins an a c t , highly questionable, to use th** m i l d e s t
p h r a s e , in o r d e r i n g t h e a c c r u i n g m o n e y s to be deposited e l s e w h e r e than C o n g r e s s d i r e c t e d , a n d then performs this illegal act. T o guard against the n a t u r a l
c o n s e q u e n c e s resulting from his o w n i m p r o p e r c o n d u c t , he c o m e s before u s
a n d apologizes for this a c t , by telling u s t h a t he h a d d o n e s o m e t h i n g else w h i c h
r e n d e r e d this u n a v o i d a b l e .
I f such things can be d o n e u n d e r our p r e s e n t l a w s with i m p u n i t y , if C o n g r e s s a n d the people of this U n i o n have been so u t t e r l y negligent as to leave
t h e public T r e a s u r y t h u s e x p o s e d , it is t i m e t h a t the evil was r e p a i r e d , a n d
s t r o n g e r g u a r d s t h r o w n a r o u n d it. B u t , in my a p p r e h e n s i o n , C o n g r e s s a n d
t h e people have not thus n e g l e c t e d their d u t y . T h e r e are g u a r d s enough to
p r e v e n t a S e c r e t a r y from t h u s t h r u s t i n g his h a n d s into the T r e a s u r y , a n d
s c a t t e r i n g it to the w i n d s . N o t the w a n t of l a w , but the violation of l a w , h a s
p r o d u c e d these r e s u l t s .
T h e a r g u m e n t of the S e n a t o r from K e n t u c k y was conclusive a n d i r r e s i s t i b l e , t o m y m i n d , on this p o i n t ; a n d I do not wish to detain t h e S e n a t e b y a
feebler a n d m o r e t e d i o u s exposition.
T h e c o n s t i t u t i o n , in s e c . 9, a r t . 1,
fc
h
a
s
s
o
l
e
m
n
l
y
d
e
c
l
a
r
e
d
that
*
no
money
shall be drcrtcn from the
^Treasury
4
* but in consequence of appropriations
-made by law*"
T h e law o r g a n i s i n g
t h e T r e a s u r y D e p a r t m e n t , on the 2d S e p t e m b e r , 1789, i m m e d i a t e l y niter o u r
G o v e r n m e n t w e n t into o p e r a t i o n , in the fourth s e c t i o n , d e c l a r e s , ** T h a t t h e
** T r e a s u r e r shall receive a n d k e e p the m o n e y s of the U n i t e d S t a t e s , a n d d i s 46
b u r s e t h e s a m e , upon w a r r a n t s d r a w n by the S e c r e t a r y of the T r e a s u r y ,
46
c o u n t e r s i g n e d by the C o m p t r o l l e r , r e c o r d e d by the R e g i s t e r , and not other" wise."
T h e s e drafts are d i r e c t violations of both the constitution a n d t h e
l a w . T h e y w e r e to t a k e m o n e y out of the T r e a s u r y ; they w e r e not in c o n s e q u e n c e of a p p r o p r i a t i o n s m a d e by l a w ; t h e y w e r e not to p a y d e b t s or to
satisfy a p p r o p r i a t i o n s or c l a i m s ; they w e r e not signed by t h e C o m p t r o l l e r , n o r
in the forms of the l a w .
I t is t r u e , sir, that a boast has b e e n m a d e , a n d not n o w for the first t i m e ,
t h a t n e w g u a r d s have been t h r o w n a r o u n d the T r e a s u r y in these d a y s of r e f o r m , (or w h a t e v e r else it suits the partisan to call i t , ) a n d t h a t the T r e a s u r y
is n o w m o r e s e c u r e , on this a c c o u n t , than in former t i m e s . W h a t a r e t h e s e
n e w f o r m s — n e w g u a r d s ? I t is said t h a t a c h a n g e has been m a d e in ihe w a r r a n t s ; t h a t now all the proper officers sign t h e m ; and t h a t they a r e s e n t w i t h
t h e n a m e of t h e T r e a s u r e r ; so t h a t no fraud can be c o m m i t t e d . A short e x p l a n a t i o n will show the fallacy a n d d e c e p t i o n of this boasting. T h e a c t
e s t a b l i s h i n g the T r e a s u r y , as we have s e e n , p r e s c r i b e s the m o d e a n d m a n n e r
in which the officers a r e to sign, to d r a w m o n e y out of the T r e a s u r y .
From
t h e m o m e n t of the passage of t h a t law to the p r e s e n t , as I believe, t h e form of
w a r r a n t s has been substantially the s a m e , u n v a r i e d in s u b s t a n c e , a n d in s t r i c t
c o n f o r m i t y with the l a w ; c o n t a i n i n g the n a m e of the p a y e e , s u m , a p p r o p r i a t i o n , & c . signed by t h e S e c r e t a r y , c o u n t e r s i g n e d by the C o m p t r o l l e r , r e c o r d e d by t h e R e g i s t e r , a n d signed by the T r e a s u r e r . N o alteration h a s t a k e n
p l a c e in these r e s p e c t s .
A f t e r the officers, with t h e T r e a s u r e r , h a d signed t h e m , e i t h e r the w a r r a n t s
t h e m s e l v e s w e r e d e l i v e r e d to the c l a i m a n t s , or s e n t for t h e m to t h e place of
p a y m e n t ; o r , in place of the w a r r a n t s , c h e c k s of the T r e a s u r e r w e r e s e n t .
T o t h e b r a n c h b a n k h e r e the w a r r a n t s u s u a l l y w e n t , a n d w e r e r e t u r n e d t o
t h e T r e a s u r y on w e e k l y or o t h e r s e t t l e m e n t s ; to places a t a d i s t a n c e t h e
c h e c k s or w a r r a n t s w e r e s e n t as w a s found most c o n v e n i e n t . I n both c a s e s ,
h o w e v e r , the T r e a s u r e r e i t h e r k e p t the w a r r a n t s , or t h e y w e r e r e t u r n e d t o
h i m , on s e t t l e m e n t with t h e paying b a n k , and he kept litem as his
vouchers.
T h e only difference of which I arn a w a r e , t h a t h a s been m a d e , i s , t h a t , i n
1829, the T r e a s u r e r w a s d i r e c t e d a l w a y s to s e n d t h e w a r r a n t s ; a n d t h u s t h e y
12
there is no difference. ISor was it a matter o i i » e s n a n u ^ t vs l -KI u v d^ Wr the
long as the Bank of the United States, created by and ^ P ° » ^ i o " f s JgJ
law* received, and paid, and kept the warrants. N o w , I »*>k* " h c l e« ">J n £
extraordinary merit of this luminous invention? f o u r years f«« ^ " ^ * ™ V J J
sounded from Maine to Georgia, as evidence of skill and paternal cateovet
the Treasury, and watchfulness against fraud; another reason tor deep per-*
sonal devotion to a man who knew no more ot the matter, at the tune, m a n
you or I . Of such stuff, sir, is popularity sometimes made; and sucn are tne
trifles, lighter than air, imposed on partisan credulity.
The drafts of which I have spoken were a violation of the constitution a n a
the law, and were given in despite of these warrants, not only in their original
but their amended shape. These new and boasted guards against petty frauds
were insufficient to protect your Treasury against the more stupendous inroad
of Executive—discretion. They might prevent the filching ot a few dollars,
but could not restrain the unlocking of the T r e a s u r y , when millions were to
be subtracted.
These drafts also violated the agreement between the Bank and the T r e a sury Department, made by Mr- Crawford in September, 1819, by which a
notice of thirty, sixty, or one hundred and twenty days was to be given, when
money was to be transferred to different places—an agreement which has not,
I believe, been insisted on by the Bank in ordinary cases. T h e y were secret
drafts—a fact which this officer had not the courage, or, if he had the courage*
had not the candor to state to Congress* They were to be paid upon sight*
instantaneously, whenever the holders chose. A demand for more than two
millions might have been made upon the Bank at any moment; and, if not
instantaneously paid, it must have been dishonored, and the pure and generous
purpose avowed by the agent accomplished. And now, sir, the Bank is
charged with dishonesty for guarding against it. It knew—it could scarcely fail
to know—from the plainest indications, that drafts were out; but theiramount*
and when and where they would be presented, was not known, and could not
be, unless the Secretary, or one of his subordinates, had given the informa-d
tion. It was concealed, because the object required concealment. *>P
when, under such a state of iacts, the Bank prepared to meet the blow or its
covert enemy, fall tvhen and where it would, it is accused by the Secretary
of misconduct, and a violation of its charter. T h e accusation is worthy of
the maker of contingent secret drafts.^ Sir* if this conduct be sustained, you
have no guard upon your T r e a s u r y . Your President and Secretary may take
from your vaults whatever they please, and when they please, and dispose of
it where they please, and you have no remedy. I repeat the inquiry*—are
Senators prepared to justify the act?
T h e apology made for this violation of law and duty is, that they were
transfer ilrqfts.
W h a t , M r . President, is a transfer draft? It is this, and
nothing more. A direction from the Department to the Bank to send a particular sum of public money from one place to another, where the Government needs it. If it has money in Philadelphia, which it wants in Lexington
or Norfolk, it is a direction to send it to Lexington or Norfolk, that the
checks or warrants of the Department may be paid there. I t is a draft, simply designed to change the positioix of the money, but not to change the custody of the money. In its change, and in its new location, it remains under
the same custody, upon the responsibility of the Bank, and so continues,
until it is drawn from its new location, in regular warrants from the Depart*
ment, for the payment of debts. If lost in the transfer, in passing from one
>osition to another, or after the transfer, and before it is paid out, it is the
oss, not of the Government, but of the Bank, T h e transfer itself is the act
of the B a n k . I t may be directed, but it is not and cannot be performed*
either by the Secretary or by the Treasurer. T h e y may, as we have seen,
draw money out of the Bank, and, after it is drawn out, use it as they please*
y
13
and violate law while they do it; but under the charter, the Bank mtjst make
the transfer* I t is a gross misnomer to call these drafts transfers. W h o ever
before heard of a transfer draft to change money from one side of a street to
another? from one end of a town to another? to take money from one bank to
loan to another to sustain its credit, or enable it to do even the high and meritorious act of protecting- the community from oppression?
Drawing money
out of the B a n k , or T r e a s u r y , for any purpose, is no transfer. T h e Bank
loses its possession* I t is a payment by it—a payment of money out of the
T r e a s u r y ; and then the responsibility for loss falls, not on the B a n k , but on
the Government. A transfer can only be made while the same legal responsibility exists before, at, and after the transfer. T h e s e contingent drafts
were payments of so much for the Government; and these payments were
not made in the forms, nor according to the requirements of law. Sir, they
m a y be called by any name that our contingent Secretary may select; but he
ought not, by giving wrong names, to be permitted to deceive the public. H e
has violated the plain requirements of law, and should be held responsible for
it* T h e law is ample to guard the T r e a s u r y ; it requires only to be faithfully
administered. I t is proper here to remark, that all these contingent drafts
were not used; a part was returned to the T r e a s u r y . T h e y were made, it is
said, to sustain the selected banks, and protect the community from the pressure of the Bank of the United States. Now, if it was proper to draw them
for that object, and if the Bank has continued its oppressions, as is hourly alleged, why were they not all used? Does no more pressure on the community
exist? H a s the Bank done no more evil than that which could be repaired by
t w o millions of dollars? I s the Secretary sincere in his exhibition ot the cond u c t of the Bank? H a s he power to use the public money to resist it? and
does he use only a part, when he might arrest wrong and oppression by using
the whole? W a s that his object? Credat J9ppettaf
Before I pass from this subject, I must be permitted to remark, that the
time which tne Secretary chose draws none of my respect towards him or his
act. H e k n e w at the time that he could not complete it before the meeting of
Congress. H e is even now, while we are deliberating, pursuing his object,
a n d completing his arrangements. H e knew that Congress would not approve the removal. For three years the question respecting the Bank has
been agitated in various forms; and at the last session this very subject was
brought before Congress on the controlling recommendation of the President,
and when his political friends were in a large majority; and Congress r e fused to yield to his wishes, and declared the deposites safe. Yet, in less
than six months afterwards, the Secretary spurned their opinion, and did the
a c t , and now comes to Congress to approve the contempt which he has heaped
upon them, and expects fawning for the kick which he has given them! Sir,
w h y did he thus scorn the opinion and will of Congress? It was, sir, that
another, a n d , if possible, more signal act of scorn for the legislative power
might be exhibited to the world- T h e deposites could not be removed by the
joint action of the Executive and Legislature, without a majority of the latter
in favor of the removal. B u t if that Was made by the authority ot the P r e sident or Secretary alone, they could not be restored; as a single word, VETO,
would prevent that majority from accomplishing their wishes. T w o - t h i r d s
would then be required; and this, the word, the wishes of the President, and
t h e force of party, would prevent. T h e act was therefore d o n e ; done before
t h e meeting of Congress, for the sole purpose of preventing Congress, thfe
majority of Congress, the Representatives of the people, from exercising their
j u d g m e n t and powers in relation to this question, and the management and
control of the public treasure. I t needs no development of the guilty pur*
poses of guilty agents to see that this was the governing motive in selecting
t h e time—for the haste with which the removal was made. In sixty-six d a y s ,
Congress, authorized by the constitution and laws to decide this matter, would
have been in session; and the act, I repeat it, was then performed to prevent
the action of Congress. Sin the power of Congress has been scorned—disregarded; a n d , through them, the people, whom they represent, abused. A
14
trick, a cunning device, has been resorted t o , to cheat the legislative p o w e r of
the country of its rights. T h o s e whom the people appointed guardians of t h e
ublic treasure have been defrauded of their constitutional authority. T h e
ecretary knew that Congress was approaching. W h y , then, did he d o this
act? W h y does he now insult Congress by continuing thus to act, while w e
are here to attend to our constitutional duties? Search the records of history,
from the earliest times to the present, and you can find no act of lower c u n ning, or haughtier scorn, by any usurper, towards the legislative body. W h o ,
before this, has ever dared thus to contemn the power which the people had,
by their solemn charters, bestowed on their Representatives? None, sir, none.
If it be the will of the people thus to surrender their own powers in the h a n d s
of their constitutional Representatives, and justify the trespass upon t h e m , so
be it: I will not be accessory to the justification. If the charter of the Bank
were to expire in fifty days, it would be due to the relative powers of o u r
Government, and the honor of Congress, to order their immediate restoration.
S
T H U R S D A Y , JANUARY 9,
1S34.
M r . S O U T H A R D continued his remarks, as follows:
M r , President: I yesterday attempted to present my views of the acta p e r formed by the Secretary of the T r e a s u r y , and of the laws and principles a p plicable to them; and mskle some remarks on the time selected by the S e c r e tary as calculated to prevent and avoid the action of Congress. The purposes
of the Executive have been confirmed by subsequent acts. Within a week,
while we are deliberating on this question, we are told, that orders have been
issued forbidding the B a n k , or some of the branches, to pay the pensions; a n d
transferring tins service to others. I t was originally assigned to the C o m missioners of Loans and the agents for paying pensions, by the act of the 4th
August, 1790. I t was afterwards transferred, by law, to the Bank of the
United States, by the act of 3d M a r c h , 1817. By this transfer, the Governm e n t was relieved from an annual expense of not less than forty thousand d o l lars* T h e B a n k is now forbidden to perform the d u t y , and the Executive, qf
his own authority, or Ins subordinate, has constituted the selected banks Commissioners qf Loans and Jigents for this purpose. T h e law expressly c o m manded what is now forbidcien. Your statute is repealed, and official d u t i e s
imposed by Kxecutive m a n d a t e . I ask for his legal authority. I demand t o
know if there is to be no limit to these trespasses upon the legislative power?
An attempt to transfer these duties was made three or four years ago, resisted*
retracted; but is now repeated in more offensive form, as the natural result of
the previous misconduct in removing the depnsites.
1 have stated that a large amount of money had been drawn from the T r e a sury, and distributed among the favorite banks. Surely, at a time when the
Secretary was loaning the public money so freely, all the Departments of the
Government ought to have been full-handed, without need of pecuniary aid.
Yet it so happens that one of those Departments, without authority of law, h a s
borrowed,upon six per cent, interest, more than four hundred thousand dollars.
B y a report of the Postmaster General, just laid upon our tables, we are i n formed that he has borrowed, since the 28th December, 1832, $350,000, which
is unpaid; and $50,000 more, which has been paid; and overdrawn to an u n a s certained amount, but supposed, by estimate, %5O,00O more: and we all k n o w
that contracts with the Department are unsatisfied, to a great extent. T h e
time when these loans were made, and the banks by which they were m a d e ,
are worthy of observation, as explanatory of some parts of the conduct of t h e
Secretary.
Onehundred thousand dollars were loaned of the Manhattan Bank, between
28th December and 1st April, while Congress ivas in session*, and
immediately
after its adjournment*
For four years preceding this event, Congress and t h e
country have been regularly assured, even hy the President himself, that this
Department was in a flourishing condition, and managed with great economy
15
and skill, by a most faithful officer; and those who doubted or denied were
denounced in no very measured terms. A t the opening of this session, in that
very month of December when a part of this money was borrowed, the President assured Congress, from the report <>f the Postmaster General, which he
transmitted, "that that Department continued to extend its usefulness, without
** impairing its resources, or lessening the accommodations which it affords in
** the secure and rapid transportation of the mail." Sir? have Congress been
fairlv and honestly dealt with on this subject? Has not imposition been practised? I do not say intentional, so far as the President is concerned. H e
may have been, and probably was, utterly ignorant of the true state of facts.
B u t the truth has not been told; the people and Congress have been deceived.
W h i l e praises were bestowed, and we were ordered to believe them, thai Department
tvas insolvent.
And -white Congress was in session* it borrowed
money, without the permission or knowledge of Congress, and in disregard of
law and duty.
On the Q8th April, 1833, $50,000 were borrowed of the Western Hank of
Philadelphia,
On the 5th June, #50,000 more of the Bank of
MarylandOn the 25th October last, at the time qf the loan by the Secretary of the Treasury to the banks—on the 1st November, immediately after the Secretary's
loan, $50,000 of the Commonivealth Hank of Host on; and on the 3 l s t D e c e m ber last^y^wr tveeks after Congress was in session^ 9100,000 of the Manhattan
Hank.
Some of these, perhaps all, are among the favored banks. Some of thern
held the contingent drafts, and others were in correspondence with the agent
of the Treasury, when these loans were made by the Postmaster General.
T h e time^ on which the Secretary dwells so emphatically, is no longer to be
wondered at. It corresponds welt with the wants of the Government, if it
does not with the rights of the Bank and the interests of the community. Are
these things to be tolerated and approved? Sir, the fraud of this whole matter
is stupendous and appalling; the disregard of law, and contempt of the legislative branch of our Government, intolerable. Are Senators prepared to approve
it all by their votes?
Having looked at the acts of the Secretary, it becomes necessary to examine
the principles which he avows, and the reasons he has given for their justification. It is due to him, and much more to ourselves and our institutions,
that this examination should be full and rigid.
I must be permitted here to remark, that, in my examination of these principles and reasons^ I have not permitted myself to regard the question before
the Senate as an issue between the President and the Bank of the United
States- If" the President on one side, and the Bank on the other, have formed
an issue, let them try it. It does not become the Senate to try it for them, or
to become a party to it. W e are not to took at the consequences upon an individual, whether he hold the office of President or not. T o the incumbent
of that office, who is speedily to pass from power, it can avail little, personally,
unless he acts under strong passions and prejudices, and seeks the perpetuation of official power in the bands of favorite partisans. W e are not to look
at the consequences to this Bank, except so far as its rights may have been
assailed by a violation of the terms of its charter. It will soon cease to exist,
if it be not the will of Congress that its existence be prolonged for the purposes of Government—and that will be a question of magnitude and difficulty enough tor the day when its decision may be required. But we are to
look to the effects upon the Government and institutions of the country, and
the rights and interests of the people- W e are investigating principles and
reasons immensely more important than the interests or wishes of any President and of the Bank combined—of a magnitude deeply affecting the future
well-being of a great nation. The supremacy of the law, the sacredness of
the constitution, the rights of the people, are matters concerned in the issue
before us; and wc are to look to it that these do not suffer by the misconduct
or the malignant passions of rulers*
I propose to admit, for the present at least, that the reasons offered by the
Secretary are sincere, and that he acted upon his own judgment* not by the
16
command of his superior. I t requires, indeed, some faith to make the a d m i s sion, when we reflect upon the argument of the Senator from Kentucky, a n d
add to it the language which we find in the letter of Mr* Duane, of t h e 23d
September, that he ** was to consider himself directed to act on the responsib i l i t y of the P r e s i d e n t , " and that, if he would stand by him, it would b e
4
* the happiest day of his life." I t requires still more faith, when we compare
the paper read to the cabinet with the reasons of the Secretary. The language*
the ideas, the facts, the reasoning, all indicate a common origin—the dicta*
tion one head—be that head whose it may, whether the President's, the S e cretary's, the agent's, or some unknown person. Without stopping to inquire
either into the similarity or parentage of these documents, or into the feeling
which could have produced this state of happiness on accomplishing such a
purpose, after such a life of usefulness as he has led, and the acquisition of so
much glory as we are assured he has won, I take the act as the Secretary's,
and the reasons as his justification. If he has acted incorrectly, the mandate
of power can furnish no apology*
T h e Secretary assumes, without proof, certain principles as true. If t h e y
are false and unsound, no system of honest logic can deduce safe conclusions
from them. H e creates some difficulty in
their examination, by a confusion
and
alternation in the use of the terms 4* Secretary of the Treasury*" a n d
44
Treasury D e p a r t m e n t , " as if they conveyed the same meaning. There i s
great distinction between them. T h e Treasury Department is a creature of
the law and the constitution, and consists of several officers, whose separate
and respective duties are prescribed; of whom the Secretary is but one, a n d
with no more undefined and unlimited powers than the others. Each has his
sphere of authority and service; ami neither can properly interfere with t h e
rest, except in the mode and to the extent which the law has established.
