THIRTY YEARS VIEW
1820 TO 1850
The Panic Session
On the second day of December, 1833, commenced the first session of the Twenty-third Congress, commonly called the Panic session -- one of the most eventful and exciting which the country had ever seen, and abounding with high talent.
Mr. Andrew Stevenson, who had been chosen Speaker of the House for the three succeeding Congresses, was re-elected by a great majorityindicating the administration strength, and his own popularity. The annual message was immediately sent in, and presented a gratifying view of our foreign relationsall nations being in peace and amity with us, and many giving fresh proofs of friendship, either in new treaties formed, or indemnities made for previous injuries. The state of the finances was then adverted to, and shown to be in the most favorable condition. The message said :
It gives me great pleasure to congratulate you upon the prosperous condition of the finances of the country, as will appear from the report which the Secretary of the Treasury will, in due time, lay before you. The receipts into the Treasury during the present year will amount to more than thirty-two millions of dollars. The revenue derived from customs will, it is believed, be more than twenty-eight millions, and the public lands will yield about three millions. The expenditures within the year, for all objects, including two millions five hundred and seventy-two thousand two hundred and forty dollars and ninety-nine cents on account of the public debt, will not amount to twenty-five millions, and a large balance will remain in the Treasury after satisfying all the appropriations chargeable on the revenue for the present year.
The act of the last session, called the compromise, the President recommended to observance, unless it should be found to produce more revenue than the necessities of the government required. The extinction of the public debt presented, in the opinion of the President, the proper occasion for organizing a system of expenditure on the principles of the strictest economy consistent with the public interest; and the passage of the message in relation to that point was particularly grateful to the old friends of an economical administration of the government. It said :
But, while I forbear to recommend any further reduction of the duties, beyond that already provided for by the existing laws, I must earnestly and respectfully press upon Congress the importance of abstaining from all appropriations which are not absolutely required for the public interests, and authorized by the powers clearly delegated to the United States. We are beginning a new era in our government. The national debt, which has so long been a burden on the Treasury, will be finally discharged in the course of the ensuing year. No more money will afterwards be needed than what may be necessary to meet the ordinary expenses of the government. Now then is the proper moment to fix our system of expenditure on firm and durable principles; and I cannot too strongly urge the necessity of a rigid economy, and an inflexible determination not to enlarge the income beyond the real necessities of the government, and not to increase the wants of the government by unnecessary and profuse expenditures. If a contrary course should be pursued, it may happen that the revenue of 1834 will fall short of the demands upon it; and after reducing the tariff in order to lighten the burdens of the people, and providing for a still further reduction to take effect hereafter, it would be much to be deplored if, at the end of another year, we should find ourselves obliged to retrace our steps, and impose additional taxes to meet unnecessary expenditures.
The part of the message; however, which gave the paper uncommon emphasis, and caused it to be received with opposite, and violent emotions by different parts of the community, was that which related to the Bank of the United Statesits believed conditionand the consequent removal of the public deposits from its keeping. The deposits had been removeddone in vacation by the order of the Presidenton the ground of insecurity, as well as of misconduct in the corporation : and as Congress, at the previous session had declared its belief of their safety, this act of the President had already become a point of vehement newspaper attack upon himdestined to be continued in the halls of Congress. His conduct in this removal, and the reasons for it, were thus communicated :
Since the last adjournment of Congress, the Secretary of the Treasury has directed the money of the United States to be deposited in certain State banks designated by him, and he will immediately lay before you his reasons for this direction. I concur with him entirely in the view he has taken of the subject; and, some months before the removal, I urged upon the department the propriety of taking that step. The near approach of the day on which the charter will expire, as well as the conduct of the bank, appeared to me to call for this measure upon the high considerations of public interest and public duty. The extent of its misconduct, however, although known to be great, was not at that time fully developed by proof. It was not until late in the month of August, that I received from the government directors an official report, establishing beyond question that this great and powerful institution had been actively engaged in attempting to influence the elections of the public officers by means of its money; and that, in violation of the express provisions of its charter, it had, by a formal resolution, placed its funds at the disposition of its President, to be employed in sustaining the political power of the bank. A copy of this resolution is contained in the report of the government directors, before referred to; and however the object may be disguised by cautious language, no one can doubt that this money was in truth intended for electioneering purposes, and the particular uses to which it was proved to have been applied, abundantly show that it was so understood. Not only was the evidence complete as to the past application of the money and power of the bank to electioneering purposes, but that the resolution of the board of directors authorized the same course to be pursued in future.
