THIRTY YEARS VIEW
1820 TO 1850
TRANSMIGRATION OF THE BANK OF THE UNITED STATES
FROM A FEDERAL TO A STATE INSTITUTION.
THIS institution having again appeared on the public theatre, politically and financially, and with power to influence national legislation, and to control moneyed corporations, and with art and skill enough to deceive astute merchants and trained politicians,(for it is not to be supposed that such men would have committed themselves in her favor if they had known her condition,)it becomes necessary to trace her history since the expiration of her charter, and learn by what means she continued an existence, apparently without change, after having undergone the process which, in law and in reason, is the death of a corporation. It is a marvellous history, opening a new chapter in the necrology of corporations, very curious to study, and involving in its solution, besides the biological mystery, the exposure of a legal fraud and juggle, a legislative smuggle, and a corrupt enactment. The charter of the corporation had expired upon its own limitation in the year 1836 : it was entitled to two years to wind up its affairs, engaging in no new business : but was seen to go on after the expiration, as if still in full life, and without the change of an attribute or feature. The explanation is this :
On the 19th day of January, in the year 1836, a bill was reported in the House of Representatives of the General Assembly of Pennsylvania, entitled, An act to repeal the State tax, and to continue the improvement of the State by railroads and canals ; and for other purposes. It came from the standing committee on Inland navigation and internal improvement ; and was, in fact, a bill to repeal a tax and make roads and canals, but which, under the vague and usually unimportant generality of other purposes, contained the entire draught of a charter for the Bank of the United Statesadopting it as a Pennsylvania State bank. The introduction of the bill, with this addendum, colossal tail to it, was a surprise upon the House. No petition had asked for such a bank : no motion had been made in relation to it : no inquiry had been sent to any committee no notice of any kind had heralded its approach : no resolve authorized its report : the unimportant clause of other purposes, hung on at the end of the title, could excite no suspicion of the enormous measures which lurked under its unpretentious phraseology. Its advent was an apparition : its entrance an intrusion. Some members looked at each other in amazement. But it was soon evident that it was the minority only that was mystifiedthat a majority of the elected members in the House, and a cluster of exotics in the lobbies, perfectly understood the intrusive movement :in brief, it had been smuggled into the House, and a power was present to protect it there. This was the first intimation that had reached the General Assembly, the people of Pennsylvania, or the people of the United States, that the Bank of the United States was transmigrating ! changing itself from a national to a local institutionfrom a federal to a State charterfrom an imperial to a provincial institutionretaining all the while its body and essence, its nature and attributes, its name and local habitation. It was a new species of metempsychosis, heretofore confined to souls separated from bodies, but now appearing in a body that never had a soul : for that, according to Sir Edward Coke, is the psychological condition of a corporationand, above all, of a moneyed corporation.
The mystified members demanded explanations ; and it was a case in which explanations could not be denied. Mr. Biddle, in a public letter to an eminent citizen, on whose name he had been accustomed to hang such productions, [Mr. John Quinsy Adams,] attributed the procedure, so far as he had moved in it, to a formal application on the part of the legislature to know from him on, what terms the expiring bank would receive a charter from it ; and gave up the names of two members who had conveyed the application. The legislature had no knowledge of the proceeding. The two members whose names had been vouched disavowed the legislative application, but admitted that, in compliance with suggestions, they had written a letter to Mr. Biddle in their own names, making the inquiry ; but without the sanction of the legislature, or the knowledge of the committees of which they were members. They did not explain the reason which induced them to take the initiative in so important business ; and the belief took root that their good nature had yielded to an importunity from an invisible source, and that they had consented to give a private and bungling commencement to what must have a beginning, and which could not find it in any open or parliamentary form. It was truly a case in which the first step cost the difficulty. How to begin was the puzzle, and so to begin as to conceal the beginning, was the desideratum. The finger of the bank must not be seen in it, yet, without the touch of that finger, the movement could not begin. Without something from the Bankwithout some request or application from it, it would have been gratuitous and impertinent, and might have been insulting and offensive, to have offered it a State charter. To apply openly for a charter was to incur a publicity which would be the defeat of the whole movement. The answer of Mr. Biddle to the two members, dexterously treating their private letter, obtained by solicitation, as a formal legislative application, surmounted the difficulty ! and got the Bank before the legislature, where there were friends enough secretly prepared for the purpose to pass it through. The terms had been arranged with Mr. Biddle beforehand, so that there was nothing to be done but to vote. The principal item in these terms was the stipulation to pay the State the sum of $1,300,000, to be expended in works of internal improvements ; and it was upon this slender connection with the subject that the whole charter referred itself to the committee of Inland navigation and internal improvement ;to take its place as a proviso to a bill entitled, To repeal the State tax, and to continue the improvements of the State by railroads and canals ;and to be no further indicated in the title to that act than what could be found under the addendum of that vague and flexible generality, other purposes ; usually added to point attention to something not worth a specification.