In pa§e 2 of the report, it is affirmed that " the Treasury Department
44
being intrusted with the administration of the finances of the country* i t
44
was always the duty of the Secretary, in the absence of any legislative pro44
vision o*i the subject, to take care that the public money was deposited i n
44
safe-keeping, in the hands of faithful agents, and in convenient places, ready
44
to be applied according to the wants of the Government." T h e principle,
thus announced, in its length and breadth, is unsound. If it be true that the
Treasury Department is intrusted with the administration of the finances,
does it follow that the Secretary alone is to perform the high functions t h u s
claimed, in the absence of legal provision/—that
he is to discharge important legislative powers antl duties? Certainly not, unless the law creating
him authorises it. H e doubtless means, that the power claimed is a necessary emanation from the nature of his office. * It pre-existed the Bank char*4 ter, and was reserved by it. If Congress do not legislate respectingthe
places of deposite and safe-keeping, he must supply their defects.* W i t h
all the respect which I can feel for the Secretary, the position seems to me to
be absurd, and an assumption of undelegated authority. T h e act establishe s the Department,and creating his office, gives him no such power. [ H e r e
Mr. S. read the first and second sections of the act of 2d September, 1789;
the first establishing 1 the Department, the second creating the office of Secretary, who was to be deemed head of the Department, ]
Does this claimed power arise from the first duty enjoined, 44 to digest and
"prepare plans Jar the improvement and management of the revenue* and for
44
the support ofp%d>lic credit?"
H e is but to digest and prepare the plans, not
to execute them. T h e y are to be sanctioned by Congress, and their execution to be directed by Congress—the high legislative power which is to determine respecting the revenue.
From the second—** To prepare and report estimates of the public revenue*
44
and the public expenditures?"
T h e same comment applies to it.
From the third—>4t To superintend the collection qf the revenue?"
The
revenue itself, and the mode of its collection, must, of necessity, be directed
and
prescribed by the Legislature* and the Secretary can have no duty in r e X
*° it, but to superintend its collection in the prescribed mode, and see
§ lat the
will of Congress is obeyed and executed.
17
"There are other duties mentioned in this section; but they can have no c o n nexion with the power claimed by the Secretary. From what branch, t h e n ,
of his official duties does the power arise? From n o n e . It is as purely a l e gislative power as any which ingenuity can d e v i s e — v e s t e d in Congress, of a
high character, and with which no inferior officer can interfere, e x c e p t so far
as he may be expressly d i r e c t e d . S u c h direction is not pretended. A l l his
general authority exists in that law. H i s office has neither been enlarged nor
contracted from that day to this. H e seems to have forgotten that he is the
creature of the law, with such capacities as it gave—that he is not the JDepartment)
and has not all the power vested in the Department, but that there
are other officers with their powers and duties. One of these is the T r e a s u r e r ,
and to him this very d u t y of safe-keeping is expressly assigned. T h e fourth
section requires the Treasurer to " receive and keep*' the public m o n e y , and
compels him to give bond in $150,000 that he will receive and k e e p it safely.
L i k e all other officers and a g e n t s , who
hold public m o n e y , he, and not the
•Secretary,
is bound with sureties, tfc to take care that the public money is d e 4
* posited in safe-keeping, and in the hands of faithful agents, and in c o n v e 4t
nient places, ready to be applied according to the Avants of the G o v e r n *** ment;' ? which wants m a y be indicated to him through the Secretary.
Place
is a necessary part of keeping^ if it fails in safety, the officer—the T r e a surer—must a n s w e r for it, unless the law directs the place, and then the offic e r is not responsible.
T h e history of the Department corresponds with this v i e w . Before a n y
place w a s designated by Congress, the Treasurer kept the money where he
s a w fit, and was answerable. W h e n the B a n k of the U n i t e d S t a t e s w a s
chartered, in 1817, Congress required that it should be deposited in it, and for
i t s safety, while there, the Treasurer is not bound to a n s w e r . B u t if» from
a n y cause, it be taken from t h e n c e , without the order of Congress where it
shall be kept, the rights, and duties, and responsibilities of the Treasurer rev i v e ; and in their exercise he cannot be controlled by the Secretary, w h o
m a y , i n d e e d , direct him that the G o v e r n m e n t n e e d s the m o n e y in any ^iveri
p l a c e , (as Baltimore, for instance,) bat for its transfer and keeping there, until
used for the G o v e r n m e n t , he must himself respond- A n order from the S e c retary to place it in any given situation, or to let it out of the place prescribed
by Congress, can be no protection to him against the forfeiture ot his bond.
T h e contingent and other drafts which removed the money were not legal a u thority. It the money be lost, his bond is broken. S u c h , if he had c o n s u l t e d
t h e m , w o u l d , I am confident, have been the advice of the t w o Secretaries w h o
p r e c e d e d the present o n e .
T h e power in dispute is a legislative power—purely legislative. Congress
has the right to say who shall exercise it; a n d , having granted it to the T r e a surer, it is a usurpation by the Secretary, for which no reasons can apologize,
n o necessity excuse. H e has assumed the very e s s e n c e of legislation—to deal
w i t h , to control, to manage, the purse of the nation. A n d even if it be proved,
that the p o w e r was e x e c u t i v e , it would not relieve h i m . A n e x e c u t i v e p o w e r ,
t o be exercised, must be conferred $ if not conferred on him, he has no right to
assume it. B u t , sir, the Secretary proceeds to tell u s , in substance, that this
p o w e r was reserved by the B a n k charter, without limitation or restriction;
that Congress cannot interfere with the subject until he has a c t e d : that, in his
a c t i o n , he is to j u d g e of the general interest and c o n v e n i e n c e ot the p e o p l e ;
that, although the m o n e y is safe in the B a n k of the U n i t e d S t a t e s , v e t , a s i t
has violated its charter, it was his d u t y to remove the deposites; and that t h e
P r e s i d e n t has the supervision and execution of the l a w s , and therefore a
right to control him in the d u t y which he has to discharge in relation to this
Jaw.
T h i s is a simple statement of his opinion; and it will be at o n c e perceived
t h a t , a s he considers his right original, from the nature of his office, so that o f
t h e4 P r e s i d e n t results from his general authority to s e e the l a w s e x e c u t e d .
T h e right i s reserved by the B a n k charter.' T h e n it existed before t h e
B a n k charter. I t is unlimited and without restriction. T h e n Congress has
s
18
no authority of interference* The Secretary expresses his wonder that Congress should have given him such a power. In this wonder I cordially join
Kim, if his notions have any resemblance to the truth. But I am aware of no
such surrender of power by Congi-ess to him or any other executive agent.
His error is, that he has assumed, without proof or argument, that which did
not exist. And I must here be permitted to remark, that, while the Secretary
complains of the Bank enlarging its discounts, in order to compel Congress to
recharter it, he assumes this ungranted power, and exercises it. to compel
Congress to act in unison with his views; he turns round and does an act,
Avhich he believes, and which is boasted of before the whole nation, as changing the deliberation of Congress from the question of removal to that of restoration; as compelling the majority of Congress to yield up its rights, and subjecting it to the veto power. Whether the complaint against the Bank be well
founded or not, the assumption of the Secretary is unpardonable. And if his
complaint be true, Congress has been, between these conflicting parties, placed
in a predicament neither honorable to its character, nor salutary to the exercise of its powers* unless it shall firmly sustain its own authority, which I
trust it will do. Xhe constitution and laws demand that it should.
With regard to the supervision of the Kxecutive, I remark, whether the
Secretary acted under the command of the Executive or not* his own responsibility is not changed. His responsibility is created by the law, and can
neither be thrown upon
nor assumed by another.
** The President com*
jmanded, and I did it>?—" Do, and I will protect you, and it will be the happiest day of my lite"—arc no apology «>r justification. They do not, in the
least, remove the guilt of misconduct- The President cannot* under our laws,
and agreeably to our system, take upon himself that which the law has laid
upon another, whatever may be his choice or his desire. There are only two
modes in which responsibility and its consequences can be removed from a
guilty agent. One, where the commander, at the head of his forces, with
sword m hand, protects Ins subordinate—a mode better fitted for Eastern des-
tect v o u - my approbation, shall be sufficient t o ^ k e o t h e r s " a p ™ , my
popularity shall be your shied. I will admif <*;,* If•;•
, -i \u l!J;J,„~5?fi^
Hon, that no man who ever lived had b e t t ^ r ;S^ % Slta W1
y )*W^ P ^ e? ^ ? ^
sponsibility on myself. W e have seen eein£*h
K
' * Vi *fH ?ll h!l
nonularitv pvon r a n c f l h i t j L ? !
* - . n V u § h t o a s s u r e u s that before his
Seemed ifonwafl
have given way in men who were
aeemeci Honorable and honest. Is one ever made his followers change opinions
prostration or noerty. It is the Davcrl rr^rl *.. Vi
^
' . - . < * « « . AK
stacle to the progress of the vie to??
despotism, which ofters no obMr* President, if there does now evist in *L;« ^ x
* • u -«„
r its simile volition and word VrliZVl Ii" JI H f * ? u n t , > \ a P°. w e r which can
i£Z™tS%^S*£?&Z£ople*
a
I hl
a m , d s t
e
*«»*• ™« convulsion S ,%H seek
t,ver
itrnav*to *vour fW^ ^ V ' " ^
£ *1
^d can be used to your Secretary,
i n ? ? f e F/ec"utS P * r S- , C r ' ^our Reg.ster, your Auditor, your Treasure'';
and the Executive can dispose of tlie treasure at his will. Kveiv possible o b stacle is removed from before the vaults of your Treasury. 7have always
19
understood the s y s t e m of our G o v e r n m e n t , and so I have read the short but
eventful history of m y country* that it was the fixed purpose of those w h o
fought for, and of those who c r e a t e d , our institutions, so to arrange them that
the purse and the sword should be forever disunited; and the E x e c u t i v e should
n o t , by possibility, touch or control one dollar of the public treasure, u n l e s s
he was not only permitted, but commanded by law.
There was not, during
the periods in which our State and General G o v e r n m e n t s were formed, o n e
single approved opinion which did not recognise this doctrine. Separate the
purse and sword I—separate t h e m ! — w a s the language of those times—their
union is despotism!
This principle is on exGiy page of our history, and w a s
intended to be carried out m the formation of*the legislative and e x e c u t i v e
branches of the G o v e r n m e n t . T h e i r powers were defined as much with this
a s a n y other v i e w .
A n d , sir, the law creating the Treasury Department was formed in the
same spirit. It was necessary—could not be avoided—to leave it, in some
s e n s e , an E x e c u t i v e Department; but every provision was inserted which
could tend to make it subservient to the Legislative, and not the E x e c u t i v e
w i l l . T h e Department of State, created in J u l y , 1789; the W a r D e p a r t m e n t , created in A u g u s t , 1789; and the N a v y Department, created in April,
1798, are purely e x e c u t i v e . T h e officers at the head of the two former are
c o m m a n d e d , in the same words, to "perform and e x e c u t e such duties as
" shall, from time to time, be enjoined or intrusted to them by the President of
" t h e U n i t e d States, agreeable to the constitution," relative to matters pertaining to their Departments, T h e officer at the head of the latter was c o m m a n d e d tfc to e x e c u tr e such orders as he should receive from the President of
the United States, ' relative to matters c o n n e c t e d with the naval establishment* A n d they all communicate with the P r e s i d e n t , and not with C o n g r e s s .
T h e Legislature makes its calls in regard to their d u t i e s , and gives its orders
through the President, and receives their answers, and the reports of their
c o n d u c t and situation from him. N o t so the T r e a s u r y Department, I t takes
care of tlie public m o n e y . B u t how? A s the Legislature d i r e c t s . It d i s burses the public money. B u t how? A s the l e g i s l a t u r e c o m m a n d s . I t reEorts the state and condition of the T r e a s u r y , and the situation of the finances,
iut to whom? N o t to the E x e c u t i v e , but to Congress. Congress calls for i n formation, plans, s y s t e m s of finance. But on w h o m , and through whom? N o t
on or through the E x e c u t i v e , but immediately and directly upon the Secretary.,
H e is required to look to the disbursement of the public money. B u t by whose
orders? T h e President's? N o , sir, no; by the command of law. H e cannot
h i m s e l f take one dollar out of the T r e a s u r y , but in the forms prescribed—the
countersigning of the Comptroller; the record of tlie Register; the signature of
the Treasurer: and " not otherwise"—words
useless in the construction of the
a c t , except to show the rigor, and caution, and anxiety of those who framed
it, in regard to the use of the public funds, and their desire to prevent all E x e c u t i v e interference with the Treasury, ^ y h y was not the bond to receive and
k e e p the money given by the Secretary, if he w a s meant to be the keeper of
tlie money? W h y are all who hold and disburse m o n e y required to g i v e
b o n d s , if the Secretary can dispose of it as he pleases? W h y did the T r e a surer select his own places and agents for keeping the money before Congress
prescribed the place and the agents, if the Secretary had the power? T h e
d e s i g n of our laws is obvious; the relative duties of the officers are apparent.
T h e y must not be set aside and repealed, because the Secretary may imagine
that the interest and c o n v e n i e n c e of the people demand it. Of that interest
and convenience Congress, and not the Secretary, will j u d g e . I f one dollar
o f the money drawn out shall he lost, the tribunals of the country will teach
the Treasurer that he, and not the Secretary, must find it; and the E x e c u t i v e
m a n d a t e will be insufficient for his protection. T h e design and the words of
the constitution and the l a w s , in separating the Treasury D e p a r t m e n t , as far
as practicable, from Kxecutive control, will in them meet its just illustration
and supportB u t it is said that this course of reasoning is of no avail, because the Fresi-
20
dent has the power of dismissing all except judicial officers, and, therefore,
has power to discharge the Secretary, unless he thinks as the President t h i n k s *
and acts as the President directs; and that, by this means, he has control o v e r
all the actions of all the officers under the Government, Is this, sir, t r u e ?
I s this power of dismission thus supreme and irresistible? If it be, it is a
strange anomaly in a tree Government, and under t'coe institutions; aird n o
time should be lost in erasing it.
I do not mean, at this time, to discuss the existence of the power of d i s m i s sion, or to question its constitutionality. T h e resolutions do not seem to m e
to call for it; and the time may shortly come, when we shall be driven to t h e
investigation, by an imperious sonse of our obligations and duties. # I t is t h e
ractice u n d e r it, and the principles anil motives by which its exercise s h o u l d
e regulated, if it does exist, to which I would call the attention of the S e n a t e *
It was first brought into discussion on the organization of one of the D e *
parturients, in 1789. Parties were divided upon it, and then first m e a s u r e d
their strength and intellect. T h e majority of the Federalists were in favor o f
its existence in the President alone, without the co-operation ot the S e n a t e ,
the co-ordinate power in appointments. T h e Anti-Federalists, a f t e r w a r d s
called Republicans, were opposed to its existence, and believed they s a w
danger in its exercise. Gerry and others pointed out, with the spirit ot p r o phecy, the malignant use which might* and, in corrupt times, probably w o u l d ,
be made of it. Madison and others* in the purity of their own hearts a n d
purposes, did not believe in the danger. T h e y thought that its exercise, for
any motive but the support of law, and the faithful administration 01 official
duties, would justly subject the President to impeachment* They did n o t
foresee the coming events which were te take place at the close of forty y e a r s
from that d a y . T h e r e was not then a man in the Congress of the U n i t e d
States who believed that this power could or would be used for mere personal
or party purposes, for personal or party revenge; much le*s to obtain control
of the T r e a s u r y of the country, by the discharge of the officer placed over i t
by Congress, because he would not consent to exercise his discretion in t h e
mode which the President might dictate, and within seventy days of the mecti n g o f Congress.
T h e Federalists prevailed in that discussion by a smalt vote, and the practice since has been in conformity with the decision, T h e power has been e x ercised by all the Presidents, but to a very limited extent, except by the n p< r ne sent. In no instance—by none of them—upon the avowed ground that * ^
b u t personal partisans of the President should be permitted to hold office, t h a t
*he triumph of party drew after it, as its appropriate incident, the dismission
of incumbents who did not join in the elevation of the single occupant or E x ecutive power, although their merits were undisputed. Sir, this ts *« odious
enlargement and perversion of a questionable power. T h e spoils ot p a r t y ,
thus secured, are the triumphs of corruption over virtue and the constitution.
T h e power of dismission, if it be exercised at al), should be exercised lor
competent cause: and that competent cause must exist in the law* and b y
the commands of the law; must be connected with the actual discharge ot t h e
duties required by law; to prevent the performance of acts expressly forbidden by law; to secure the performance of acts expressly commanded by l a w ;
t o relieve from fraud and mental incapacity to discharge the duties arising
u n d e r circumstances which eould not otherwise be controlled. I t is, perhaps,
a useful, but temporary agent, to guard against evil, until the legislative body,
m its several branches, shall be enabled to act. Hut where discretion is vested
by Congress
in an agent, it can never, with propriety, be applied in s«eh w a y
5 ? J S 5 on J- tr< i l c * Hf VV111- o fw lCs hoe ns ga ir e sIs ~ t o take from their a g i n t and trustee t h e
/ S *& « « £ ° V ?^ t
T h e Executive can never s a y
l J J intentions.
Aon? the officers of the law shall discharge their duties. If it exercise t h e
power of dismission, it must be alter and for their acts, and tow remove t h e m
from tdoing
further mischief.
*
*i ' ! h e , p r . e s i < * e n t may say to one officer, you must do your duty in this o r
t h a t mode, he may so say to every other. If to a Secretary, then to a m a r -
E
21
shal, who holds his office by the same tenure. And by like exercise of authority as that which we are now considering, he may direct a marshal how he
shall execute his writs, and whom he shall summon on juries; and thus, not
our Treasury only, but our fortunes, reputations, lives, are in his hands.
W h e r e , then, where is our security?—where our protection?—where our legal
liberties?—where the trial by jury, the last and most efficient guardian of the
citi'zen in his dearest interests? It is subject to the control of power; its value
is destroyed; it is gone forever. There is no right or privilege which Uhis.
construction of the power of dismission will not reach. It changes all the
provisions of your laws into the will of one man: you have remaining only a
theory—a pretence of freedom, with the essence and practice of tyranny. You
may boast of your liberties, but they are in the hands of an individual. You
may pass laws, and define the actions of your officers, but the execution of the
laws will not be regulated by yourselves, but by the whims, the caprice, the
passions, of one man; and all your purposes may be defeated by his word.
Unite to this construction of the power of dismission the exercise of the veto,
which the constitution has granted, and human ingenuity cannot devise a
purer system of unrestrained, unlimited power. T h e Executive has swallowed ivp the Legislative functions, and there remains but the feeble barrier
of the Judiciary, which must speedily fall before it. Are the People of this
country—I ask with the earnestness which I feel — are they prepared to sanction such doctrines—to meet such results? If they are, they are already prepared and fitted for slavery. W i l l Senators sustain such principles?
If the exercise of this power be now permitted, it will be no apology to aftertimes, to posterity, that we believed the existing President would not abuse
it. It is not necessary for us to assert that he would. W e settle principles,
not with reference to any one man and his merits, but to the principles themselves, and their effect upon our institutions and liberties. Besides, who
knows who shall succeed, or the extent to which the successor may carry this
dangerous power? There is not a man on earth to whom I would confide it
in the extent now claimed by the advocates of the Executive. And if, at this
moment, there be party devotion strong enough to sustain it, then is your G o vernment already revolutionized. T h e conclusion of my own mind, and
which I desire to convey to those who, with myself, are to decide this question, is, that it is an abuse of power by the President to dismiss an officer
charged by Congress with a trust, because he will not consent to execute it
by the Executive standard of construction—because he docs not do the will
of the President, but the will of Congress; and I regard such an act, not as a
triumph over a Secretary, not as a triumph over a Bank, the mere creature of
the law, but as a triumph over the law itself; a triumph over the rights of the
People: a triumph over the constitution and laws of the land.