It being thus established, by unquestionable proof, that the Bank of the United States was converted into a permanent electioneering engine, it appeared to me that the path of duty which the Executive department of the government ought to pursue, was not doubtful. As by the terms of the bank charter, no officer but the Secretary of the Treasury could remove the deposits, it seemed to me that this authority ought to be at once exerted to deprive that great corporation of the support and countenance of the government in such a use of its funds, and such an exertion of its power. In this point of the case, the question is distinctly presented, whether the people of the United States are to govern through representatives chosen by their unbiased suffrages, or whether the money and power of a great corporation are to be secretly exerted to influence their judgment, and control their decisions. It must now be determined whether the bank is to have its candidates for all offices in the country, from the highest to the lowest, or whether candidates on both sides of political questions shall be brought forward as heretofore, and supported by the usual means.
At this time, the efforts of the bank to control public opinion, through the distresses of some and the fears of others, are equally apparent, and, if possible, more objectionable. By a curtailment of its accommodations, more rapid than any emergency requires, and even while it retains specie to an almost unprecedented amount in its vaults, it is attempting to produce great embarrassment in one portion of the community, while, through presses known to have been sustained by its money, it attempts, by unfounded alarms, to create a panic in all.
These are the means by which it seems to expect that it can force a restoration of the deposits, and, as a necessary consequence, extort from Congress a renewal of its charter. I am happy to know that, through the good sense of our people, the effort to get up a panic has hitherto failed, and that, through the increased accommodations which the State banks have been enabled to afford, no public distress has followed the exertions of the bank; and it cannot be doubted that the exercise of its power, and the expenditure of its money, as well as its efforts to spread groundless alarm, will be met and rebuked as they deserve. In my own sphere of duty, I should feel myself called on, by the facts disclosed, to order a scire facias against the bank, with a view to put an end to the chartered rights it has so palpably violated, were it not that the charter itself will expire as soon as a decision would probably be obtained from the court of last resort.
I called the attention of Congress to this subject in my last annual message, and informed them that such measures as were within the reach of the Secretary of the Treasury, had been taken to enable him to judge whether the public deposits in the Bank of the United States were entirely safe; but that as his single powers might be inadequate to the object, I recommended the subject to Congress, as worthy of their serious investigation : declaring it as my opinion that an inquiry into the transactions of that institution, embracing the branches as well as the principal bank, was called for by the credit which was given throughout the country to many serious charges impeaching their character, and which, if true, might justly excite the apprehension that they were no longer a safe depository for the public money. The extent to which the examination, thus recommended, was gone into, is spread upon your journals, and is too well known to require to be stated. Such as was made resulted in a report from a majority of the Committee of Ways and Means, touching certain specified points only, concluding with a resolution that the government deposits might safely be continued in the Bank of the United States. This resolution was adopted at the close of the session, by the vote of a majority of the House of Representatives.
The message concluded with renewing the recommendation, which the President had annually made since his first election, in favor of so amending the constitution in the article of the presidential and vice-presidential elections, as to give the choice of the two first officers of the government to a direct vote of the people, and that every intermediate agency in the election of those officers should be removed. This recommendation, like all which preceded it, remained without practical results. For ten year committees had reported amendments, and members had supported them, but without obtaining in Congress the requisite two thirds to refer to proposition of amendment to the vote of the people. Three causes combined always to prevent the concurrence of that majority : 1. The conservative spirit of many, who are unwilling, under any circumstances, to touch an existing institution. 2. The enemies of popular elections, who deem it unsafe to lodge the high power of the presidential election, directly in the hands of the people. 3. The intriguers, who wish to manage these elections for their own benefit, and have no means of doing it except through the agency of intermediate bodies. The most potent of these agencies, and the one in fact which controls all the others, is the one of latest and most spontaneous growth, called conventions originally adopted to supersede the caucus system of nominations, but which retains all the evils of that system, and others peculiar to itself. They are still attended by members of Congress, and with less responsibility to their constituents than when acting in a Congress caucus. A large proportion of the delegates are either self-appointed or so intriguingly appointed, and by such small numbers, as to constitute a burlesque upon popular representation. Delegates even transfer their functions, and make proxiesa prerogative only allowed to peers of the realm, in England, in their parliamentary voting, because they are legislators in their own right, and represent, each one, himself, as his own constituent body, and owing responsibility to no one. They meet in taverns, the delegates of some of the large States, attended by one or two thousand backers, supplied with money, and malting all the public appliances of feasting and speaking, to conciliate or control votes, which ample means and determined zeal can supply, in a case in which a personal benefit is expected. The minority rules, that is to say; baffles the majority until it yields, and consents to a compromise, accepting for that purpose the person whom the minority has held in reserve for that purpose; and this minority of one third, which governs two thirds, is itself usually governed by a few managers. And to complete the exclusion of the people from all efficient control, in the selection of a presidential candidate, an interlocutory committee is generally appointed out of its members to act from one convention to anotherduring the whole interval of four years between their periodical assemblagesto guide and conduct the public mind, in the different States, to the support, of the person on whom they have secretly agreed. After the nomination is over, and the election effected, the managers in these nominations openly repair to the new President, if they have been successful, and demand rewards for their labor, in the shape of offices for themselves and connections. This is the way that presidential elections are now made in the United States; for, a party nomination is an election, if the party is strong enough to make it; and, if one is not, the other is; for, both parties act alike, and thus the mass of the people have no more part in selecting the person who is to be their President than the subjects of hereditary monarchs have in begetting the child who is to rule over them. To such a point is the greatest of our elections now sunk by the arts of intermediate agencies; and it may be safely assumed, that the history of free elective governments affords no instance of such an abandonment, on the part of legal voters, of their great constitutional privileges, and quiet sinking down of the millions to the automaton performance of delivering their votes as the few have directed.