Having mastered the first stepthe one of greatest difficulty, if there is truth in the proverbthe remainder of the proceeding was easy and rapid, the bill, with its proviso, being reported, read a first, second, and third time, passed the Housesent to the Senate ; read a first, second, and third time there, and passedsent to the Governor and approved, and made a law of the land : and all in as little time as it usually requires to make an act for changing the name of a man or a county. To add to its titles to infamy, the repeal of the State tax which it assumed to make, took the air of a bamboozle, the tax being a temporary imposition, and to expire within a few days upon its own limitation. The distribution of the bonus took the aspect of a bribe to the people, being peddled out in driblets to the inhabitants of the counties : and, to stain the bill with the last suspicion, a strong lobby force from Philadelphia hung over its progress, and cheered it along with the affection and solicitude of parents for their offspring. Every circumstance of its enactment announced corruptionbribery in the members who passed the act, and an attempt to bribe the people by distributing the bonus among them : and the outburst of indignation throughout the State was vehement and universal. People met in masses to condemn the act, demand its repeal, to denounce the members who voted for it, and to call for investigation into the manner in which it passed. Of course, the legislature which passed it was in no haste to respond to these demands ; but their successors were different. An election intervened ; great changes of members took place ; two-thirds of the new legislature demanded investigation, and resolved to have it. A committee was appointed, with the usual ample powers, and sat the usual length of time, and worked with the usual indefatigability, and made the usual voluminous report ; and with the usual lame and impotent conclusion. A mass of pregnant circumstances were collected, covering the whole case with black suspicion but direct bribery was proved upon no one. Probably, the case of the Yazoo fraud is to be the last, as it was the first, in which a succeeding general assembly has fully and unqualifiedly condemned its predecessor for corruption.
The charter thus obtained was accepted and, without the change of form or substance in any particular, the old bank moved on as if nothing had happenedas if the Congress charter was still in forceas if a corporate institution and all its affairs could be shifted by statute from one foundation to another ; as if a transmigration of corporate existence could be operated by legislative enactment, and the debtors, creditors, depositors, and stockholders in one bank changed, transformed, and constituted into debtors, creditors, depositors and stockholders in another. The illegality of the whole proceeding was as flagrant as it was corruptas scandalous as it was notoriousand could only find its motive in the consciousness of a condition in which detection adds infamy to ruin ; and in which no infamy, to be incurred, can exceed that from which escape is sought. And yet it was this broken and rotten institutionthis criminal committing crimes to escape from the detection of crimesthis counterfeit presentment of a defunct corporationthis addendum to a Pennsylvania railroadthis whited sepulchre filled with dead mens bones, thus bribed and smuggled through a local legislaturethat was still able to set up for a power and a benefactor ! still able to influence federal legislationcontrol other banksdeceive merchants and statesmenexcite a popular current in its favorassume a guardianship over the public affairs, and actually dominate for months longer in the legislation and the business of the country. It is for the part she actedthe dominating partin contriving the financial distress and the general suspension of the banks in 1837the last one which has afflicted our country,that renders necessary and proper this notice of her corrupt transit through the General Assembly of the State of Pennsylvania.
In 1824, 32 years old Thaddeus Stevens made acquaintance of Nicholas Biddle and became one of his many attorneys in the service of the Bank of the United States. Naturally, the future grand old commoner, radical reconstructionist and greenbacker joined the pro-Bank, anti-Jackson Anti-Mason party. From 1833, Stevens was the able leader of the Pennsylvania Legislature where he organized Whigs(pro-Bank) and Anti-Masons to vote together. In 1835 these two parties elected Joseph Ritner as Governor of the State.
The years between 1832 and 1836 were the years of Andrew Jackson's war against the Bank of the United States. Followed by 4 years of agitation against banks and for an Independent Treasury......
The Charter of the Bank of the United States was to expire on March 4, 1836. On January 19, 1836, Thaddeus Stevens reported a bill in the Pennsylvania House of Representatives, "to continue and extend the improvement of the State by railroads and canals". This bill included a section for "other purposes," which "contained the entire draught of a charter for the Bank of the United States, adopting it as a Pennsylvania State bank." Thaddeus pushed the bill through the House with a Midas touch that amazed and impressed even Nicholas Biddle.
Some years later the Whigs and Anti-Masons were voted out of the majority of the Pennsylvania Legislature, and in January 1842 a committee opened an investigation into the affairs of this bank, relating to the charge of bribery. This committee ascertained that $479,000 was advanced as bribes by the Biddle bank to obtain the State charter in 1836.....Even according to his admirers, Thaddeus Stevens never met a bank (or railway company) that he did not like; and he especially liked the Bank of the United States. He was also fond of large government building projects which go hand-in-hand with large government debt. By 1838 the debt of Pennsylvania was $24,000,000; at the time when the Federal government owed nothing ]