B u t I return to the power which the Secretary says pre-existed in him, as
Secretary, and repeat, that it could not pre-exist, in him, because there was
no absence of legal provision;
for it w a s g i v e n b y law to another officer. T h e
Treasurer, in the absence of other legal provision^ is bound " to receive and
keep" the money, and to select the "places of deposite, as a part of receiving
and keeping, l i e must keep it safely; the places must therefore be on his
responsibility. If the power existed before the 16th section of the Bank charter, it existed in the Treasurer* and not in the Secretary.
I recur again to the principle of the Secretary. H e says it is a power reserved without limitation or restriction $ of course, it is not created nor enlarged
by the Bank charter. It is now what it was before that law was passed. H e
argues, that this charter is a contract; that there is no limitation to the power
in its words; and that—what?—therefore that there is no limit to his power>
nor to the motives by which he shall be governed in exercising
it.
If this be true, as respects the Secretary and the United States' Bank, it is
true in no other instance in law, usage, or the concerns of human life. I n
construing contracts, whether general in their words or not, we confine ourselves to their objects, and do not go beyond the subject-matter to find motives for construction or action. W e are governed by the intent of the parties,
and by what they have respectively agreed to do; and our construction
22
m u s t be reasonable as regards both, and not such as may suit the convenience
or interests of only one of them. If they have confined their contract to certain specified objects, we cannot look to other objects to find reasons to govern our decisions upon these. If a party performs the comhtions of his contract, no conduct of his, in relation to other matters, can affect our decision.
T h e trustee, or umpire, who is appointed to decide upon a contract, and admits that its terms have been kept by one of the parties, and y e t decides against
him because he has acted incorrectly in matters which are not mentioned,
e x c e e d s his authority, violates his duty, disregards the injunctions ol law,
and acts dishonestly. In the instance under consideration, where there are
mutual covenants by the Government and the Bank, and the Secretary is authorised to decide in relation to one of them, there is no principle of common
l a w or common justice which will authorize him to look beyond the covenants,
out of the contract, to find motives to govern him. T h e parties meant, honor
and good faith require, that his action should be confined to the terms and
objects of the contract. H e must look to them for his motives, and the grounds
of his action. H e must make a decision, reasonable in its character, and
equally regardful of the rights and interests of both.
A n y other individual, not in qfficey might have been agreed upon by the
Government and the Bank to perform the duty of deciding upon the removal
of the deposites. Does any man imagine, will any man affirm, that he would
have been at liberty to find motives out of the charter for his decision?—to
have exercised an unlimited license, which should be regulated by feelings or
objects not embraced within the contract?—to have subjected himself and
his actions to the will of the President alone?—that his power would have
been unlimited and unrestricted, except by the wishes of the Executive, and
that they should conclude him? I cannot persuade myself that one Senator
would maintain these propositions. Then why shall they be maintained in
relation to the^Secretary of the Treasury? Is the contract changed by the
fact that he is the individual agreed upon to perform the trust? T h e logic
which shall sustain the distinction will merit admiration for its ingenuity, but
not applause for its support of law or morality. It is precisely because it is
a contract—and one, too, of a high and solemn character, aftecting the faith
and honor of the Government—that the Secretary is not permitted to take its
words alone, without regard to its objects, and infer a license of action and
decision which knows no restraint. H e was bound, by every principle of
fairness and d u t y , to look into the history of that contract; to examine the
urposes of the parties; and to limit himself by its spirit and intentions, and
y the actions of the parties in relation to its
stipulations*
T h e Secretary could not act correctly without doing this, nor can Senators
truly estimate his conduct without a similar examination. I hope the Senate,
therefore, will bear with me, while I make a brief reference to the history and
objects of this contract, with a view to just conclusions upon the Secretary's
principles, and reasons, and actions. T h e contract is the charter of the Bank
of the^ United States, created by Co?7g-res9j of its oivn unsolicited will* to accomplish certain defined and specified objects of national interest—the whole
of those objects being perfectly understood and explicitly statedIt was unsolicited by those who subsequently became interested in its provisions. N o n e of them applied for it—none asked it as a favor to them. It
was a voluntary act of the Government, so .far as they were concerned,
though not voluntary, I admit, in relation to the necessities of the Governm e n t itself. It was F O R C E D on Congress, but not by the stockholders, as the
best mode, in their opinions, of removing the evils under which the nation
w a s at that time laboring* It was suffering incalculable injuries from the
insecurity, and inequality, and unsoundness of the currency, and from the
want of a fiscal agent to aid in the financial action of the Government, and
to manage its pecuniary concerns with advantage- T o remove these evils,
some modern quackery, some combination of State banks on safety-fund
principles, or something else of that kind, might have been resorted to; but
the wise and discreet men who then filled public stations were not skilled in
E
23
s u c h devices, and they determined to create a bank with a capital competent
to the objects, and bound to exert its influence to remove the suffering, and
perform the fiscal action which was necessary. In 1 8 1 5 , t h e y formed a charter, with these objects. T h e then President, M r . M a d i s o n , returned it to
Congress, with his reasons for not approving it. H e waived his constitutional
objections, but returned the bill on the ground that it would not a n s w e r its
objects, in restoring a sound currency, and performing the duties required of
at by the Government. A t the next session, the public difficulties had i n creased to an alarming e x t e n t ; and there was no alternative, action could not
be postponed, and the present Bank was created, designed to effect two obj e c t s . 1. T h e restoration of a sound state of the currency; 2. T h e managem e n t of the concerns of the Treasury—the creation o f a fiscal agent*
To
effect these, Congress prescribed its own terms; and held out to all the people
of the Union a pledge of its faith, that if they would subscribe to the B a n k ,
and undertake the responsibilities which it imposed, the benefits of that charter should be fully and faithfully yielded to them. A l l those who chose did
subscribe; Congress offered—it is not too much to say—solicited them to u n dertake it. Shall it now be said that for slight causes—for tiny causes but a
failure to k e e p the contract on their part—that these subscribers shall be d e prived^!'their benefits?—that there is an unrestrained license in the Secretary
of the Treasury to disregard the objects of the contract, and, looking without
i t , to cheat them of their privileges whenever he pleases, and for whatever
cause he pleases? It would be worse than Punic Faith.
Congress is bound,
in honor, to prevent it, if attempted by any officer, for any cause but a violation of the agreement; and that violation established by law in the mode agreed
upon by the parties.
T h e benefits offered were, the act of incorporation, by which their joint
funds might be used for their profit; a partnership by the Government to o n e fifth of the whole amount, and relative proportion of directors; and the d e p o site of the public m o n e y , on which they could discount while it remained
there. T h e duties demanded on the other hand w e r e , to pay one and a half
million of dollars; to pay specie; restore the currency—an Herculean task;
to keep the public money safely, and furnish it for the Government wherever
it was wanted, from one extreme of the U n i o n to the other, without expense
o r loss- T h e r e was no added condition, that the owners of the stock should
surrender their rights as freemen, should be of this or that party, should s u p port this or that man for President. Congress presented no such terms t h e n ,
and it will be false to itself if it permits them to be prescribed now. T h e terms
of the contract were all explained, and I know of no honest or *just principle
which can justify a refusal by the Government to fulfil the conditions, a n d
l e a v e the public moneys in the B a n k , so long as the B a n k shall fully satisfy
all that it promised to perform as the terms on which it was to keep them.
T h e bargain was offered by the Government, made by the G o v e r n m e n t ,
and must be kept by the Government* W h e t h e r it shall d o so is of c o m paratively little moment to the personal and pecuniary interests of the s t o c k holders.
B y bad faith towards it, a number of orphans and w i d o w s , a n d
the helpless, may be injured, and their wrongs be remembered in the a c count against national injustice; still the great mass of stockholders c a n
probably bear it without much suffering. B u t this evil is s w a l l o w e d up,
and may be forgotten, in the more extensive injuries which will result from
violated faith, from disordered currency, from lost confidence, at home and
abroad.
T h e Bank was bound to the performance of certain duties; if it failed, a
r e m e d y was provided in the contract- After it had discharged them, it had
a perfect right to seek its o w n profit, by all fair and honorable and legal
m e a n s . I t was bound to do s o , on every correct principle. T h e G o v e r n m e n t itself, as a partner, had a right to expect it. It appointed its directors
to look to this object; and it was for this, and this o n l y , that they w e r e a p pointed. N o t to take care of the depositee—not to give secret information—
not to be spies and informers—not to control the whole management of t h e
24
Bank, and complain if their opinions did not prevail - T h e y represented one
of the partners^ and the sole effect of their dissatisfaction should be, if Congress concur with them, to sell their stock and cease to be partners—not to
withdraw the deposites, while they were safe, and all the duties of the Bank,
in relation to them, fully discharged. T h e interest of the nation in the stock*
and the propriety of leaving the deposites there, are constantly confounded by
the Secretary, the directors, and others: but are distinct in their nature, and
the principles applicable to them. It may be wise in the Government to sell
its stock, when it finds it to be its interest to do so; and yet every regard for
good faith may require that the deposites remain. Mismanagement—less profits than might fairly be made—might justify the one, but not the other, if the
deposites be safely and correctly used.
T h e Secretary, acting for both parties, or for Congress alone, could not pro*
perly reason otherwise on this subject than Congress should reason; and he
ought not to have confounded the stock with the deposites, in his action, as
their representative, or trustee, or umpire. Did it occur to those who passed
the law, or to those who subscribed, that the concerns of the Bank were to be
regulated by these directors, and its transactions governed or influenced by
them, further than their opinions and votes would reach? Did it occur to
them that they were to act as informers, under Executive appointment and
order P—secret spies, who were to give information to the President, without
the rest of the directors being aware of it? Sir, no man would have subscribed
his money on such terms. N o honorable mind then dreamed of such degradation of principle and action. On the contrary, Congress and the subscribers
k n e w that it would be important and necessary, at some periods, for the Government to be informed respecting its proceedings and transactions, as they
would affect the stock, the deposites, and fidelity to the terms of the charter.
T h e y therefore expressly provided modes in which this knowledge should be
acquired—by monthly and other reports, by committees of Congress, by agents
expressly appointed for that object. But they did not provide for placing the
directors under the secret orders of the Executive, to make partisan reports and
artial statements, on such facts as they could secretly obtain, without the
nowledge of the other directors* T h e r e are ample means in the power of
the Government to know every thing which is done, and which is either proper or important to be known, without their humbling the Government
directors, by turning them into agents, to discharge the lowest services
to which men can be degraded.
T h e very order to the directors to d a
this service was a trespass on the rights of the Bank—a violation of the
contract.
M r . President, has the Bank performed the conditions of the contract? It
it has, the Secretary had no right to take away the deposites, no matter now
unlimited the words by which his power is recognised- T h a t it has perlormea
thern fully, amply, there can be no just question. I am not its advocate o r
apologist. T o almost all who have ever been in its direction, I am a stranger:
with not five of them have I been on terms of intimate acquaintance* ,1
have never had a dollar from its vaults, and never but once have I been within
its walls. I have no cause for partiality towards it, and have never been
affected in my interests by it, except in the way that every other citizen of
the Union has. J am here to pass upon its rights; to do justice, and nothing
more; and to this I am bound by the highest and most solemn earthly obligations. And I cannot perceive in what it has failed to comply with its engagements to the Government. It has fulfilled them all, and more. It has paid
the million and a half of dollars into the Treasury; it has transferred the
funds of the Government wherever it has been requested, without risk, without expense. More than three hundred millions of your money has passed
through its hands, without the loss of a single dollar. It restored your currency, in four or five years, from a depreciation of from five to twenty per cent.,
until Congress, by its committees, have declared that it was as sound as that
of any country. All its duties have been performed; all the facilities which
the Government asked or expected have been furnished; so that Secretary
i
25
after Secretary, administration after administration, have bestowed upon it
the highest eulogiums. Senators have only to refer to the d o c u m e n t s published to the world by this body, to confirm these assertions.
In transferring your funds, it has saved millions to the G o v e r n m e n t ; in
restoring the currency, it has cast millions into your Treasury, B y one single
operation, you saved between six and seven millions. It received t w e l v e m i l lions of State bank notes in 1817$ and you promptly paid, by that means,
n i n e millions of debt several years before it could otherwise have been d i s charged. T h e Bank of Columhia gives an example of this process, and of
the losses to which you would have been subjected. It owed you more than
a million of dollars^ about one-half was transferred to the Bank, and i m m e diate credit given for it, and the Bank has thereby lost more than $100,000.
I t became trustee for the balance, to collect it for the joint benefit of itself and
the ^Government, T h e r e is, perhaps, $400,000 still d u e , on which you m a y
y e t lose $150,000. A n d you will lose all—if I am correctly informed, every
dollar—which was not so transferred. It was by a process similar to this, in
other cases, that this abused B a n k restored your currency, and saved your
money.
Sir, it is now, even when the Secretary assumes the discharge of his high
power, admitted by him that your money in the Bank is safe.
It is admitted
by all, even by the reader of the state paper to the cabinet, that the d e posites are safe—nay, too safe: for there is too much specie in its vaults.
W h e r e , then, is the failure in performing the covenants which can justify the
removal? Shall w e adopt the doctrine of the Secretary, and say that any
m o t i v e , any object, may justify the act, whether connected with the conditions
of the contract or not? In what an odious light this principle exhibits C o n g r e s s ! A s a mere cheat, sir! T h e amount of the argument is this, and this
the language which Congress must use, if it approve the act: It is true, w e
offered you the deposites to tempt you to enter into the contract; you a c c e p t e d ; but w e cunningly inserted a provision that our agent might deprive
y o u of them whenever he chose. *We promised you the benefit of t h e m , but
w e used such language as to permit us to trick you out of them w h e n e v e r a
Secretary could be found to order their removal. You have, it is true, kept
your contract, but that is of no importance; w e shield ourselves under the
words of the agreement, to avoid performing ours. Sir, it is m o c k e r y . T h e
approval of such reasoning would exhibit a depreciated standard of public and
private morality, which I hope does not yet exist.
B u t the Secretary does not stop here. A s if to add to the insult, he claims
the power to remove the deposites, whenever, in his j u d g m e n t , the conveixience and interests of the people require it, INT ANY D E G R E E . H e is thus c o n stituted the judge of the interests and convenience of the people, and the
slightest reason is to justify him in violating the charter, when the faith and
honor of the Government may be implicated by the act. B y what rule is he
to judge? T h e convenience of the people! It is the stale apology to which
tyrants and usurpers have always resorted for the violation of the requirem e n t s and sanctions of law. T h e Secretary says the Bank cannot complain*
N o w , as there are two parties to the contract, if the Bank cannot complain,
let the Secretary do what he pleases, ha* Congress any right to complain?
I f one party must be silent, must not ihe other also? And did the B a n k
believe that, by its charter, such power was granted to the Secretary? D i d
the Senator* then a member of the other H o u s e , who drew this section, believe
it? [ M r . W K B S T E R . N O — c e r t a i n l y n o t . ] Did any of those Senators, then
m e m b e r s of that body, who voted for the act, believe it? N o t one. T h e y all
regarded it as a solemn contract, to be kept, like all other contracts, in good
faith by one party as well as by the other; and never imagined that the S e c retary, under the general words u s e d , could violate it at will.
Sir, it is necessary that Congress should look to their legislative rights.
A
power has been claimed over the whole T r e a s u r y of the Union. T h e control
of that Treasury is one of the highest legislative powers granted by the people
to Congress. It cannot, must not, be construed a w a y . T h e r e are, i n d e e d .
26
those who b e l i e v e that a surrender of this control would be utterly u n c o n s t i tutional and v o i d . T h e argument, it will be observed, stands t h u s : B y t h e
contract, the Secretary has unrestricted power to r e m o v e , or not to r e m o v e ,
the depositee. Congress c a n n o t act until he has a c t e d . T h e E x e c u t i v e has a
right to control the S e c r e t a r y ; and thus Congress has surrendered its legislat i v e power, and cannot e x e r c i s e it, e x c e p t at the will of the Secretary or
E x e c u t i v e . N o w , sir, I have by me an opinion, given in relation to a grant
by a State L e g i s l a t u r e of e x c l u s i v e powers to a c o m p a n y , to construct railroads within defined limits, and to prevent competition: an extract from w h i c h
I will read, although I do not c o n c u r in the c o n c l u s i o n s of the writer.
" I t m u s t be a c k n o w l e d g e d that there would appear to be high authority for
*' regarding this power as an i n c i d e n t to the power of legislation. In the a c t
"
of C o n g r e s s , incorporating the B a n k of the U n i t e d S t a t e s , there is an agreeu
m
e n t , o n the part of the U n i t e d States, not to authorize any other bank o u t
44
of the D i s t r i c t of Columbia, during the e x i s t e n c e of that charter; and similar
" pledges m a y be found in similar cases, in the legislation of different S t a t e s ,
" where the constitution has not e x p r e s s l y conferred on the Legislature t h e
" power
to m a k e t h e m .
fcfc
B u t , with every respect for the distinguished men w h o have sanctioned
" such legislation in the General G o v e r n m e n t , or in the S t a t e s , I cannot think
44
that a legislative b o d y , holding a limited authority under a written c o n s t i t u 44
tion, c a n , by contract or otherwise, limit the legislative power of their s u c cessors. T h e power which the constitution gives to the legislative b o d y
4t
must a l w a y s exist in that body until it is altered by the people, and cannot
44
be restricted by a mere legislative act. If they can deprive their successors
ot the power of chartering companies of a particular description, or in particular p l a c e s , it is obvious that, upon the same principle, they might deprive
t h e m ot the power of chartering any corporations for any purpose whate v e r ; and it they might, by contract or otherwise, deprive their successors
or this legislative power, they could surrender any other legislative power
^ whatever in the same manner, and bind the State forever to submit to it.
^ I he e x i s t e n c e ot such a power, in a representative body, has no foundation
in reason or m public c o n v e n i e n c e , and is inconsistent with the principles
upon
which all our political institutions are founded. For if a legislative
tt r \y ! n f*y.tl*us restrict the power of its s u c c e s s o r s , a single improvident a c t
may entail lasting and incurable evil on the people of a State.
4t °* legislation
" i v m ? y c o m p e I them to forego the advantages which their local situation
^ a t t o r d s , and prevent them from using the means necessary to promote the
prosperity and happiness of the c o m m u n i t y . "
1 his extract was not written by R . B . T a n e y , Secretary of the T r e a s u r y ,
but
by R. B . T a n e y , A t t o r n e y General of the U n i t e d S u i t e s , within t w e n t y on
? ~ J a X ? of the date of the order for the removal of the depositesM r . P r e s i d e n t , the S e c r e t a r y , under the charter of the Bank, holds a m u tually delegated trust, which he is to e x e c u t e , according to the meaning and
objects ot the contract, for the benefit of both parties, and upon principles
which are applicable to all officers and to all official duties, to all powers and
to e v e r y trust. T h e original power of the legislative body still remains the
same,
I he sole intention was to create an agent, w h i c h , in the absence of
C o n g r e s s , might guard against danger. B u t neither Congress nor the S e c r e tarvTias
a rigfit to violate the conditions of the charter. Congress would not,
%UJi*\lS O U r ? u t y t o arrest the Secretary in his attempt to ^ o it. B u t the
f n . r n ^ r e n d e a r T *° s " 8 t a i " S1* c < ? u l T b ^ a r e s ° r t to precedent, to usage,
a n a p i a c t i c e . I have not y e t had the benefit, on this point, which would
arise from reading his a n s w e r to the resolution offered by the Senator from
K e n t u c k y , j u s t printed and laid upon our tables, and may not have all the
light which that answer will afford. B u t I present to the S e n a t e what I believe to be the truth in relation to this subject. T h e Secretary offers o n e , and
o n l y o n e , authority, and that is the postscript
of a letter from M r . Crawford
to the M e c h a n i c s ' B a n k of N e w York, of the 13/A February,,
1817, as proof o f
t h e usage and practice of the D e p a r t m e n t . I have not been able to find, i n
27
the history of that postscript, enough to show that even one Secretary of the
Treasury has entertained the opinion expressed by the present, much less to
justify or apologixe for him on the ground of usage.
T h e Bank was chartered on the 20th April, 1816* T h e subscriptions were
made in July, 1816, and it w e n t into operation in January, 1817. Before the
subscriptions were made, and before the close of the session at which the
charter was granted, and also before the charter went into operation, while
Congress had full control over the subject, a joint resolution, with the force
of Jaw, was passed, requiring and directing the Secretary to adopt measures
to cause, as soon as might be, all duties, taxes, debts, & c , payable to the
U n i t e d States, to be collected and paid, in legal currency, Treasury n o t e s ,
notes of the Bank of the United States, or notes of banks payable in legal
currency, and fixing the 20th of February then next (1817) as the day after
which the payments.ought to be so made. T h e object of this resolution was the
restoration of specie currency; and Mr. Crawford was directed, as a means
o f restoring it, to require p a y m e n t s to be made in the mode prescribed. U n d e r
this resolution a large correspondence took place between the Secretary and
the State banks. T h e y had resolved to endeavor to restore it by the 1st of
J u l y following; it was his duty and desire to restore it by the 50th February.