REMOVAL OF THE DEPOSITS FROM THE BANK
OF THE UNITED STATES.
THE fact of this removal was communicated to Congress, in the annual message of the President; the reasons for it, and the mode of doing it, were reserved for a separate communication; and especially a report from the Secretary of the Treasury, to whom belonged the absolute right of the removal, without assignment of any reasons except to Congress, after the act was done. The order for the removal, as it was calledfor it was only an order to the collectors of revenue to cease making their deposits in that bank, leaving the amount actually in it, to be drawn out of intervals, and in different sums, according to the course at the government disbursementswas issued the 22d of September, and signed by Roger B. Taney, Esq., the new Secretary of the Treasury, appointed in place of Mr. Wm. J. Duane, who, refusing to make the removal, upon the request of the President, was himself removed. This measure (the ceasing to deposit the public moneys with the Bank of the United States) was the Presidents own measure, conceived by him, carried out by him, demanded by him, and its fate dependent upon him. He had coadjutors in every part of the business, but the measure was his own; for this heroic civil measure, like a heroic military resolve, had to be the offspring of one great mindself-acting, and poisedseeing its way through all difficulties and dangers; and discerning ultimate triumph over all obstacles in the determination to conquer them, or to perish. Councils are good for safety, not for heroismgood for escapes from perils, and for retreats, but for action, and especially high and daring action, but one mind is wanted. The removal of the deposits was an act of that kindhigh and daring, and requiring as much nerve as any enterprise of arms, in which the President had ever been engaged. His military exploits had been of his own conception; his great civil acts were to be the same : more impeded than promoted by councils. And thus it was in this case. The majority of his cabinet was against him. His Secretary of the Treasury refused to execute his will. A few onlya fraction of the cabinet and some friendsconcurred heartily in the act : Mr. Taney, attorney general, Mr. Kendall, Mr. Francis P. Blair, editor of the Globe; and some few others.
He took his measures carefully and deliberately, and with due regard to keeping himself demonstrably, as well as actually right. Observation had only confirmed his opinion, communicated to the previous Congress, of the misconduct of the institution, and the insecurity of the public moneys in it : and the almost unanimous vote of the House of Representatives to the contrary, made no impression upon his strong conviction. Denied a legislative examination into its affairs, he determined upon an executive one, through inquiries put to the government directors, and the researches into the state of the books, which the Secretary of the Treasury had a right to make. Four of those directors, namely, Messrs. Henry D. Gilpin, John T. Sullivan, Peter Wager, and Hugh McEldery, made two reports to the President, according to the duty assigned them, in which they showed great misconduct in its management, and a great perversion of its funds to undue and political purposes. Some extracts from these report, will show the nature of this report, the names of persons to whom money was paid being omitted, as the only object, in making the extracts, is to show the conduct of the bank, and not to disturb or affect any individuals.
On the 30th November, 1830, it is stated on the minutes, that the president submitted to the board a copy of an article on banks and currency, just published in the American Quarterly Review of this city, containing a favorable notice of this institution, and suggested the expediency of making the views of the author more extensively known to the public than they can be by means of the subscription list. Whereupon, it was, on motion, Resolved, That the president be authorized to take such measures, in regard to the circulation of the contents of the said article, either in whole or in part, as he may deem most for the interests of the bank ? On the 11th March, 1831, it again appears by the minutes that the president stated to the board, that, in consequence of the general desire expressed by the directors, at one of their meetings of the last year, subsequent to the adjournment of Congress, and a verbal understanding with the board, measures had been taken by him, in the course of that year, for furnishing numerous copies of the reports of General Smith and Mr. McDuffie on the subject of this bank, and for widely disseminating their contents through the United States; and that he has since, by virtue of the authority given him by a resolution of this board, on the 30th day of November last, caused a large edition of Mr. Gallatins essay on banks and currency to be published and circulated, in like manner, at the expense of the bank. He suggested, at the same time, the propriety and expediency of extending still more widely a knowledge of the concerns of this institution, by means of the republication of other valuable articles, which had issued from the daily and periodical press. Whereupon, it was, on motion, Resolved, That the president is hereby authorized to cause to be prepared and circulated, such documents and papers as may communicate to the people information, in regard to the nature and operations of the bank.