On the:26th D e c e m b e r , I81G, he addressed a circular letter to them, which
is a guide to all the subsequent correspondence. T h i s letter, a copy of which
is before m e , states that the Bank of the United States would go into operation on the' 1st of January, and be ready on that day to receive the public
m o n e y s deposited in the State banks; that, before he d e c i d e s on handing
over these deposites, he wishes to know it the State banks will adhere to
their determination not to resume specie payments until the 1st of J u l y , I f
they d o , he will promptly order the deposites to be paid over; but if they
resume by the 20th February, the day fixed by Congress, no part of the d e p o sites shall be transferred, unless to sustain the .Bank of the U n i t e d States
from any pressure attempted to be made upon it. A n d he closes by stating,
*4 that there exists no reason to suspect that the resolution of the last session
" o f Congress, relative to the collection of the revenue, after the [20th of
** February next, will be rescinded.* 7 It will be perceived, at once, p that this
circular relates to the restoration of specie payments on the 20th of February;
that it is written under, and by virtue of, the resolution of the 30th of A p r i l ,
1816, and not under the charter of the Bank, which had not then gone into
operation; that the whole authority for the letter was the power granted and
the duty enjoined by the resolution. I t will also be perceived that it relates
to the money then in deposite in the State banks, and not to m o n e y which
had been deposited in the Bank of the United States, and which was to be
withdrawn from it. T o these deposites, the B a n k , when it w e n t into operat i o n , made claim, and requested the Secretary to transfer them* H e admitted
that there was justice in the claim, but as it was not absolutely required by
l a w that he should transfer them, and as it was important to use them in the
b e s t mode to enable the banks to resume specie payments, he d e c l i n e d ; and
it is to these deposites that I understand the postscript of Mr. Crawford to
apply. T h e M e c h a n i c s ' B a n k was one of those which found difficulty in
breaking the arrangement for the 1st J u l y , and wrote to the Secretary on the
0th January, 1817, soon after the date of the circular, and in answer to that
circular, stating the grounds on which they could not comply with the proposition of the Secretary to resume on the 20th February, and adding, if the
resolution should not be rescinded or altered by Congress, they would reconsider their decision. It was in relation5 to the propositions and difficulties
suggested by this letter of the M e c h a n i c s B a n k , and to the propositions which
w e r e in debate between the Bank of the United States, the State b a n k s , and
the Secretary, about the transfer of the deposites previously made in the State
b a n k s , that the letter and postscript of M r . Crawford, of the 13th February,
1817, was written. T h e y had no relation to deposites made in the Bank o f
the United S t a t e s , nor do they furnish any assertion of authority by M r .
Crawford to touch deposites accruing after the charter w e n t into operation.
2S
T h e body of his l e t t e r expressly refers to the c i r c u l a r ; and the assertion is, of
a r i g h t to transfer those deposites to equalixe t h e benefits, in the efforts m a k i n g
by the b a n k s to restore specie p a y m e n t s . I t is too explicit to have been misu n d e r s t o o d by the S e c r e t a r y , if Fie had examined it with proper caution, a n d
a d e q u a t e knowledge of the operations of the T r e a s u r y at that time. T h e
l e t t e r s and d o c u m e n t s to which I have referred may be found by Senators
in d o c u m e n t 140, being an a n s w e r of Mr, Crawforcl to a resolution of the
H o u s e of R e p r e s e n t a t i v e s of the 8th M a y , 1822; a n d I think I may affirm,
with confidence, that the postscript relied upon does not sustain the S e c r e t a r y
in the course which he has adopted* W h e t h e r he has been able to find a n y
other sayings of M r . C r a w f o r d , or of some other S e c r e t a r y , which will give
plausibility to his assumption of power, w e shall discover when we read his
r e c e n t c o m m u n i c a t i o n . I n the mean time I refer Senators to M r . C r a w f o r d ' s
l e t t e r s of 28th F e b r u a r y , 1817, and 17th M a r c h , 1817, and his report of the 37th.
F e b r u a r y , 18-23, giving an account of all the transfers m a d e by his directions
from the d a t e of the .charter; and I think the conclusion from them will be
found to be irresistible, that he did not claim even to select the b a n k s inwhich deposites w e r e m a d e ; and t h a t his transfers w e r e cither from S t a t e
b a n k s to State b a n k s , or of old deposites^ a n d , above all, that he did not
claim the unlimited power which has been recently exercised*
F R I D A Y , JANUARY 10,
1834.
M r . S O U T H A R D c o n t i n u e d his r e m a r k s as follows:
sard for the
" remarks.
,.
i
-i
- •
.,, - . u „ l v Wv w i l i r m e d by
his a n s w e r to the charges made against him in 1822 and ' 2 3 , an occasion on
which he acquired reputation by the ability with which he defended himself
from
a vigorous assault upnn'his integrity as a man and an officer. I n his lett r
P °i*f t h M a y * 1824, to the c o m m i t t e e , he states that he has selected some of
ber, 1819, and is full and explicit. T h r e e of these b a n k s , at Chilicothe, Cincinnati, and Louisville, were in places where t h e r e were b r a n c h e s .
He
omitted to report the fact to Congress through i n a d v e r t e n c e ; but he states that
"
'
.
© .
.- * - _
of the charier to
_
,
._,,„, _
Webster, Ran0 „
te__,
dolph, Taylor, M c A r t h u r , and O w e n s , do not disapprove the act ot the Sec r e t a r y , or his reasons, but justify his c o n d u c t ; and they state that a practice,
which had sometimes prevailed to d i r e c t the operations of the T r e a s u r y " / o
J the support of different moneyed associations^ whose affairs required support* to defeat combination
against them^ and preserve eqtnlibrium^
was
.< ?° Iefnl employment
of the public funds.
It toas nothing bid a
gratuitozes Loan*
T h e present S e c r e t a r y will derive little support from this history. B u t
should it appear that M r . Crawford did e n t e r t a i n , or t h a t , in one or a fewinstances he had acted on, that opinion, in the difficult c i r c u m s t a n c e s in which
h e was compelled to a r r a n g e the relations of the financial d e p a r t m e n t with
the national B a n k , and aid in restoring a sound c u r r e n c y , u n d e r the orders
ot C o n g r e s s , I am not willing to receive such opinion and acts as conclusive,
in the construction of the charter. A s the opinion and acts of M r . Crawford
I should respect them, but not a d m i t that they were obligatory. T h e general
practice of the G o v e r n m e n t since 1816., the obvious principles a p p l i e d ' 6 to
t h e construction of the charter, and the opinions ot Congress in various forms,
a r e m u c h more persuasive upon m y j u d g m e n t . A l l these have been violated
29
a n d disregarded bv the Secretary- H e has applied a c c i d e n t a l and temporary
arrangements, and an opinion in the postscript to a letter, to a p o w e r g r a n t e d ,
i f it exist at a l l , by contract* and w h i c h reaches the control of the zvhole
Treasury of the Union* at all times.
T h e S e c r e t a r y relies on slight e v i d e n c e
w h e n it c o n c u r s with his o w n v i e w s and p r i n c i p l e s , but is not quite so prompt
to regard higher e v i d e n c e w h e n it is a d v e r s e to them,
It w o u l d have been
w e l l if he had manifested equal respect for the abundant proof of the c o n s t i tutionality of the B a n k , a n d the opinion of C o n g r e s s as to the safety of the
<leposites. T h e S e n a t e has not reasoned heretofore as the S e c r e t a r y reasons.
T h e C o m m i t t e e of F i n a n c e in the S e n a t e , in 1829, had several resolutions referred to t h e m , the object of one of w h i c h w a s , to compel the B a n k to pay
sorne compensation for the d e p o s i t e s ; and the means of compulsion_ w e r e the
withdrawal
of the deposites by the S e c r e t a r y , T h e y reported that it w a s ine x p e d i e n t to a c t o n these r e s o l u t i o n s ; and thus reason: *fc T h e ICth s e c t i o n
"
e n a c t s , that the d e p o s i t e s o f the m o n e y o f the U n i t e d S t a t e s shall be m a d e
41
in the Bank and its branches, u n l e s s the S e c r e t a r y of the T r e a s u r y shall
4
*
at any time o t h e r w i s e order or d i r e c t : in which case he shall lay before
4fr
Congress the reason of s u c h order or direction.
I t is admitted* that the first
"44 branch of the section is c o n c l u s i v e , as to the right of the B a n k to the d e p o sites without charge to it; but it is argued that the s e c o n d part qualifies
"44 that right, and that the authority g i v e n to the S e c r e t a r y to w i t h d r a w the d e posites, g i v e s him power to do so in case the B a n k should refuse to g i v e fur4
*
ther
compensation for the use of those deposites- If that had been the object,
44
the w o r d s would have b e e n , in the opinion of the c o m m i t t e e , explicit
as to
" a point so very material.
T h e c o m m i t t e e s e e , in the power given to the S e **4 c r e t a r y , a d i s c r e e t p r e c a u t i o n ; and the w o r d s , they believe, c o n v e y o n l y the
* idea, that if, at any time, the S e c r e t a r y shall be of opinion that there tail/ be
44
a danger of loss to the United States* by its money remaining- in the
vaults
46
of
the
jBaruc*
he
may
remove
it
for
safely*
and
report
his
reasons
to
Congress.
46
JVb other construction
can* in the opinion of the committee* be given to that
"part
of
the
lGth
section.
T h e p o w e r to w i t h d r a w the funds by the S e c r e 44
tary has n e v e r been d e e m e d n e c e s s a r y ; and it m a y w e l l be doubted w h e t h e r
44
C o n g r e s s can interfere, in any w a y , until he shall act u n d e r the p o w e r .
The
+44 *idea that Congress
have given* by inference* to the Secretary
of the
Treasury* a power to exact money from the Bank by a threat of
withdrawing
** the deposites,
cannot be entertained
by the
committee*"
O f this report one thousand copies w e r e printed for c i r c u l a t i o n .
I f C o n g r e s s have not g i v e n to the S e c r e t a r y the power to e x a c t c o m p e n s a tion for the use of the d e p o s i t e s , have they g i v e n the more odious p o w e r of
depriving the B a n k of the w h o l e d e p o s i t e s , w h e n e v e r a S e c r e t a r y can be
found d u c t i l e enough to be c o m m a n d e d to b e l i e v e that the interest and convenience of the People require his high prerogative protection? T h e c o m m i t t e e affirm that the power w a s g i v e n to s e c u r e the safety of the money;
and
t h a t c o m m i t t e e consisted of M r . S M I T H , of M a r y l a n d , Air. M C L A N E , M r .
S M I T H , of South Carolina, M r . B R A N C H , M r . S I L S B E E .
T h e same committ e e again, upon another and d i s t i n c t reference, m a d e the same report on the
12th of J a n u a r y , 1832. I t then consisted of M e s s r s , S M I T H , T Y L E R , M A R C V ,
SiLSHKE, and J O H X S T O X . In each c o m m i t t e e there w a s a majority of the
friends of the present E x e c u t i v e . S i r , it is but a short period from J a n u a r y ,
1833, to S e p t e m b e r , 1833. I find no e v i d e n c e that a n y one of the S e n a t e then
^uesfcioned the s o u n d n e s s of the opinion of the c o m m i t t e e , and shall be glad
t o learn, in the progress of ttiis d i s c u s s i o n , how far there has b e e n a c h a n g e of
opinion here or e l s e w h e r e , and on what g r o u n d s .
B u t the right to transfer the d e p o s i t e s is urged as an independent
ground
on w h i c h the power of the S e c r e t a r y is to be v i n d i c a t e d . I t will be a suffic i e n t a n s w e r to this a r g u m e n t fet> refer to the 15th and I6th s e c t i o n s of the
c h a r t e r . T h e 15th d e c l a r e s that, ** wl*en«ver required by the S e c r e t a r y o f the
** T r e a s u r y , the said corporation shall g i v e the n e c e s s a r y facilities for trans4
* ferring the public f u n d s from place to p l a c e , within the U n i t e d S t a t e s a n d
*A the T e r r i t o r i e s thereof, a n 4 * o r distributing the same in p a y m e n t of the p u b -
30
4
* lie creditors, without charging c o m m i s s i o n s or claiming a l l o w a n c e o n a c c o u n t
" of difference of e x c h a n g e . " A n d the lGth requires the public money to b e
deposited in the Bank and its branches, w h e r e there are a n y . N o w it is o b vious that the duty o f the Secretary is to require the transfers; that of t h e
B a n k to make them. H e is to direct the place where the money is w a n t e d
for u s e ; the Bank is to be at the e x p e n s e of putting it there. T h e object o f
these transfers is also d e s i g n a t e d — t h e p a y m e n t of the public creditors.
The
transfer and the p a y m e n t are embraced in the same provision, and rest on the
same condition—both to be directed by the S e c r e t a r y , both to be done b y
the Bank; and the power of the S e c r e t a r y might as iairly be inferred from
o n e as from the other. T o infer the p o w e r to deprive the Bank of the w h o l e
benefit of the d e p o s i t e s , at w i l l , because there is a power to require transfers
for distribution in pay merit of d e b t s , is but another e v i d e n c e from what slight
grounds p o w e r can be inferred by those who desire to exercise it.
T h e power i n t e n d e d to be given to the Secretary w a s , perhaps, s a l u t a r v j
and there m a y , perhaps, have been some want of caution and precision in t h e
w o r d i n g of it; but if this be s o , which I do not a d m i t , an ample apology for
C o n g r e s s is found in the fact, that no one then imagined such principles ot
construction as have, in these reforming d a v s , been discovered and approvedT h e m e n who had held the office before that time, H a m i l t o n , W o l c o t t , D e x t e r *
Gallatin, C a m p b e l l , Dallas* although they were versed in official c o n c e r n s ,
and the length of their service outran that of four who have recently followed
t h e m , had not exhibited such skill in construing their powers, and those of t h e
E x e c u t i v e , as to put C o n g r e s s effectually upon its guard.
B u t , sir, if the power be conferred, and was reserved, what was it? 1. T o
order the deposites to be made. T h i s m u s t , from its nature, be directed, not
to the B a n k , but to inferior ofticers and debtors—where to pay or place the
m o n e y ; and must be prospective, antl relate to m o n e y s to be subsequently
acquired, 2. T h e transfer—which
relates not to change of possession in the
B a n k , but to a change of the place where the Bank shall hold it. N e i t h e r
amounts to nor authorises the withdrawal or taking m o n e y out of the Treasury*
T h i s is a totally different act, and governed by different l a w s and rules- T h e
constitution and the law governing it have been read to the Senate- I have
n o a n x i e t y about the definition of the word treasury.
T h a t of the Senator
from K e n t u c k y is correct. It is that place, one or m a n y , where the money is
put, and is to remain until d r a w n out according to the provisions of law.
la
this light it is regarded in all our state papers and d o c u m e n t s , in the m e s sages of the P r e s i d e n t , the reports of the S e c r e t a r y , the proceedings of C o n gress, and the l a w s which are e n a c t e d .
W h e n e v e r m o n e y is in the hands of the G o v e r n m e n t , has been paid to i t ,
and not paid a w a y , it is said to be in the Treasury,
Before the Bank w a s
formed there w e r e more than ninety State banks in which the money w a s
p l a c e d , and these were all one Treasury;
and withdrawing money from any
o n e of them was taking it out of the T r e a s u r y : and if taken out without the
iorinsof law, if not paid on legal warrants, it was a violation of l a w ; and so
it is since the B a n k was created. T h a t is the T r e a s u r y now in the same w a y
that the State banks were before; and if the Secretary withdraws one dollar
ot it^wrth or without the K x e c u t i v e sanction, it is a breach of the law. T h e
rmmences
M hat it then is I will not delay the S e n a t e by examining further.
U n d e r these v i e w s M r . President, ot the acts and principles of the S c c i e t a r y , I am compelled to dissent horn him. H e has, in m y opinion, done
a c t s tor which he had no I c m I authority. H i s order to place the future rec e i p t s ol the nation in the s e l e c t e d banks, his order to the disbursing agents
to place their money in the same banks, and his taking the m o n e y , already in
the T r e a s u r y , out of ir, to loan to his favored banks, are all violations ot # the
law—-gross violations—for which I can see no satisfactory e x c u s e , in any j u s t
principles under our system of G o v e r n m e n t .
31
I now ask attention to his reasons for the r e m o v a l . T h e y s e e m to be c o m posed of mistaken facts and false principles.
H i s reasons are of t w o kinds* 1* R e l a t i n g to t h e time* 2. T o the m i s c o n d u c t of the B a n k of t h e U n i t e d S t a t e s . U n d e r the first, he argues that
t h e public general i n t e r e s t required i t , w i t h o u t the d e l a y of s i x t y d a y s to
c o n s u l t Congress.
U n d e r t h e s e c o n d , that it w a s d e m a n d e d as a p e n a l t y on
the B a n k ,
. .
I n relation to the tirne^ he a t t e m p t s to prove four propositions.
£Report,
page 1 1 . ]
T h e first i s , that it w a s the d u t y of the Department
not to act upon the
assumption that C o n g r e s s w o u l d change the l a w , but to regulate its c o n d u c t
on the principle that the charter w o u l d expire in 1836. H i s reasoning in its
support is in pages 3 and 4. N o w , sir, I a d m i t freely that the S e c r e t a r y , like
all other officers, was bound to a c t u n d e r the law, as he found i t — a s it e x isted* H e had no right to s p e c u l a t e o n e w a y or the other. H e w a s to perform
his d u t y , and not p r e s u m e that C o n g r e s s w o u l d n o t , any m o r e than that C o n g r e s s w o u l d ; and this i s e s p e c i a l l y true, a s C o n g r e s s w a s about to m e e t , to
w h o m the legislative p o w e r on the subject b e l o n g e d .
B u t w h y w o u l d he not anticipate a r e n e w a l of the charter? B e c a u s e , 1,
J u s t i c e did not require it. 2- P u b l i c opinion forbade it. J u s t i c e did not require it, because it was an exclusive
privilege^
at the expense of the rest of
the community,
enjoyed for t w e n t y years I I s this so? "Was it so in the origin
o f the charter? K v e r y c i t i z e n of the U n i o n w a s at liberty to b e c o m e a partner
in the c o n c e r n , on the t e r m s offered by C o n g r e s s . N o n e w e r e prohibited;
n o n e e x c l u d e d . T h o s e w h o did not choose to a c c e p t t h e m , have no right to
complain that others, w h o d i d , have d e r i v e d benefit from t h e m . I a d m i t ,
with the S e c r e t a r y , that the present s t o c k h o l d e r s have no peculiar right to
peculiar privileges, and m a y not claim a r e n e w a l , e x c e p t so far as the i n t e r e s t
of the G o v e r n m e n t may be promoted by having a B a n k , and it m a y think prop e r to r e n e w this, it it have faithfully performed its d u t y . B u t if the charter
w e r e not r e n e w e d , and a n e w o n e w e r e formed, the s a m e state of t h i n g s
w o u l d e x i s t , as n o w d o e s , in relation to this point, and m u s t a l w a y s e x i s t ,
w h i l e there is a Bank* It is an objection, not so m u c h to the r e n e w a l of this
charter, as to the e x i s t e n c e of a n y bank. T h e report of the c o m m i t t e e of t h e
H o u s e in February, 1832, p l a c e s this matter in its true light. B u t , sir, w h o
c o n s t i t u t e d the S e c r e t a r y the j u d g e of this question? W h o g a v e him the right
to discharge the d u t i e s of C o n g r e s s , and d e c i d e this matter? W h a t authority
h a s he to say that it is or is not w i s e to create a monopoly? to grant e x c l u s i v e
privileges? that C o n g r e s s ought or ought not to r e n e w the charter? If s u c h
n o t i o n s are to prevail, it might be well tor us to t a k e the a d v i c e which partisans
h a v e g i v e n — g o home and let matters be better managed without us than with u s .
B u t has this B a n k been an oppression to the c o m m u n i t y ? I repeat, sir, that
i t is not so. You have s a v e d , at a l o w e s t i m a t e , from forty to s i x t y millions
b y its operations. T h e transactions of y o u r financial c o n c e r n s have c o s t y o u
n o t h i n g ; three hundred m i l l i o n s have been r e c e i v e d , transferred, paid, without the loss of a dollar; your c u r r e n c y rendered the very best ever knoivn in
any nation in modem timesz y o u r c o n t r a c t s have been facilitated; the i n t e r c o u r s e of y o u r c i t i z e n s , in all the relations of life and business, promoted a n d
r e n d e r e d easy and profitable; the very bonds of y o u r U n i o n s t r e n g t h e n e d , by
e n a b l i n g the people in the e x t r e m e s of the nation to transact their b u s i n e s s
w i t h each other, with a l m o s t as m u c h facility as if they w e r e e m b r a c e d w i t h i n
t h e narrowest c o m p a s s . S i r , I do not a l l u d e to these things as urging the
m e r i t s of the B a n k , nor with a n y v i e w to a n y question hereafter to arise, as to
i t s recharter. I t has o n l y the merit ( a n d it is c e r t a i n l y not a small o n e ) o f
h a v i n g , faithfully to the G o v e r n m e n t and its o w n s t o c k h o l d e r s , discharged its
d u t i e s . T h e credit is d u e to the w i s e m e n w h o formed the B a n k as a tit i n s t r u m e n t of benefit, both to the G o v e r n m e n t and people* B u t t h e s e things
s h o w that the want of j u s t i c e and the e x p e n s e to the rest of the c o m m u n i t y
w a s at least a questionable g r o u n d for the c o n f i d e n c e of the S e c r e t a r y in the
e x e r c i s e oi his discretion.
32
But he could not anticipate the renewal, because he says, " I am firmly
" persuaded that tlie law which created this corporation, in many of its provisions, is not warranted by the constitution; and that the existence of such
* a powerful moneyed monopoly is dangerous to the liberties of the people,
" and to the purity of our political institutions." W e are left to our guesses
as to the grounds of his firm persuasion. I shall not stop to inquire either
when this firm persuasion had its origin, whether long since, when his political
and constitutional opinions were formed, or within the last two or three
years, within which tune many of our citizens have felt much new and overwhelming conviction about the unconstitutionality of the Bank, and found
their xeal on this topic so much augmented, and have laid their original opinions as a fit ottering at the footstool of power and patronage. Nor, sir, shall
1 now inquire into the correctness of the opinion expressed. The question
before us is not whether Congress have constitutional power ^o create this or
any other Bunk, nor whether it is dangerous to liberty. It has been created.
It is in existence. It is the law of the land. But I do inquire by what
right an officer, created by law, and bound to discharge duties under any of
our laws, assumes the authority to question their constitutionality, or to found
his actions upon his belief that they are invalid ami void. He is directed to
perform a duty under a law; engages in its performance; and then finds a
motive for his conduct in the assertion that it is not binding upon him. S i r ,
to what will not this lead? Might not the Secretary, by the same rule, have
said that the charter, the contract on which he relies as allowing to him u n restricted leisure of motive and action, was void, and therefore he disregarded
it altogether, and removed the deposites because they were unconstitutionally
placed where they were? It would have been equally proper, and would have
saved him some trouble of argument.
B u t he forgot, sir, that he was exercising a power under this very law. I f
unconstitutional, how couid it confer any power on him, or justify any action
which he performed, however unlimited its words?
If the Secretary may act and reason thus, every other officer, high and low,
may do the same; each may deny the validity of the law which binds him to
do what he is unwilling to do. Each may, like the Secretary, assume the
power of Congress, and render unnecessary the existence of the judicial tribunals. T h e President had better look to it; he may find his subordinates
somewhat troublesome to him, with such notions- Or, are only those to act
4fc
fc
_ „ , _
.
iiy
the most fortunate, but the only fortunate portions of our financial history.
T h e first Congress, enlightened by the counsels of Washington and H a m i l ton, ami others who had profited by the light elicited when our constitution
\vas formed, had no such firm persuasion, but created a Bank. Another Congress refused to propose amendments to the constitution, in order to obtain
the power, principally because it already existed. Three others have passed
i. i-.cj y c u uL7u..u u. c auuuu of my voice. T h e Legislatures of more than
<>ne,haU ol all the States have approved the exercise of the power. Every
president, except the present, has done the same: for even Mr. Jefterson put
his signature to one or more laws to create branches, and facilitate the action
of the hist Bank- H e did not, at least, while acting under the law, deny
the constitutionality of the law, and assume that as a motive for his conduct.
Every Secretary of the Treasury, from 1789 to 1833—Hamilton, W o l c o t t ,
Dexter, Gallatin, Campbell, Dallas, Crawford, Ruwlu Ingham, McLane, ( o n e
of the present cabinet)—all admitted, not merely its constitutionality, but ita
33
necessity to the finances of the country. T h e judiciaries of most of the States
have admitted it; and, above all, it has been sustained by that elevated tribunal which is the ultimate judge, whether legislation be constitutional or n o t elevated, sir, not more by its constitutional powers and dignity, than by the
learning, the purity, the firmness, the patriotic spirit, which have guided its
deliberations and controlled its judgments, securing to it the profound homage
of this and other nations.
Sir, after all this, is it not a process of unusual modesty, in a subordinate
and temporary officer of your Government, to act, in such a case, on hisjftrm
persuasion that all these have been in error, and that a future Congress could
cot entertain opinions which have been thus sanctioned and illustrated.
W e are assured, by the Secretary, that public opinion has settled this question, and that this settlement is now matter of history.
T h i s megrim ot the
brain has crept into the belief of more than one in high places- It is not perhaps wonderful that it should be fixed immovably in one spot; but that others
should entertain it, and act upon it, as if it were law, to govern their actions
when executing law, is not a little surprising. W h a t is the proof which the
Secretary refers tor That the issue respecting the recharter and future e x istence^ of the Bunk was tendered voluntarily by the Bank, and accepted;
that pains were taken to '* frame the issue," and that it was tried by the P r e sidential election. Is this true? Have the people of this U n i o n , in the performance of their highest and most sacred function, that of election, d e s c e n d ed to the degradation of trying an issue between the Bank and a candidate
for the Presidency? Have they made all the great questions, hrising out of
their constitution, and the policy of the Government, subservient to such an
issue? forgetting them all, and deciding this alone? For myself, I admit no
such degradation. W h e n did the Bank frame the issue with so much care?
1 know of nothing which it has done, and nothing is alleged but the expenditures for printing, which are complained of; and its application for the re*
newal of its charter. T h e former were certainly not very effective means of
either framing or trying the issue. I f Senators will examine the accounts,
they will find ©179 91 paid for newspapers; not as much, for the time, as w e
pay for the papers of six members of Congress; not enough for a daily paper
from the States where its branches are located* T h e y will find, I believe,
$6,453 29 for pamphlets of the highest merit, fit for the instruction of all
classes, and about $9,818 21 for reviews and addresses. This, sir, is a small
sum with which to bribe a whole people, newspaper editors and all, in an
election. B u t , sir, the answer is, that these expenditures were made with the
rofessed, and, I see no reason to doubt, the sincere object of defending the
lank from continued, vehement, persecuting, and injurious assaults upon it;
by which the value of its stock was depreciated, and the owners of that stock
injured. A n estimate of the injury may be made by observing the loss which
the public treasury and the people of the United States have suffered* W h e n
the President and his friends first made their attack upon it, your seven millions of stock was worth ei^ht and a half millions. It stood somewhere bet w e e n 125 and 130, and the first assault reduced it so much that you lost by
it $750,000. Subsequent assaults have continued the process, and you have
now lost a million- If they are further continued it will be reduced to par,
and you will lose one and a half millions. Fortunately you cannot lose more;
neither official vengeance nor private malignity can reduce it below par* and
i>ankrupt it* It is now able to pay, and must continue able to pay, its stock* in
lull count. If, sir, when these assaults were made, the Bank had been perf e c t l y silent—stood still—made no effort to protect the property which it field
<as trustee for others, it would have failed to perform its duty. In private life
such an agent would have been branded as faithless and unjust. A n y State
bank, thus negligent, would have lost its credit and subjected itself to scorn
and ruin. In what does the Bank of the United States differ from them?
T h e y m e equally trustees for others* There was an equal obligation on thexn
to protect their rights, and disprove the false assumptions on which the assaults rested-
B
34
44
But they made a voluntary and premature application for a renewal of t h e i r
" c h a r t e r . " If this be true, does it prove any thing more than that they m i s judged as to time, and were in too great haste to be assured of their fate?
JHow did they know? W h o had told them that this would form an issue b e tween them and the President? Had he? N o , sir. H e had not. U p to that
hour his final decision in regard to the Bank was matter of speculation o n l y ;
and at least one-half of his friends not merely asserted that he would approve
a recharter, but they actually electioneered for him on that around. A c o n trary allegation was charged as a political finesse of the adversaries
qf the
President.
It was so in the middle, the west, and the north of the U n i o n —
every where, except where the charter was considered unconstitutional. A n d ,
s u \ they wer» right. In his message of December, '29, he wses this language:
**• t h e charter of the Bank of the United States expires in 1836, and Us stock*
**
holders will, most probably, apply for a renewal
of their privileges* In o r d e r
44
to avoid the evils resulting fro7n precipitancyr,
in a measure involving s u c h
44
important principles, and such deep pecuniary interests, I feel that. I c a n *
**
not, injustice
to the parties interested* TOO SOON present it to the
deliberate
44
consideration
of the Legislature
and the people.
Both the constitutionality
"
a n d the expediency of the law creating the B a n k , are tvell questioned by a
44
large portion of our f e l l o w - c i t i z e n s , and it must be admitted
by all that it
" has failed in the great end of establishing- a uniform and sound currency***
H e then proceeds to suggest the propriety of considering whether a bank
may not be founded on the credit and revenues of the Government*
It i s
unnecessary to speak of the suggestions respecting the currency and a n e w
s c h e m e for a bank* It so happened that the first was flatly denied, and w a s
certainly incorrect; and the latter scouted, by even his own devoted friends,
in and out of Congress. T h e suggestions were such, that none, or almost
n o n e , were found so brave, or so pliable, as to sustain them. There majr
have'been many conversions since, for aught that I k n o w . T h e r e are v e r y
operative means of producing conversions of opinions in these our days. But,
sir, I put it to the candor of every man, if the President did not then say T
that it was time the question of rccharter should be considered:—if
he did not
tell the Bank so, as well as Congress and the people:—if he did not invite
the Bank to have it s e t t l e d , so far as its settlement depended upon it* I t
could not TOO SOON be presented to the consideration of the Legislature.
Precipitancy was to be avoided. If the B a n k , on reading that message* *****
sent a memorial to Congress, would it not have been a compliance with t h e
expressed wishes of the President? W o u l d any man then have thought
i t criminal?—or an intentional formation of an issue between it and the P r e sident? Subsequent events have induced its enemies to give it this aspectT h e Bank,did not then apply. In D e c e m b e r , 1830, the call was renewed.
I n D e c e m b e r , 1831, it was repeated, with the declaration, that as he had done
ht» duty in urging the subject, he would " leave ity at present* to the investi" gation of an enlightened
people and their Representatives."
It was atter
all these calls that the Bank did precisely what the President
had recommended* present it to the consideration of Congress, and ask the decision o f
the question, and a renewal of the charter, if, in their oninion, the public i n t«reat rt^uired or permitted it.
T h e matter was before Congress—under its consideration—at the m o m e n t
when their memorial was presented. If it was brought there by a friend, w a s
it criminalel em
to unite
with thats friend
inn his wish to h i v e theQuestion decided?
WaS U W
in
2 * 5 * f" a i ]d l*:
r
°
V
^
H
V
S «he intended destruction? If for
fl
& ™ii*
V s accomphshmentr If tor evil, to ward off the blow? W a s
iESThi?Bank
c o u h ! 3 ^ a i n d / 3 1 ' f e C a u ? e lt m i * h t t h e n >*avVVee,\ supposed
w h L it w ^ d i s c o l i , b 1 ? i ea at J ^ e d ; i a f j ( i dCi dO Un, d become
premature afterwards.
not
S m e w L " w a n E d to ! ? t
* Y* ^ ^
i
*?e accomplished, and that
u m e w a s wanted to weaken the Bank by secret investigations ami public
35
slanders, and to move the machinery of party to subserve the purposes of private and personal hostility? On what, sir* does the Secretary build his grand
argument, that he was bound to force the Bank to wind up? Is it not the^
near approach of the end of the charter? A n d y e t it was but little more than
one year before, that the Bank asked to be informed whether the charter
would be renewed, and that was so premature as to be criminal.
It was not
premature in the Secretary, in August and September, 1833, to trample or*
all laws to compel the Bank to wind up$ and y e t it was odiously premature
to have the question of winding up settled in the spring of 1832. Such is the
consistency and the reasoning of a Secretary of the 'Ireasury. T h i s whole
matter is an insult to the common understanding of the people. I have t o o
m u c h regard for that understanding to believe that they can be deluded by it»
absurdity.
U p to this period; up to the passage of the bill to recharter the B a n k ; up to
the veto on that bill by the President; the question as to the ultimate action
of the President was unsettled* I appeal to history and the records of this
Government
for proof of my assertion* Did that veto change it? 1 admifc
that the President, in that veto, declares the bill unconstitutional, on account
of some of its prolusions,
but not for want of poiver in Congress to create
a hank.
For, with the most paternal kindness and benevolence towards the
ignorance of Congress in the discharge 44of the duties which the people have*
confided to them, he assures them,
had the Executive
been called upor&
" to furnish
the project of such an institution,
the duty would have been
"cheerfully
performed."
T h e President—the Executive—called upon b y
Congress to furnish a plan by which Congress shall manage and control a n J
regulate the finances of the country I Admirable modesty and knowledge o f
the relative rights and obligations of the E x e c u t i v e and Legislative branches
of our Government!
B u t , sir, in all this, due regard was observed not to close up the question*
F o r we are assured that, after the veto, 4fc a general discussion will take place,.
** eliciting new light and settling important principles; and a neu> Congress*.
*'
elected %n the midst of such discussions,
and furnishing
an equal repre44
senlation of the people, according to the last census, will bear to the Capitol*
'* the verdict of public opinion* and, I doubt notn bring this question to a
" satisfactory result."
what Congress was to bear this verdict to the Capitol?
T h e present—that
now in actual session in that very Capitol—members
elected amidst those discussions—of
whiclt, sir, J am oner
fPe were to beac
the verdict! Had the Secretary heard it when he acted? D i d the E x e c u t i v e
wait to hear it? H o w did they know what w e should say? H o w k n o w , that
a majority would not be of opinion that the B a n k ought to be rechartered?
Or that even two-thirds might not be found to oppose, on this point, the E x ecutive will, should that will resist their v i e w s in managing their constitutional guardianship over the Treasury? Could they not wait sixty days for
that verdict for which they had promised to wait? W a s the country on t h e
brink of ruin, sliding d o w n the precipice into the gulf of irretrievable bank*
ruptcy, that its drowning honor and perishing fortunes must be thus r u d e l y
rescued? Sir, that message was a solemn promise by the E x e c u t i v e to let this
question be settled by Congress, and to submit to it. W h a t else can the
words mean, but that the people would consider the subject and their representatives decide it? Did the President intend to trifle with the people? Tc*
profess regard for their opinions, as expressed through Congress, and yet t o
scorn those opinions by his actions? W a s he giving out Delphic responses?
D i d he *b palter with us in a double s e n s e ? " N o , sir, he meant then what he
said, however ill the promise has been kept, under the influence of those w h o
have surrounded him. T h e people so understood—they so believed. It w a s
to be tested, whether, without new arguments
or new facts, legislative a s semblies, chambers of c o m m e r c e , and the great majority of the people o f
these States, had changed their opinions uf>on the new lights which subservie n c e to party and devotion to m e n have afforded? N a y , it was even reasonable to suppose that the President himself might yield his official opinions t o
36
t h e deliberate, w e l l - c o n s i d e r e d opinions o f a majority o f the p e o p l e , a n d to
permit their j u d g m e n t s to g o v e r n in this land of majorities, and u n d e r i n s t i tutions w h i c h have s o long s a n c t i o n e d t h e e x i s t e n c e o f s u c h a fiscal a g e n t .
It
had been s o before. Mr* M A D I S O N had y i e l d e d his d o u b t s , upon p r i n c i p l e s
and for reasons w h i c h d o equal honor to his head a n d heart, a n d w h i c h a r e
w e l l developed in his letter of 25th J u n e , 1S3I.
H e thought it w a s w i s e to regard the q u e s t i o n as s e t t l e d , after all that h a d
o c c u r r e d . H e k n e w and felt that, u n d e r all G o v e r n m e n t s , mi&era est
servtiusubi lex estn aut vagan ant incognita.
T h e l e s s o n he t e a c h e s is w o r t h y o t
i m i t a t i o n , not o n l y from i t s intrinsic m e r i t s , but from the character oj h i m
w h o t e a c h e s it. H e is w o r t h y , sir, of the d e e p e s t homage and the c l o s e s t
imitation.
H e has d e v o t e d a long, a p u r e , and a useful life to his c o u n t r y .
H e has left the i m p r e s s of his v i r t u e s a n d his t a l e n t s on your constitution a n d
y o u r l a w s , in all their h i s t o r y ; and he n o w exhibits o n e of the most d i g n i f i e d
a n d l o v e l y and v e n e r a b l e s p e c i m e n s of a philosophic and patriotic old a g e t h a t
t h e world has e v e r b e e n permitted to w i t n e s s .
M r . P r e s i d e n t , the assertion of the S e c r e t a r y , that this question w a s f i n a l l y
anil irreversibly s e t t l e d , is not o n l y opposed to fact and to the respect d u e t o
C o n gross ^ but it is n o t respectful e v e n to the character of the President h i m self* It turns upon the a l l e g a t i o n , that the P r e s i d e n t w a s e l e c t e d because
he
tvas opposed to the Hank.
I t s u p p o s e s disingenuoitsness
in Aim, in his m e s s a g e s to C o n g r e s s ; and that this single merits this hostility to the B a n k , w a s
t h e cause ot the preference o f him by the people. H a d lie, t h e n , no o t h e r
m e r i t s ? W a s there no other cause w h y he should be preferred, without e v e n
r e m e m b e r i n g his opposition to the B a n k ? H a d he rendered no s e r v i c e s to h i s
country? fought no b a t t l e s ; gained no g l o r y ; suffered no privations; m a d e n o
sacrifices? H a d he no constitutional principles to s e c u r e regard? N o a c t s o f
reform t o w i n favor? Must the people have voted for him for this merit alone?
D o e s a n y man b e l i e v e that he r e c e i v e d a single vote on this ground which h e
w o u l d not h a v e received had there been no quarrel with the Bank?* N o , sir,
I d o not thus e s t i m a t e the i n t e l l i g e n c e of the people nor the m o t i v e s of their
approbation and support. T h e President w a s chosen for other and stronger
r e a s o n s , h o w e v e r unfounded and misguided I m a y regard them. H i s e l e c t i o n
w a s n o reason on w h i c h the S e c r e t a r y can be justified in m a k i n g the great
m o v e m e n t which affected, not our finances a l o n e , but all the business and prosperity of t h e c o u n t r y . A n d he can find no apology in i t , u n l e s s he a s s u m e s
t h e odious position that the P r e s i d e n t ' s will is l a w , and his opinions the unerrm g j r u i d e ol legislative a c t i o n .
v,cui
r>osit«><4 una*»r*> c« +t^* -.+
i Vv~mxr *
c "i<~unvenience, ano umiwc n«^ «**
e t r n t ! e m t(> t h e
^ t o i S f f i ' S ^ t e m l d T ^ t k ?
r
L
G o v e r n m e n t * that i t s
d u e s , and S o l d e r s Xt a d i s t a n c i «S »- V a l i U e Te r h e nd , n o t r e c e i v e d for G o v e r n m e n t
r e n c y m u s t in the mean time be S ^
$t Vat V »s «c c i a t i o n , - that a sound c u r a c c o m p l i s h e d by the S t a t e b a n k - iT.!?"'!..
'? V" « n , under his d i r e c t i o n , p e
c o u , d not
expiration of the charter.
* *
° e hastily substituted a t t h e
N o w , sir, I profess to have very litM*» fin,„ • t . ...
. ,
w i_
n o t m a d e it the s t u d y o f m y life? b i t few ?nd
™ T passing
^ S ^ U omr o kmneonwt sl ,e damidst
g e . I other
have
WUL
nmn o
V
.«,^i„
I
r
i *
*
\
HSW a n * l n » e « i n { r m A
l n n
»^
.imutut o t h e r
37
The Qlst section of the charter so expressly provides: 4* Notwithstanding the
** expiration qf the term for which the corporation is created, it shall be law44
fal to use (he corporate name, style* and capacity, for the purpose of suits
*' for the final settlement of the aftairs and accounts of the corporation, and
** for the sale and disposition qf their estate* real, personal* and mixed, but
** not for any other purpose or in any other manner whatsoever, nor for a pe" riod exceeding two years efter the expiration qf the said term of incorporate lion."
It has, therefore, four instead of t too years to accomplish the. work
of which the Secretary speaks, and we must apply his reasoning to the four
and not to the two years. This provision, to my mind, indisputably proves
the intention of Congress that the Bank should discount,
should do every
thing, make profit, and possess all its privileges, until f36; that the deposites
should.be enjoyetl up to that time* and it should not be compelled to close its
business transactions before the full end of twenty years, the time mentioned
in its charter. It is a charter for twenty, not eighteen years* T h e time subsequently given for winding up was designed to enable it to act to the last moment, and to relieve it from the difficulties under which the old Bank labored
for want of such a provision. I find in this fact, in this provision, a full
answer to the whole argument of the Secretary as to time—a conclusive
reason to believe that he has violated the intention of Congress and the chartered rights of the Bank* Congress gave the Bank twenty years, and did
not authorize the Secretary, by his volition, to deprive it of two years of that
time.
In the next place we must apply the reasoning to a solvent, rich bank; able
to pay all its debts, and count down its silver and gold, on every demand.
This^ solvency, though not long since questioned by its adversaries, is now
admitted by the President—by
the Secretary—by all. And what its difficulties in 1819 or 1820 have to do with its present condition, I am unable to discover. W e are speaking of it in 1833—now—and what it must be m 1836
under proper management. If it were even compelled to wind up at this moment, the official reports of the Secretary prove that it is entirely able to pay
deposites—debts—every
thing', and have a targe surplus*
I need not repeat
the figures in the statement of its situation on the 1st of this month. It had in
bills, and notes, stocks, specie, and debts from State banks, about seventytwo millions, besides its large surplus contingent fund, and about three millions in real estates and all the claims which could be made against it for
stock, notes in circulation, and debts, did not amount, I think, to more than
sixty-seven millions. It had more than ten millioms of specie in its vaults in
December, and that specie constantly accumulating. It has no cause to fear
any attack- It can pay its debts, and restore to its stockholders their money,
and much more. In winding up its concerns, and calling in its dues,.its specie
must, by necessity, constantly augment. It will require its payments from
debtors, and State banks, to be in specie, that it may answer the claims upon
it at home and abroad, from creditors and stockholders.
Apply, then, the positions of the Secretary to such a bank, havingfour years
to close its concerns; or, if you please, having only two.
The sudden withdrawal, at the expiration of the charter, of the deposites.
H o w could those deposites be unsafe? More unsafe then than now?
Why
withdraw'them suddenly?
W h y with more haste than the claims against the
Government would require? But, with whatever haste, why should not the
Bank be able to pay them? They must be paid before the stockholders, and
the whole means of the Bank, stock and all, to four times their amount, would
b e answerable for them. They had in December about forty millions, subject
to the payment of their eleven millions of public and private deposites* T h e
same amount of deposites which alarmed the Secretary have been paid, and
suddenly, too, by the Bank, more than once, and no bankruptcy or pressure
has ensued. They never have been, and never can t>e more safe than at the
precise moment that the Hank closes its active business, and no longer puts
any of its concerns at hazard. It is so with all solvent trustees and agents,
and must be so with the Bank- B u t , sir, the Secretary need not be disturbed
38
by the anticipated loss of the deposites- If we may trust his own reports, and
if matters proceed as they have done for the last two or three years, there wilt
be little or no money to deposite. The augmented expenses ot administration,
and the insolvency of departments, will relieve us from any cause for apprehension on this subject.
, .
, .. _,
m
Again; Should the notes of the Bank, not being received for Government
dues, depreciate, and holders at a distance lose by them?
The receipt ot
these notes by the Government is doubtless usetul to their circulation, but it
is not their only, nor chief value- This is already proved by the depreciated
condition of the notes of some of the selected banks, at a distance from the
the places where they are issued. They are below par. The chief value
consists in their being payable in specie whenever demanded-;—their circulation throughout the Union, wherever business or pleasure requires them; and
because, from the nature of the commerce and trade of the country, their tendency is to the commercial cities—to the sea-board, where they will be cash,
or its equivalent, to all who hold them. Alter new issues shall have ceased,
they will and must be sought by all in the interior who have transactions upon
the sea-coast. The amount of them now in circulation is stated at eighteen
or nineteen millions, at this moment probably twenty millions. They form
about one-fourth of the circulating medium of the country, and are never
greater in amount than appeai*s in the reports of the Bank to the Department.
They will be lessened of cozirse by the prudence and caution of the Bank as it
approaches its dissolution, but even if they were augmented, the causes before
stated would ensure their continued credit. I wish the Secretary had instructed us hotv notes thus situated can depreciate below their nominal value?
or how a Bank, thus strong, would be unable to pay its deposites, public or
private. Nothing but the utter and entire ruin of its debtors, and of the State
banks, which owed it five millions of dollars on the 1st of January, could produce the predicted evil. It is perchance possible that the Prophet, and those
who sustain him, may be powerful enough to occasion the fulfilment of his
rophecy, but they must reach it through the destruction of the credit and condence of the country, and the prostration of commerce, and dealing, and
prosperity, in the community.
Phe amount in circulation is large, in itself, but small when compared with
the capital of the Bank. In the reports of Mr. Crawford, several years after
it was created, this point is developed and discussed. It has been greater
before and since the present Secretary reasoned about it. Its withdrawal,
and closing up the concerns of the Bank, will, of course be felt, whenever it
may be performed, though with the utmost caution and moderation. It must
pe so in closing any large banking institution, or any large mercantile establishment; but-left to itself, unforced by the mandate of power, it would be
less telt than the pressure which now afflicts the community. The Bank
would not be obliged to withdraw from the active employments of the country, means greater than it has now been compelled to do. Its debts and credits, to
the amount ot the former, would but chanee hands, in the shape of
w£?anKW c l l c » , a l I o n ^ a n d - t h e balances due to it % e S i d Si specie, or what
&%£ ££Z^
stockholders- ' l eamountto which
S
en Ce
r
*™.*c fr«
*K„„"J1 »
__l r.VS_
_.
ports
from
thp <s
Sprrpfarv
i r *. - »
• *«hee statements and the rem *Ko
a,. ««„.„,. *h,iw«,
!
^ l i ^ ^ m ^ h S K b S r n S 0 . mlMiJn^-b,S
fcJSS'^l*?'
?£Zt
b^en diminished. The sum mentioned has been w i ' h K w ^ S S ^ a v ! a S j
for there was no substitute supplied by our financial S e c r e t a r y ^ - , ? c a n t e
jaao substitute in the present state of things. The State banks are in^nmretent
hXwCm
/ t e supply it. But, in winding up, it would not be compelled K i
: active use, one-half, nor one-fourth of that amount, in the same time—and
r *bese would^ be replaced by other circulation. What would be the value of
.that'circulation, and how far it would subserve the convenience of the people
, of the country, is quite a different matter. There would be enough—its
We had an example once on this point. >Vhen
v quality no man can tell.
39
t h e old Bank of the United States was closed, other banks crew un l i k * ^ . ^
rooms in a night, and perished almost a* soon
The™threw oat
liun^SSAs
p a p e r - b u t it was not money, nor the equal
representati^
currency increased, in tour or five years, from about forty-fi v e toSTJch mSre
than one hundred millions; and the consequences on the prosperity of t h e ^
p i e and the Government need not be described to him w h o ^ a s L
n££^Z
this B a n k , and m the restoration of specie payments—the restoration of money
to the country
In less than five years, the circulation was reduced from
nearly one hundred and ten to about fifty-five millions; and the effect has been
told in years of public and private prosperity, until ignorance or folly blasted
it- I amn falso
unable to 1perceive
why evils produced by the winding up of the
83G a n d
w u ' L \a? years^in
'37, should be greater than in 1834 and '35?
W h y should they be greater, when the Bank and the country, by the regular
process under the law, are prepared for the operation, than when, the S e c r e tary, suddenly and unexpectedly, forces it upon them? W e ought to have
been instructed upon this point.
But, sir, although I cannot perceive why these notes should be depreciated,
and these evils result which the Secretary so clearly foresaw, I think I can
perceive tewhy athe
stock itself may not bear in market the same price as when
• 5 - *j/-?7 D - d , o n S e r t o r u n * a m i w h y it will not do to judge it now, by 4 */Ae
znjalttole Price Current."
A s its charter approaches a close, it is not a place
tor permanent investments, whence fair prohts and interest may be expected
for years to come. It will then be an article to be purchased only at its actual
transfer value. It wilt bring just so much, and no more, as the buyer bel i e v e s will be paid to him when the stock is taken up and cancelled, and this
will be the nominal value of the stock, and the proper proportion of surplus
profits. B u t , sir, it would be quite as fair to apply the price current to the
stock of a bank just about to expire, and compare it with those which have
longer time to run, as it is now to make the same comparison between the
Bank of the United States and others; after all the weight of official and pergonal hostility has been made to bear upon the former, and the Treasury o f
the Union has been poured into the lap of the latter. It is not strange that
those who reason by such lights should reach false conclusions.
B u t , sir, the Secretary is to make a substitute for our legislative Ji$cat
agent, and for our present indifferent currency.
He is to perform the high
duty of Congress, and prescribe a much better and sounder, circulation—a
m u c h better, more economical, and efficient agent. A n d how? B y substituting State banks, and notes of State banks, and making them receivable as
t h e notes of the United States Bank now are. B y law, the notes of the mother
B a n k and the branches are received every where from those who have paym e n t s to make to the Government, A n inhabitant of Maine can pay the
Government, in Maine, with a note issued in N e w Orleans. H e cannot,
i n d e e d , go to the B r a n c h in Maine and demand specie for it, (for the note he
holds does not promise to pay specie there, but where it was issued,) but he
can pay Government dues with it. T h e complaint that these notes are not
payable every where in specie, on demand, 1 should designate as absurd, it
-courtesy would permit. T h e law makes no such requirement; and no B a n k ,
w i t h branches so scattered, and with the commercial relations existing between the different portions of our wide-spread country, with anv amount o f
capital, could long accomplish it* All that it can do is to provide specie for
the issues at each place. T h i s it has done. If notes of the N e w Orleans,
L e x i n g t o n , Savannah, and other branches, were all payable in specie every
where, it would put the safety and honor of the whole institution in the power
of any e n e m y who might collect notes enough to e x c e e d its specie »t any one
place- T h e enmity ot the Treasury, or of a few individuals, would have found
a ready prey under such circumstances* T h e run upon the Branch at Savannah
w o u l d not have cost so much trouble and money. T h i s mode of payment w a s
40
once attempted by the B a n k , and a committee of Congress, of able and i n t e l ligent m e n , w h o examined its concerns in 1819, looked to this as one ot t h e
causes which emharrassed the Bank in 1819, and as injurious to the institution
and the interests of the c o u n t r y : and c o m m i t t e e s of the H o u s e , in 1S30 a n d
1832, sustained by the H o u s e , affirmed the same v i e w of this matter. B u t
charges against the B a n k d o not b e c o m e stale. T h e y are repeated again a n d
again, wifli all the c o m p l a c e n c y of n e w discovery and invention.
T o create a n equal substitute, the State bank notes must be received e v e r y
where for G o v e r n m e n t d u e s ; those of M a i n e in K e n t u c k y , those ot Buffalo in
Charleston. T o accomplish this, either the G o v e r n m e n t itself must b e c o m e
responsible for these banks, or the banks themselves must become responsible
for e a c h other; otherwise the notes will be as they n o w are, ami as they w e r e
from 1813 to 1817, at discount. T h e G o v e r n m e n t must receive them for i t s
d u e s at par, and pay them out at the discount of from three to fit teen a n d
t w e n t y per c e n t . Individuals will only receive and pay them at their c o m mercial value. A r e w e prepared to pass a l a w , taking upon ourselves t h e
icy
rs?
.... B ... ,
—
.
v . ^ single
w
their stockholders consent? S i r , neither by contract, nor by l a w , can t h e
S e c r e t a r y render these notes receivable e v e r y where, much less can he make
them payable in specie e v e r y where* T h e y will and must depreciate, arid as
t h e G o v e r n m e n t lost b e t w e e n forty and fifty millions by their depreciation
i n the w a r , a n d the people were annually taxed by this cause more than six
millions of dollars, so will it be again in time of peace as well as war.
In saying these things, sir, I am not to be understood as intending to d e preciate the State banks. I admit their general solvency so long as the busi*
n e s s and c u r r e n c y of the country is in a natural anil sound state. I admit also
their entire c o m p e t e n c y to accomplish the objects of their creation within t h e
limits o f action and a g e n c y which were contemplated by those who formed
t h e m . B u t they were intended to be local: their nature and capital does not fit
them for the purposes of the Secretary; and whenever they shall be substituted,
y o u will find them as you have once before found t h e m . You have had annually
repeated for y e a r s , in the treasury reports, an item of b e t w e e n one and two
millions of unavailable funds. T h e s e w e r e State bank n o t e s , and not worth
a farthing. T h e Secretary would soon find a repetition of this i t e m , swelled
enormously, upon his scheme going into operation.
I s it not graceless to complain against the B a n k l h a t i t does not pay specie
where it has not promised to pay it, and when its charter does not require it,
and y e t propose to substitute for it that which can neither pay specie every
w h e r e , nor be receivable where it is wanted?
Fs it not inexcusable that the Secretary should, of his otcn authority* attempt
t o substitute tor the fiscal agent of the G o v e r n m e n t , created by law, agents
heretofore found incompetent, and whose e m p l o y m e n t has created such distress in the countryr
"* Vi l S l 8 i T o t i tsh e . w o r s t ! >f t h e s c h e m e . T h e G o v e r n m e n t deposites its m o M
"JP¥ J? , 1the1 * b a f ] * t071
to much more than their whole capital, and the security
libP?
?*>J
of^f
Sectary!
N o w , what s e c u r i t y i t i^ronnsed" I n
theTast report trom the Department w e have a d o c u m e n t which^xSlafna^t- it
,S
- £ e / f f * r / f r o n l t h e atffeni w h o W M a l s o &* Principal fo he
£$l£i*lt£
with lull powers to make any proposition
he pfeasedTand w h a t eC lv S h e ^ p r ^
e d was adopted by the h x e c u t i v e .
"eapprov
o w n perfect cotifidence in the safety and success of the undertaking, and it
would not o n l y afford the Government an ample guarantee for the safety o f
its funds, in addition to the capital and character of the B a n k s , but w o u l d
41
44
satisfy the public mind. W h e n it is seen that the managers of the State
*444 banks are willing to pledge not only the capital of those institutions, but
their own property and character, it will be impossible to doubt that the
44
deposite is as safe in their keeping as human precaution can make it. It is
44
understood that the security intended to be offered by the banks east of B a l 44
timore
is o f this description; and in case any of their directors shall decline
4
* giving it, they will be substituted by some of the richest stockholders.
In
"
case
I
had
Jailed
to
procure
the
assent
of
any
of
the
banks
in
all
of
the
prin44
cipal cities^ to the giving* of securityt it zaas my purpose to propose the pay44
ment qfan interest of one or two per cent, on the average depositee to consti44
tute a fttnd to meet any possible tosses.
If this plan should be thought
44
advisable*, I have no doubt of Us entire
practicability>>/"
L e t the S e n a t e , let Congress* let the people, hear and approve this plan for
the safety and management of their monev, illegally and unconstitutionally
plundered from the Treasury—this substitution of the Executive will for legislative action. Is it wonderful that Congress was not to be consulted before
this scheme of consummate
folly was adopted? Is it strange that M r . D u a n e
should
regard it as 4 4 a breach of public faith," " vindictive and arbitrary"—
44
not conservative or j u s t ; " as disrespectful to Congress, who were about to
a s s e m b l e ; and who have pronouncetl the deposites safe; as calculated " to
shake public confidence and promote doubt and mischief in the operations of
s o c i e t y ; " as " crude and unsafe;" as dangerous in the hands of a Secretary
d e p e n d e n t for office on E x e c u t i v e will, by making the banks "political
machmery;" as destructive of national credit and reputation; as designed " t o
promote selfish and factious purposes?"
Personal security of some of the directors and stockholders of these B a n k s ,
for
our public m o n e y , to the amount of millions! " T h e p a y m e n t of one or
44
t w o per cent, upon the average deposite, to constitute a fund to meet any
44
possible l o s s e s ! " A m I to reason on such a scheme before an A m e r i c a n
S e n a t e ? Sir, human ingenuity could not offer a grosser insult to the human
understanding. Your money is safe, perfectly safe, and admitted to be s o ,
and you are to take it a w a y , and venture it on personal security of individuals,
a n d on a safetyfund^
to meet losses which you are to create by the
change.
T h e folly and madness of the act is only equalled by the confidence with
w h i c h it is urged upon u s . B u t , sir, y o u , the Congress of the U n i o n , were
n o t even to be permitted to judge of the scheme before it was executedYour
S e c r e t a r y has already executed it, in part. Your money has been ventured,
a n d without consulting y o u , and without taking the security; for he y e t has
n o n e , a n d , of that description, he never will have. Directors and individual
stockholders are not idiots; they will refuse the security when it shall be d e m a n d e d . T h e E x e c u t i v e power has plundered your Treasury* and presents
y*ou suchw epersonal
security as he can get and a safety fund in its stead*
And
w© ? si*> * o n o u r solemn oaths, are to answer that w e approve his course.
"For myself, never* L e t Congress approve, and not only will your money be
squandered, but your constitution violated, your laws e o n t e m u e d ; and, in the
room of l a w , you will have the E x e c u t i v e w i l l , acting upon and controlling a n
a r m y of moneyed mercenaries, and regulating a money power, w h i c h , united
w i t h the sword, can jeopard your liberties whenever he pleases. T h e vindication of the law, at the hands of Congress, can alone arrest this result.
W e have had experience upon all the points connected with this part of the
S e c r e t a r y ' s reasons. But, sir, I begin to doubt the truth of the old m a x i m —
that experience is an efficient teacher to public men and Governments.
The
history of the old Bank ought to have been full of instruction to the Secretary.
I t had a capital of six millions; it had a circulation in proportion to its capital,
nearly three times greater than the present: a large proportion ot its stock was
held abroad, and the holders were to be paid in specie. It had not an hour
;iven to it, to wind up its concerns. I t continued its active operations to the
ast kour of its e x i s t e n c e , and was compelled to appoint trustees for that purp o s e . Y e l , sii> not one of all the v i e w s o f the present Secretary were reali z e d , so far as w e are informed by its history. Its notes did not depreciate—
f
42
specie became hourly more plenty in its vaults—there was abundance of circulation, such as it tvas. The immediate distress was small, the evil was consequential. When Congress was deliberating on the propriety of its renewalone ot the principal difficulties arose from the fact, that it had been allowed
no tune to settle its concerns, and it was feared that this circumstance would
create distress to the stockholders and to the community. This difficulty
was, with assumed carelessness, alluded to by the astute Secretary of the
Treasury in a conversation with an agent of the Bank. The agent incautiously
remarked that the Bank could appoint trustees, and would thus
be enabled t o
avoid these evils. " Thank you, sir," said the Secretary, *fcyou have relieved
** us from our only difficulty." The charter was permitted to expire; trustees
were appointed; the settlement was made; and not one of the anticipations o f
our present Secretary was then realiz-ed. Not one of these irresistible causes
of hasty action, in him, was then found to exist.
Under this head, the Secretary gives us another view, to prove it a question
of time, and that there could be no delay, [p. 7.] T h e argument is this: T h e
election of President and non-renewal of the charter was known in D e c e m ber, 1832; and the Bank ought then to have curtailed. It had discounts in D e cember,
1832, ot sixty-one and a half millions; and in nine months afterwards.
,n A
. .ugu.»t:» 1833, ot sixty-lour millions; being an increase of two and a half
millions. An agent was then appointed to inquire, in the four principal commercial cities,e whether
the State banks would receive the deposites, and per5 f ^ n f f « ? , K ^ * Ut 0 t £ et„h Be a J ak n k.of at h e bUy ni int qe ud i r Syt ao*f et sh .e This ought not to have
?earn!d\fct flI'ML *!
?
' 1'.
Secretary, it might have
learnetl that all the deposites would not be withdrawn W»* that the process
would be gradual; that the amount of revenue bonds ftSiin" due, and CnTSSh
t had curtailed its accommodations
four millions.
That it received two m i l !
n
m£t*i*£S*
iv?n°f. ,teSn'S JW Ahi caf't *Pl adr« *o t* t ht„e
fo«r m i U i o nJV
^ i t s curtaili s w a s s ecie
t was
SG3Gi Vin. t h h t*FJ?
'
°
l
/
^
P
»
f»r
'"creased
d e H n ^ h f ^ u h ? b a l a n c e . *'ue *rom State banks increased two millions, rento « h £ . - ^ 8"?We
to protect the community, as they were compelled to look
it w » n » ?1 a , e 7 * a m l that thus a pressure was produced by the Bank, which
it was necessary to arrest before the meeting of Congress.
e r s e n a ,a,
«nnii«T e ..fr 1m ' e A
* ?
'ger share of misapprehended facts and miat,U n t h e S a m e c o m
suTnnt ion tl^J ?!?e 'Bna n .k k. n e w t h a t 5 t w P ^ s . It commences with a false asift?s? i •
* ft
,
» u U not be rechartered in December,
that this c
whirl! i i VlU8* *a h ta ,, vi ee P^own
,
«uld be known only on one principle,
,es,oen
C
Lit'a C WI I l
t was opposed to it, and his will was law, therei«L «k°?
be no renewal. Is the Bank to b e condemned for not crediting Cthis conclusion?
Yet, it is upon this fact that the whole reasoning ot the
fhe iS?a r ti eB * to *8 ieUC', ,S-, no n December,
I83a/the Bank was not bound to act .on
had aIreativ
altogether falls
been made against it, then his reasoning
and "a* hal^mUlwS,
complains
of
the
increase, from January to August, of two
m,l,,ons
?u» it,*
•
*
be
periods
are
unfairly selected
T o learn correctly
5 l ™ t e n * Y * n ° r c o n t r a c t » ° n <>* the business 0 r a Bank n different years, it is
. "*„ k* l l l l s l " me case, and between January and Au^u^ no fair com par son
can be made. It is peculiarly s « with the Onitell S i t e s ' Bank The great
mass oi nditsb issues,
discounts,
and purchases
of bills denend^m the course of
b e t
E™?ope p vU.S,"em,S8
The "S e *&
"Vth,and ?hetaio«\hfKddiV^o«^ryS5
an
t,,0 ush S h a v e
£ fa^^uth »t N^e w h " rTl e a°n s a n d, a s Vf a
extended as far north as Maine—
nf IhL , i . i
. lb ° .
' ,, a b ert w east as Europe, is perfectly appriasd
nt
and remittinc^"^ ! 1* Tt°h e% * V ! ? Qrc *n ee n
timest hofe , epurcKases
in the South
v e r is
neve
common
Wl^ *K
W
tt h' e S^e c r
. *
«* can be, a lair
hc
d
f h ^ i u t i ? ^ t« tuZtf* l "* * 'r
e t a r y select these periods? W a s it to
do justice to the Bank, or to frame an apology for an illegal act? But the increase was not greater than it had frequently before been between the same
periods m other years; and if the Secretary had taken the trouble to look into
43
the returns of the Bank, and the reports of his predecessors, he would have
found such facts as these. In 1831, between the same months, there was an
extension from about 46 millions to more than 57 millions;—nearly 12 millions.
In 1832, from January to April, only three months* an increase from 68 to
70J millions, nearly 2£ millions, as great as is complained of in nine months,
in 1833. And there are various other instances of a similar character, through
all the history of the Bank. The same results, also, are manifest, by comparing its circulation at different periods.
So, also, the Secretary complains of the contraction of accommodations between August and October last. Y»t, if he had made the same comparison,
he would have found equal and more extensive diminutions at other times,
which were unfelt by the community, and which were never thought to be
evidence of misconduct, nor attributed to improper motives. One instance is
to be found in the preceding year, 1832. From August to October, of four
and a half millions, that is, from 68 to C3,693,000; almost double the amount
complained of in 1833.
Now, sir, I complain of this concealment. Did not the Secretary see and
know these things? Then, why did he attempt to impose on Congress the
simple fact of the extension and diminution, in this year, as evidence of improper purposes and objects in the Bank, at the times they were made? T h e
whole history of the Bank is filled with similar facts, not in relation to the
notes and bills only, but of every species of property and interest which the
Bank holds. And it is so with every other bank. Besides, who ever before
heard that we were to estimate either the wisdom or virtue, or the folly and
vice of a bank, by simply taking the amount of its discounts, at different times,
without inquiring into the causes which produced them; the state of its active
means; the funds under its control; the wants of the community in its commercial and other transactions? Does the Secretary state? Did he know how
all these circumstances operated upon the Bank? \Vhether they justified its
conduct, without regard to the motives which he attributes. N o t at all. It
was sufficient for him that the Bank had 61 i millions out in January, and 64
in August; and he infers that it must, of necessity, have been regardless of the
solemn decision against its charter. It had curtailed four millions by October,
and therefore it intended to oppress the community. If our Louis is satisfied
with such reasoning, he will hud that he has discharged a Necker and substituted a Calonne.
But, while we are comparing these expansions and contractions, which are
so oft'ensive to the Secretary, I desire attention to a fact which is worthy of
note. The expansions in 1831 and 1832 are attributed, in both the remarkable
papers which have issued from the Executive, to a design in the Bank to acquire political poioer^ and affect the Presidential election. I wish self-love
could permit certain individuals to believe that there could be any motives to
action, but such as relate to friendship or hatred of themselves. Sir, when
did the Presidential election take place? In the fall of 1832. When was the
largest extension? Through 1831, and up to April, 1832. During that time,
certainly, the most vehement and active part of the electioneering campaign
did not take place. It was after April, 1832. Now, in April, 183-2, the amount
of these discounts and accommodations was greater than at any moment
during the existence of the Bank. They reached to nearly seventy and a half
millions; and from that moment, while the contest was hottest, as the election
was approaching, while the canvass was going on, there was a steady and
rapid diminution; so that when the election actually occurred, they were only
$63,693,000—a decrease of more than six and a half millions in about sioc
months.
The Bank is accused of attempting to influence the election by
extending its discounts; yet, when the election might be affected by it. if it
could indeed be affected by this means at all, it reduces six and a half millions.
W h y , sir, do these officers suppose us ready to receive any absurdity which
they may choose to assert?
Is it not unpardonable that such impositions should be practised by grave
official documents, and the people be misled thereby, because they have not
44
(he means of correcting them? If the increase from January to August w a s
criminal, was the diminution afterwards also criminal? Shall the Secretary
complain in August that the Bank would not wind up its concerns, and then,
when it did immediately afterwards diminish its business, charge that v e r y
act as a crime? Shall lie avow his intention to force the Bank to close, (Joan
act which compels it to look to that object, and then charge it as unprincipled
fordoing the very thing which he required it to dor Is such conduct to be
tolerated and approved?
^ • ^ ^ J I
But, sir, what right has the Secretary to complain that the Bank e x t e n d e d
its business? Did it injure us or our interests? were the profits upon our s t o c k
less? were our deposites rendered unsafe by it? These things are pot p r e tended. Our profits are increased; and, if possible, so is our security, provided the business of the Bank be not extended beyond its means; and of this
the Bank was the proper judge. An examination of the transactions ot t h e
Bank will show that there has always been remarkable caution ana skill m
the extension and curtailment of its business: both being adapted to tlieactrve
means in its possession at the time, and to the wants of the community. A.
comparison of its conduct, in this respect, with the known history ot t h e
country, would justify high commendation. But this is not my purpose.
It
is sufficient that it has been a faithful agent and trustee, and that the reasons
of the Secretary, as applied to it, are unfounded.
T h e Secretary tells us that the Bank reduced its accommodations in August
and September last, about four millions of dollars. There were then in t h e
Bank nine millions eight hundred and sixty-three thousand dollars of d e p o sites. Now, sir, what was the situation of the Bank at that time, in relation to
these deposites? It had previously discounted upon them, and, to the proper
extent, furnished thereby accommodation to the public. But the moment had
come when it was necessary to withdraw all the accommodation which rested
upon them. IttUey weve to be taken from the Bank, it could notj it had
neither the right nor the power to discount upon them. It would have hazarded
its own safety, if it had. It had been warned that they would be withdrawn;
nay, at the time of its curtailing the four millions, they had been in part^withHow, then,
could
drawn, and the process was goiing forward.
*
'
"*
* the BanK.
without total disregard to its own interests, continue accommodations lounucu
founded
upon funds which it had not, or, if JT had, was immediately to lose, before the
discounts could be returned? It was impossible.
The Secretary says that it might have been liberal to the wants of the com*
mercial community, because. In addition to the ordinary receipts from bonds
on previous importations, the season for cash duties was at hand, and the
receipts from both sources would be large. But, sir, would they not t>e « e P ° sites still, and subject to the same removal as the other deposites? Besuies^ trie
Secretary takes the months of August and September, and speaks ot diminution then* and of receipts from bonds and cash duties then. Yet, among the
papers which he €sent to us, is the copy of his order to the Bank, to deliver u p
to the collector
* all the bonds to the United States, payable at or alter the 1st
of October/ 9 dated 2Gth September, 1833; and the order to the collector to
take the bonds and deliver them to the Girard Bank, and to make no deposites
in the United States' Bank after the 30th September. And this order is dated
on the 20th September also. The Bank was to be liberal on the bonds and the
cash duties; and these are both taken from it„ and the decision to take them
away was made on the 18th September, and executed on the 2Gth, although
the purpose to remove them was avowed long before. I leave these facts to
the reflection of every ingenuous mind.
T h e Secretary complains that there was a severe pressure on the community.
"Why, then, did he do an act which he must have known would increase that
pressure? His assertion is now gravely denied, and we arc assured that it is
mere imagination.
T h e Secretary is right, and his advocates wrong, in this
difference between them. Sir, no pressure? Are the murmurs which r ^ c / J
us on every breeze, and burden every mail, mere fancy? Your stocks of ail
kinds are depreciated—even the price current tells us that. Your works of
45
internal improvement are arrested. Your agricultural products, in the south
and in the north, have fallen in price. Your merchants have countermanded
their orders. Your manufacturers have diminished their work, and are in danger of insolvency. T h e interest upon money has risen from six to twenty-four
Eer cent* in some instances. There is a paralysis of enterprise. Nor let it
e imagined that it reaches onJy your commercial cities and large manufacturing establishments. The merchant cannot purchase, nor the farmer or mechanic sell, and laborers are thrown out of employ by thousands; and, unless
arrested, and speedily, it will, and must, reach through all interests and all
classes of society. It will, in its progress, fall most heavily on the humble,
and the laborious, and the poor—on men of small capital, your farmers,
your mechanics—your working men. Their daily bread will be affected by it,
for their occupations and their wages will be diminished or taken away, and
their feelings will, ere long, be heard in tones not pleasant to the ears of power.
*4 Their griefs, and not their manners, will reason" then.
Already have anxiety—apprehension—gloom—dismay—pervaded the community, and the dread
of the future is more appalling than the suffering of the present. Shall we
shut our eyes to these facts, or deny them at the bidding of power, and justify
them by the machinery of party? N o , sir, there is guilt—deep guilt—resting
upon the authors of this distress; and the indignant frowns of an injured people ought to rest upon them. W h o are they? and where are they? L e t us
not mistake them, and cast our denunciations upon the innocent.
Did the Bank do this mischief? T h e n let punishment fall heavily upon it.
Hut, in my deep and solemn conviction, the guilt does not rest there. N o act
of the Bank, previous to August last, had injuriously attbcted the public. It
had not curtailed. Its course was liberal and just, and met the applause of
all. The community was in a state of quiet prosperity. A t that moment, an
agent was appointed to accomplish the ruin of the Batik. T h e determination
to remove from it its chartered right, and privileges, and benefits, was originally suggested in the neighborhood of Wall street, and had, for months, been
announced, but was, for a time, disbelieved by the whole cominunityNinety-nine out of every hundred of the friends of the Executive declared
it impossible, and that the imputed intention was a false accusation. But it
w a s pursued steadily, until it was understood to be the wish of the President,
and then it was justified by partisans, and declared probable. Still it was disbelieved. But at length semi-official authority declared that the purpose was
fixed.
The Cabinet was consul tetl, the counsel of a majority was disregarded,
and the decree was passed. T h e sure destruction of the Bank—its inevitable
overthrow—was then proclaimed; and, with malignant triumph, it was represented as a crouching suppliant at the feet of the Treasury. But, sir, the edict
w a s powerless. T h e n , and not til! then, did the Bank make one movement
which could, by possibility, lead to any pressure upon the community. A n d
then only did it do what was indispensable to its safety. L e t any man read
the dates of the papers which have been communicated, and tell me if this
statement be not true. A s early as the 3d of June, the President communicated to Mr. Duane his consultation of the Cabinet; and soon afterwards the
determination of the President was publicly known. And it was a determination, not for a partial removal^ as the Secretary affirms; no such partial
removal was mentioned? it was entire; the reasons for it demanded that it
should be entire; the object could not be accomplished unless it was of the
whole deposites. W h a t could the Bank do, but refuse to extend its issues,
and prepare lor the blow? W a s it to rely on a partial removal? to discount on
money which might be taken from it at any moment? to leave its numerous
branches, without preparation, exposed to the vengeance of exulting enemies?
AVill any man seriously assert that it should have relied on the fairness of its
foes? I-ook to Savannah, That branch was considered weak in specie. Its
notes were collected, purchased at a premium,and three hundred thousand dollars were presented in a single day. Justin time, sir, for the news of its insolvency and dishonor to reach Washington at the opening of the session. T h e
vile purpose was not accomplished; but it is evidence of the consequences to
46
the Bank*, had it failed to prepare for the emergency. A n d shall w e be t o l d
that the B a n k , a n d not the Department, produced th-pressure? It is p e r f e c t l y
apparent, from the d o c u m e n t s before UH, that the first m o v e m e n t was by t h e
E x e c u t i v e ? that the necessity was thrown upon the B a n k ; and that it c u r t a i l e d
o n l y so far as the withdrawal of the deposites, and the security ot itself and i t a
branches, imperiously required. In deciding who produced the present p u b l i c
calamity, I ask, and desire an a n s w e r : was there n o t a s t a t e of great prosperity
in business, until T H E A G E N T was appointed, and the determination to r e m o v e
the deposites was made? If this determination had not been made,
was there
a necessity, a possible motive, for the Bank to do one act which c J l " l d *ryi u r e
the existing prosperity? any motive to curtail, and thus harm itsellr
When
that determination was made, when the deposites were to be withdrawn, c o u l u
the B a n k continue to discount on those deposites? M u s t it not, ot n e c e s s i t y *
curtail to the extent which it had discounted on those deposites? W h e n i t s
destruction was a v o w e d , was it not absolutely necessary* at least, to s t a n d
still, or to prepare for the attack, and put itself and its branches in a s i t u a t i o n ,
not only to deliver up the deposites, hut to meet every demand upon it a n d
them? Sir, let public resentment fall where public resentment is merited.
B u t I deny that the mere act of curtailing by the Bank of four, or even t e n
millions, did or could produce the pressure under which w e suffer. T h e s a m e
a m o u n t , and in the same time, has been curtailed without any such effect—
n a y , even without the country being aware of it, I refer for proof to the r e ports of the Secretary of the Treasury, ami the statements of the Bank, a n d
to the history of the times. You have a circulation of about seventy-five m i l lions, and an annual circulation of between three and four hundred millions^
— i
*i.~ .„:*i..i
1 f
i-
-ii-
-.
^
.
, I U , I U I
•
the or-
interest
rery n a ture ot credit ami currency, where the Secretary has made no search; i t i s n o t
produced by the want nl money in the country; it is here, all here, as much a s
in August last; it has not been consumed. B u t , sir, you cannot get it. A n d
whv not? T h e reason is obvious. Credit and confidence constitute the essence
and vitality of all circulating m e d i u m s and of all moneyed transactions; and
credit and confidence have been destroyed by violations of your constitution.
and by the trespasses of your E x e c u t i v e upon the legal rights of those who deal.
i n your circulation, by breach of faith, and by the interference of reck lea* m a lice and ignorance in the management of your financial concerns. T h e B a n k
had not the power to produce it. It was the alarm given to moneyed men*
and to banking institutions, when they saw the determination to destroy t h e
United States' Bank by illegal means, and to restore the state of c u r r e n c y
which existed from 1811 to 181G, T h e y would not hazard their money; t h e y
kept it closely, either to preserve it against danger of loss, or to speculate u p o n
outskirts ot your population—unless justice be d o n e , and confidence in the
ot your Oovermnent, and the administration of* your finant
be restored.- N o attempt to cast the blame on others will a n s w e r , no e d i c t s
of authority are equal to its restoration; no caucus management, no voting t o
sustain a party, or to manliest devotion to a man will relieve the country, a n d
save your merchants and manufacturers from insolvency, and your fanners*
and mechanics, and laborers 1rom distress. You might as well attempt to
arrest or guide the electric fluid in its course, without the aid of the philosopher
ot nature upon the principles fit nature, as to control the credit and confid e n c e which are essential to your circulating medium by the mandate of p o w er, or (he discipline of parlySir, the Secretary, and those who ruled him, ought to have foreseen the re*
suits of his movements, or they are unfit to touch the currency and finances*
of the country. T h e President ought to have employed no such agents to deal
47
with the moat delicate imd difficult of all the concerns and interests of human
society. He who undertakes to manage the currency ought to understand U»
nature, and the instruments he uses. Would you repair or tune a piano with
a blacksmith's hammer, or bleed a sensitive female with a butcher's cleaver?
The treasury of the nation and the finances of the country should not have
been mad* the weapons and instruments of political warfare—the thongs with
which to chastise political adversaries, and the cords by which to bind partisans to the support of party, or premiums to reward their fidelity. Rut the
evil has been done, and it must be repaired by calling back credit and confidence; by vindicating the authority of the laws in the restoration of the depohifes; by wiping out the stain from the national faith; and by the teg-istative
power providing such fiscal agents as its wisdom shall dictate, antl making
such enactments as shall give security to the future. What th<;se are, it is not
?iow necessary for me to discuss.
T h e Secretary proceeds to assign his other reasons, growing out of the manner in which the affairs of the Bank have been managed, [ R e p . page 11-] I
intended to examine them fully, but causes obvious to the Senate restrain me.
I glial 1 notice them rather to draw general conclusions from them, than to
expose them in detail. The Secretary founds his argument upon the fact that
the Bank is a fiscal agent of the Government, and was not created for private
benefit, but has violated its duty by concealing its proceedings, and by doing
acts criminal to the Government—that it has also sought political power.
It is a fiscal agent, but it is at the same time a corporation for the private
benefit of the owners. As agent, its duties are prescribed by the charter.
W h i l e it performs these, the Government has no right to complain. It is on
no principle bound to do for the Government more than the law requires. That
is (he contract by which the agent was appointed, and his letter of instructions*
All th^se it has done; the Secretary does not deny it. And the records of your
Government, since 1817, are full of reports and proceedings of Congress—of
reports of Secretaries of the Treasury—of messages of the Presidents—even qf
the present President—declaring,
in unequivocal terms, its entire faithfulness
and skill in performing all that the law prescribed, and all that the Government had a right to demand. Such ample testimonials in favor of any institution are nowhere to be found. Senators may readily refer to them; and [
therefore confidently afiirm that it has, in no respect, failed to do its duty t o
the Government, under the law. But it is also a corporation for private benefit, made so for the express purpose of being a fiscal agent. After it has rendered its dues to the Government, it has a legal and unquestionable right to
seek its own interest; and if it performs any service for an individual, or for
the Government, it may claim, and is bound to claim, proper compensation
for it. In this respect it is like other individuals and corporations. An illustration may be found in the charge of the Secretary respecting the French draft,
lhe circumstances ot which are known to those who take the trouble to read
T h e Government drew a bill on France, and desired the bank to buy it* it
declined, because it was not necessary tor its interest, but offered to colfect
it, as it did bills for others. W a s the Bank bound to buy? It is not pretended
Jt was not one of its duties as fiscal agent. But the Government urged and
it did buy, and paid the money; it bought it as an individual, and From the
Government as an individual; it had, therefore, all the legal rights of the purchaser and holder ol a bill of exchange: one of these is, damages if it be not
paid. The bill was sent to England, thence to France; was not paid, but dishonored, and was paid for the Bank in France: so that, for a considerable
period ot time it had paid for it twice—once here, and once in Prance. Upon
what honest or legal principle could an individual have denied payment of the
damages? None. In what do the rights of the Government ditter? Is it absolved from the rules of common honesty and common justice? May it do properly what would dishonor a man in such a transaction? Such are not my opinions ol its duties, nor of the regard which it owes to law and justice. Nor is
the denial conformable to its practice. It has again and again paid damages
on protested bills. If I am not misinformed, there are, at this moment, bills
upon one of your Departments, which is waiting for funds to discharge them.
48
and on which the Department has promised to pay interest and damages* T h e n
w h y not in this case? But it has not only paid damages, but where it has b e e n
the holder, has uniformly, and with unbending firmness, a l w a y s d e m a n d e d
them* T h e records of your T r e a s u r y show a multitude of cases ot this d e s c r i p t i o n , a n d , among others, the familiar one of Stephen Girard.* A n d , sir, there
is no apology in the fact that the G o v e r n m e n t had deposttes in the Bank a t
the time. T h e statements o f the Bank disprove it, and% if they did not, t h e
case would not be altered, T h o s e deposites were the right of the B a n k , b y
l a w , for which it had paid, and on which it had a right to discount, until t h e y
w e r e drawn out for the payment of the debts of the G o v e r n m e n t .
W i t h regard to the action of the B a n k , in what is said to be postponing t h e
p a y m e n t of the public stock in April and D e c e m b e r , 1832, the Secretary r e fers to the k n o w l e d g e of Congress and its acts. A n d there I am willing to l e t
it rest, without c o m m e n t on the facts. B u t did it not occur to the S e c r e t a r y ,
w h i l e he was assuming his high authority, that he w a s , in this xery c o m p l a i n t ,
casting additional insult upon Congress? Did it not occur to him that t h i s
subject had been investigated by Congress with care, and its j u d g m e n t p r o n o u n c e d , that the Bank neither sought nor requested a postponement; a n d
w a s , in effect, acquitted of blame? H o w dare h e , by repeating the a c c u s a t i o n ,
thus insult a Congress in which the friends of the E x e c u t i v e had control? H o w
long will Congress bear to be thus bearded under the sanction of the E x e c u t i v e , by men w h o live upon the E x e c u t i v e breath, and whose lives are fleeting
as the changes of the E x e c u t i v e passions?
S o , also, sir, the complaints about the Exchange C o m m i t t e e . T h i s subject
of e x c h a n g e s , and the action of the B a n k in regard to t h e m , w a s c o m m e n c e d
in J u l y , 1817; and a correspondence, at great length, held by M r . Crawford
with the B a n k on the subject, and, after some opposition from him which w a s
subsequently w a i v e d , a plan of exchange*, foreign and d o m e s t i c , was adopted,
which has, with few and unimportant variations, been pursued* in form and
substance, to the present time. T h e active operations under the plan, however,
did not, I believe, c o m m e n c e , in consequence of the situation of the B a n k ,
until 1890. B u t every Secretary of the T r e a s u r y has been acquainted with
i t , and approved it. T h e C o m m i t t e e of Investigation of 1819, on which were
S p e n c e r , L o w n d e s , M c L n n e , Bryan, and T y l e r , had this, with all other
matters, before t h e m , and found no cause for condemnation. It is not everi
m e n t i o n e d , in the long list of grievances, which Mr. Spencer thought d e m a n d ed that a scire facias should issue; nor to be found in amendments proposed,
at that time, to restrain the B a n k . In every investigation and discussion
since that time, it has been the subject of c o m m e n t , and y e t Congress has not
thought it proper to interfere; and now the E x e c u t i v e and a Secretary of t h e
Treasury found, on their omission, a reason for violating the rights of t h e
B a n k , and assuming to do what Congress declined to d o .
B u t the Secretary complains that, on this point and some others, there w a s
concealment from the Government directors, and thus from the G o v e r n m e n t —
meaning always by that w o r d , tbe E x e c u t i v e , Sir, if the directors did their
^ • T h e case of John M. Ebirck, in 1819-'2G, also illustrates your practice and prinS?i?-" , H e ^ l V \ o r 9 e d » gratuitously and without consideration, a bill on the house o f
W i l i n k . of Liverpool, for t w o thousand pounds sterling
T h e house failed; h e
wrote to his friends to protect the bill; but, uncertain w h e t h e r his orders w o u l d b e
in time, ne applied to the d e p a r t m e n t , and o n t K y n TO » X P O S I T B T H E AMOUXT IJC
THK T R » A « C U r , W I T K I T O K S T * * O M TflK TT^fK OJ THK PURCHASE,
tO b e
r e t u r n e d U>
him if the bill was paid bn England—or to give security, at o n c e , for the w h o l e
amount, as soon as advices should be received, with interest and charges of protest
and postage. Yet both offers w e r e refused, and he was required to pay, and did p a y ,
damages. H e met the same fate on a second bill on Groning, W h e n an innocent
endorser is thus treated by the Government, how can it—how dare it—complain that
a purchaser from it also asks damages? J s it not gross injustice? unworthy disregard
o f its own honor and reputation for fair dealing? Yet such is the complaint made b y
t h e Secretary and President against the Bank, and for which its chartered rights are
to be disregarded. It is sufficient to create disgust in honest and fair men.
49
duty, there was no concealment* T h e rules adopted in 1817 prescribe the
number of directors in addition to the president and cashier who shall act on
this subject: they are to meet daily; to purchase at rates fixed by the com*
mittee- T h e security on the bills is prescribed to them. Even if one member
objects, there is to be no purchase; and once a week a statement of the E x change Department is laid before the Board of Directors, and is admitted to
be so done by the four directors, in their letter of the 22d April, 1832, to the
President. How unfounded, then, the accusation that the board violated the
charter, by permitting less than seven to transact the business of the Bank,
and concealed, improperly, its exchange transactions.
B u t the Secretary complains of another case of concealment- I give credit
for the shame which prevented him from mentioning the case, by name. H e
refers us to the letter of the four directors, in which it is found, and in which,
alone, it ought to be found. Any official Executive document would be disgraced by it. With regard to that case, I only state, that the inquisition* by
which it is developed, was secret; founded on a missive from the President,
which he had no authority to write; not avowed; traitorous to their fellow
members;
a violation, direct and positive, of the words of the charter; a base
inquirj r , manifestly governed by party resentments, to be used for party and
vindictive purposes, meriting the scorn of honorable minds. A true estimate
of the objects of that investigation, and of the new lights afforded to the Executive, to justify his action against the Bank, after the refusal of Congress,
may be formed, when it is recollected that the four directors communicate, in
answer to the injunction of the President, information only on Uvo subjects—
the action of the exchange committee, and the accounts of Gates & Steaton*
These were the subjects of import, which called upon the President to descend
from his high station, to turn inquisitor, to find motives and reasons for this
discharge qfofficial duty; and these, sir, the financial reasons of
^financial
officer', which compelled him to trespass on the rights of the Bank, and insult
the legislative power.
B u t , sir, the Bank used its money for political purposes. And here again
the Secretary selects the arbitrary periods of January, 1830, and May, 1831;
and makes a moderate mistake of nine or ten millions. H e alleges that, in
January, 1830, the Bank had only about $43,400,000 of debts due to the Bank;
but in JMay, 1831, #70,400,000; an extension of twenty-eight
millions.
Now,
if any Senator will take the trouble to cast up the items of discounts and bills,
the public debt,and the balances from State banks and foreign houses, he will
find an amount of about 52, instead of $42,000,000, of the means of the Bank,
in active use in January, 1830.
And if the same process be applied to M a y ,
1831, there will be found less than $£2,000,000, leaving, as the difference
between them, in accommodation to the public, less than 10, instead of
$28,000,000.
And to justify this increase, he will find in May, 1831,
#1,400,000 of specie in its vaults more than in January, 1830; $2,828,000 more
of deposites; $1,762,000 more of State bank debts; $211,000 less in real propertyj a difference, in all, of more than $6,000,000, to justify this extension.
Ami if the simple rule of three had been applied by the Secretary to the different items, he would have found that the extension, in proportion to its means,
was very little, if anv, greater in May, 1831, than in January, 1830; and that,
for any difference which did exist, the commercial wants of the community at
those periods would form an ample reason to any well-informed financier,
without attributing the fact to the desire of acquiring political power, or preventing an individual from being elected President—a motive of action in the
Bank which seems to be the sleeping and waking dream of certain minds.
T h e Senate know, if the Bank had refused the extension of its accommodations at that time, the merchants, the public, the Government, must all have
suffered inconvenience and injury. #
_••**T h e only remaining evidence, which I now recollect, of the misconduct ot
the Bank, which was detected by the inquisition, and which proves an effort
to gain political power, and forms a reason with the Secretary, relates to the
expense account; and the only questioned matter in that is, its publication of
certain papers; prepared by others, and circulated by it, in its own defence,
4
50
3NW, this subject was investigated by Congress, under the auspices of the
friends of the Executive, and their powers under the charter were ample for
this purpose, although the same powers are not given to the Executive. C o n gress did not think fit to act upon their investigation of the facts: y e t they had
scarcely left Washington, before this inquisition was established, under E x ecutive patronage. A n d what was discovered? Nothing but what was upon
ec
the books, and must have been known to the investigating committee.
The
first: cause of complaint is, that the President ot the Bank was authorized, b y
mother articles which had issued from the press; and it authorizes the President
of the Bank " to cause to be prepared and circulated such documents a n d
papers as may communicate to the people information in regard to the nature
and operations of the B a n k . "
. •„_-;«*. ™*~
Nothing is said of buying or bribing presses—nothing ot all the ternnc purposes whifh haunt the Secretary. T h e P r e s i d e n t s duty was to have prepared
;and circulated documents and papers; and their character is deftneu; t n e y
must relate to the nature and operations of the Hank.
Such a trust would
have been bestowed, by any board* of any bank, on the President, or a c o m mittee of directors, in whom they had any tolerable share of confidence; a n a
she re especially so, as the expenditures must appear in the expense account,
which is regularly submitted to the dividend committee, on which it so napopened* 1 believe, that one of these malcontent directors was* B y this process,
the control of the board was complete. H o w , by any fair construction, c a n
this resolution be extended beyond the defined object? H o w can it be regaruett
a s placing the whole capita! in the hands of the President? Honest men, m
executing it, would never construe it thus. T h e y would be confined to reasonable expenditures for the specific purpose. And until I saw the tinlimueu
power drawn by the Secretary from the general words ot the charter as to m e
resolution of the board is a fit companion of his construction of the terms ot
the charter.
.
.
fill.
This form of resolution is common in all cases where discretion is c o n n a e a ;
Instance of the same kind is found in the resolution authorising the Jrresiuentn
<to take steps necessary to protect the W e s t e r n branches from a run made u p °
*hem. The authority, in such cases, cannot be restricted by the words o t t h e
resolution;
it is restricted by its nature and objects, and by the fidelity ot the
?£?£- ? c - tu * ls u £ d e . r . ! t -f >v*>at
was done under this resolution? Have Senators
ISfarke & H„mL £*\"
P« b l }^tAon S ?_Gal latin's Essays Tucker's B e v i e w ,
4^iarice & HnlPs book; reports ot committees of Conprp«- speeches of three
of the veto message, and ot a Senator's speech; some addresses to Legislatures,
neWSpaperS
XhL?3KclM?
' «°ntMnin X * part of thesefand perhaps of some
fcu'fnStV^6 e ra U t h a ti f findJn the precious developments of these Executive,
? i v l r,,,i ° \ n m e n t a l agents. I h e expense, w e are told, indeed, on E x e c u * I I t «?« n t 3 & amounted to some 80,000 dollars; but there was a slight mis*aKe or some 30 0O0 in the items, and the addition. T h e average expenditure
*©r three and a half years was a little more than 14,000. A n d , of the whole,
ADout one-half was for printing and distributing Congressional reports andspeeches, and but about 2,000 fur papers containing these essays, &c. A n d
w a s it criminal to do this? Is there harm in circulating the Essay of Gallatin,
51
and that of the accomplished scholar and political economist, T u c k e r ? I w i s h
the Bank had sent copies to the Secretary, and that he w o u l d have c o n d e scended to read t h e m , before he a c t e d . Is there crime in distributing reports*
which C o n g r e s s had thought it proper to print, by thousands*
at the
expense
of the public Treasury*
for the same object—the
information
of the people?*
I s there g u i l t in publishing any or all these papers; and those s p e e c h e s , w i t h
the rest, which shed lustre upon the S e n a t e itself, and will e l e v a t e the r e s p e c t
for A m e r i c a n i n t e l l e c t , wherever they shall be read, throughout the civiliz.etl
world? T h e y must have strangely c o n s t i t u t e d m i n d s w h o can complain o f
this; and must hold no enviable position, when such d o c u m e n t s are c o n s i d e r e d
by them as offensive to their party and party purposes* B u t , sir, I r e c o l l e c t
that John Sergeant, as a member of the Board ot D i r e c t o r s , happened to b e
the person to whom a proposition was m a d e for printing the Congressional
R e p o r t s , and that his name is dragged in by these directors, in their honorable
and manly estimate of what is right in c o m m u n i c a t i n g facts for E x e c u t i v e i n formation and action. Sir, w h y was this? W a s it out of love for fair d e a l i n g *
and for the sake of j u s t i c e and truth? Or was it to play upon party and p o l i tical passions and prejudices? W h y d o e s his n a m e appear upon the
Records
of the Inquisition?
H e had, sir, been a prominent politician, a c a n d i d a t e for
a high station under y o u r G o v e r n m e n t , associated with another* of w h o m I
may not utter a w o r d , although, here and e l s e w h e r e , I shall feel all that isj u s t l y d e m a n d e d from patriotic and virtuous feeling, for s e r v i c e s to m y c o u n try of the best and noblest k i n d . It may be, sir, that these facts i n f l u e n c e d
these directors, when they placed his n a m e , as an agent, in these p u b l i c a tions, and without inquiring what was the nature and e x t e n t of that a g e n c y *
B u t , sir, the m o v e m e n t will produce no effect favorable to their w i s h e s w i t h
t h e people, whatever it m a y do with those in p o w e r . T h e y k n o w w e l l t h a t
the name of John Sergeant cannot be associated with illegal, dishonorable, o r
dishonest purposes. For myself, I rejoice that I w a s permitted to give h i m
m y suffrage.
H e is a m a n , m i l d , amiable, u n a s s u m i n g , unostentatious, y e t
firm, d e c i d e d , and e n e r g e t i c : *fc not early w o n , to fawn on a n y m a n / '
Always
candid and frank, with no c o n c e a l m e n t of v i e w s , no m a n a g e m e n t and finesse
to bind partisans to his control5 profound in legal and constitutional k n o w l e d g e ; pure in private life, as in public morality; a republican by birth*
feeling, education, principle; a patriot, ardent and d e v o t e d to the best a n d
highest interests of his c o u n t r y ; with a character tottts teres at que
rotundasA n d should the time ever c o m e w h e n he shall wear the honors of his country*.
e v e n the highest, he will wear them without a stain. I beg pardon of t h e
S e n a t e for m y deviation from the strict topics of d e b a t e ; but I c o u l d n o t
restrain this slight expression of respect and friendship for a m a n , w h o is e m i n e n t l y w o r t h y of both, as he is of the regard and confidence of his f e l l o w citizens.
S i r , have matters arrived at such a crisis, in this free land, that the publication of s u c h d o c u m e n t s at? those which I have m e n t i o n e d is to be c r i m i n a l l y
p u n i s h e d , without l a w , by the E x e c u t i v e ? T h a t an individual may not c i r c u l a t e papers relating to his character and proceedings with impunity? I f so*.
let it be so recorded by our vote* and let the people knotv it. L.et t h e m be t o l d
that official d o c u m e n t s and able discussions may not be s e n t to t h e m , unless
they advocate the Executive,
A n d let them be told further, that, if a c o r p o ration p r e s u m e s to defend itself from any imputation which one man ami his
partisans
choose to throw upon it, its legal privileges, its chartered rights, m a y
be taken a w a y , tvithout trial* and at the nod of p o w e r .
M r . P r e s i d e n t , the B a n k had not o n l y the legal right, but the moral o b l i gation rested on it to defend itself. It has, at least, the privilege which w e
a l l o w to the l o w e s t w r e t c h in the c o m m u n i t y , to w h o m neither our l a w s n o r
our feelings d e n y the privilege of s e l f - d e f e n c e , or the permission to publish a
denial of the guilt charged upon h i m . B u t , sir, if the B a n k has a c t e d i n c o r r e c t l y , if it has violated its d u t y and its charter, there is a full and a m p l e
r e m e d y , provided by the charter itself. B u t how? B y the power of the K x e c u t i v e ? N o , it is not intrusted to h i m ; but by the tribunals of the country*
u p o n the motion of C o n g r e s s or of the E x e c u t i v e - T h e 23d s e c t i o n , d r a w n b y
52
Mr. Daggett, provides, that, when there is reason to belieye that the charter
has been violated, a scire facias may be sued out of the Circuit Court of the
United States for Pennsylvania; that, after it has been fifteen days served,
before the commencement of the term, the case may be examined by the court,
and a forfeiture declared: PROVIDED THAT EVERY ISSUE OF FACT JOINED B E TWEEN THE UNITED STATES AND THE CORPORATION SHALL BE TRIED BY A
JURY; and there may be a review by the Supreme Court.
Is this law a dead
letter? Was this provision inserted for no object, but that the Executive
might trample it under foot? When Congress have provided a mode of punishment by court and jury^ may the Executive disregard it, and inflict punishment of another kind, without tried? The President, in his annual message, alleges that there was not time for this proceeding before the expiration
of the charter- Is this so? He knew the facts in April, 1833, at least in
August* 1833, and the cliarter does not expire until March, 1836. The court
sat in October last, and, in one year, the final decision might have been had.
The late Attorney General ought to have informed the President better. But
if the allegation was true, is that a justification? The subscribers to the Rank
ventured into the contract, on the faith of this provision, by which they supposed their rights were protected; and if it be not sufficient for its object, if
it fails, can the Executive, of his own mere motion,.supply the defect? This
assumption to punish the Bank, in violation of this law, is one of the most
gross and contemptuous acts of disregard of legal restraint, to be found in our
or any other history. It is an act of undisguised despotism. It spurns the
high constitutional right of trial by jury and the laws of the land, and places
on the judgment-seat the vengeance of irritated feelings, of selfish prejudice,
of party passion; I entreat, I implore Senators that they will not, for anjr
present purpose, for any passing object, give countenance, in this home of
constitutional liberty, to this dangerous usurpation.
Mr. President, I have discharged my duty, with no common pain, by presenting my opinion of the reasons which the Secretary has assigned for ordering
the public money to be removed from the Bank, which had, by law and solemn
contract, been made the place for its deposite—the temporary Treasury of the
Union—for its safe keeping. I do believe that those reasons are insufficient,
and the principles which he avows dangerous to liberty. It is a solemn duty
in Congress to express its strong condemnation of the act—to restore the money—and, as far as practicable, to maintain the faith of the Government. I t
is not the less necessary that we should act promptly and efficiently, because
it has been done under the pretended sanction of the law. There are no more
dangerous encroachments against free institutions than those which are made
under misconstructions of law, and appealing to its authority. Nor, sir, is
there any tyranny more odious and terrific than that which preserves the forms
of free Government, while all its powers are centred in the will of one man.
But we are told, though all that I have said may be true, that we—the Senate—may not express our judgments upon these resolutions—we, to whom
the law requires the reasons of the Secretary to be submitted tor our decision,
™ay not pass on those reasons, if we think the act a violation of law and duty.
Why, then, sir, submit them to us? Why this mockery of legislation? And
yvhy may we not denounce and condemn such conduct? W e are told, because
served f o r
wmalTJnm
^ ' V r ' 1S
Ti*etJf t4hl r ee m
minorities. Look back to the
Chm 1
tm^chm^^
V ^ t o b * ovedi id o e s a n L s w ^ on this point. But suppose an
S
T l
f
f ™
*
. that destroy our legislative power of
actionr
do not so read the constitution of our country. The people have
ordaineU that tins body should possess and exercise some of the highest func-
53
tions of all the co-ordinate D e p a r t m e n t s o f the G o v e r n m e n t , and they have
not provided that the n e c e s s i t y of exercising one should take a w a y the others.
T h e constitution of this b o d y , in that respect,"demands the highest attributes
of intelligence and integrity in its members. M a y it ever sustain its p o w e r s ,
unsurrendered, uncontrolled, uncontaminated.
W e are c o m p e l l e d , hard as is the task for the human mind and heart, to
pass daily and hourly from legislative to executive duties? and the latter often
arise from our o w n legislative action. A n d so it may be with regard to our
judicial powers? for so the people willed it, and, I believe, most w i s e l y . T h e
representatives of equal S t a t e s , w e must worthily, as such representatives,
discharge all our duties; and, above all, w e must not permit a remote conting e n c y , that w e may sit as judges, to deprive us of our largest and most important power under the constitution—that of legislation.
The time may c o m e ,
sir ? when a combination of both these powers m a y be indispensable to the
safety of our liberties, our l a w s , and our constitution. T h o u g h w e m a y not
choose to assert that it has already c o m e , y e t it may not be distant, when some
spoiled child of fortune, with no merit but that of seizing boldly on popular
prejudices, may reach your highest executive station? m a y draw around him,
with some wise and good, many of the profligate, the corrupt, and the d e s p e rate? may seize your T r e a s u r y , and usurp the powers and duties of the L e gislature; and, under perverted construction of the l a w s , and expressions of
profound respect for the public good, and love for the convenience of the
people, may disregard the whole spirit of your institutions; and y e t may gain
proselytes by the favors and rewards of offices and contracts, and hold in
dread his opponents by the fear of punishment; when his word may be truth—
his opinions law—and adulation to him the highest merit; and when the miasmatic minions which are generated and nourished in the corrupted atmosphere
oi corrupt power shall float on every b r e e z e , carrying moral and political p e s tilence through the whole circumference of the land; and when pressed by
the friends of freedom, in the confidence of the strength which he has s e c u r e d ,
he may e x c l a i m , " Is not the King's name forty thousand n a m e s ? " A n d he
shall be a n s w e r e d —
^^
*«
Fear not, m y lord; the p o w e r that^ffaae y o u King
ct
Has p o w e r to k e e p y o u King", in spite of all.**
T h e n , sir, then, shall such a President and his subordinates be permitted,
by the mere act of violating law, to deprive the Senate of its powers, and thus
p a r a l y s e the whole legislative action of your G o v e r n m e n t ; for, without the
S e n a t e , the H o u s e ot Representatives has no legislative capacity?
Shall
t h e y , the more guilty they are, be the more powerful in arresting you in the
discharge of your high and almost sacred functions? N o , sir, no* T h e Senate
will not—cannot—sanction the suicidal doctrine.
@FedFRASER