In pursuance, it is presumed, of these resolutions, the item of stationary and printing was increased, during the first half year of 1831, to the enormous sum of $29,979 92, exceeding that of the previous half year by $23,000, and exceeding the semi-annual expenditure of 1839, upwards of $26,000. The expense account itself, as made up in the book which was submitted to us, contained very little information relative to the particulars of this expenditure, and we are obliged, in order to obtain them, to resort to an inspection of the vouchers. Among other sums, was one of $7,801, stated to have been paid on orders of the president, under the resolution of 11th March, 1831, and the orders themselves were the only vouchers of the expenditure which we found on file. Some of the orders, to the amount of about $1,800, stated that the expenditure was for distributing General Smiths and Mr. McDuffies reports, and Mr. Gallatins pamphlet; but the rest stated generally that it was made under the resolution of 11th of March, 1831. There were also numerous bills and receipts for expenditures to individuals : $1,300 for distributing Mr. Gallatins pamphlet; $1,675.75 for 5,000 copies of General Smiths and Mr. McDuffies reports, &c.; $440 for 11,000 extra papers; of the American Sentinel, $125.74 for printing, folding, packing, and postage on 3,000 extras; $1,830.27 for upwards of 50,000 copies of the National Gazette, and supplements containing addresses to members of the State legislatures, reviews of Mr. Bentons speech, abstracts of Mr. Gallatins article from American Quarterly Review, and editorial aricle on the project of a Treasury Bank; $1,447.75 for 25,000 copies of the reports of Mr. McDuffie and General Smith, and for 25,000 copies of the address to members of the State Legislatures, agreeably to order; $2,850 for 2,000 copies of Gallatin on Banking, and 2,000 copies of Professor Tuckers article.
During the second half year of 1831, the item of stationery and printing was $13,224.87, of which $5,010 were paid on orders of the president, and stated generally to be under the resolution of 11th March, 1831, and other sums were paid to individuals, as in the previous account, for printing and distributing documents.
During the first half year of 1832, the item of stationery and printing was $12,134.16, of which $2,150 was stated to have been paid on orders of the president, under the resolution of 11th March, 1831. There are also various individual payments, of which we noticed $106.38 for one thousand copies of the review of Mr. Bentons speech; $200 for one thousand copies of the Saturday Courier; $1,176 for twenty thousand copies of a pamphlet concerning the bank, and six thousand copies of the minority report relative to the bank; $1,800 for three hundred copies of Clarke & Halls bank book. During the last half year of 1832, the item of stationery and printing rose to $26,543.72, of which $6,350 are stated to have been paid on orders of the president, under the resolution of 11th March, 1831. Among the specified charges we observe $821.78 for printing a review of the veto; $1,371.04 for four thousand copies of Mr. Ewings speech, bank documents, and review of the veto; $4,106.13 for sixty-three thousand copies of Mr. Websters speech, Mr. Adamss and Mr. McDuffies reports, and the majority and minority reports; $295 for fourteen thousand extras of The Protector, containing bank documents; $2,583 50 for printing and distributing reports. Mr. Websters speech, &c. $150 12 for printing the speeches of Messrs. Clay, Ewing, and Smith, and Mr. Adamss report; $1,512 75 to Mr. Clark, for printing Mr. Websters speech and articles on the veto, and $2,422 65 for fifty-two thousand five hundred copies of Mr. Websters speech. There is also a charge of $4,040 paid on orders of the president, stating that it is for expenses in measures for protecting the bank against a run on the Western branches.
During the first half year of 1833, the item of stationery and printing was $9,093 59, of which $2,600 are stated to have been paid on orders of the president, under the resolution of 11th March, 1831. There is also a charge of $800 for printing the report of the exchange committee.
These various items, amounting to about $80,000, all explain themselves by their names and datesevery name of an item referring to a political purpose, and every date corresponding with the impending questions of the recharter and the presidential election; and all charged to the expense account of the banka head of account limited, by the nature of the institution, so far as printing was concerned, to the printing necessary for the conducting of its own business; yet in the whole sum, making the total of $80,000, there is not an item of that kind included. To expose, or correct these abuses, the government directors submitted the following resolution to the board :
Whereas, it appears by the expense account of the bank for the years 1831 and 1832, that upwards of $80,000 were expended and charged under the head of stationery and printing during that period; that a large proportion of this sum was paid to the proprietors of newspapers and periodical journals, and for the printing, distribution, and postage of immense numbers of pamphlets and newspapers; and that about $20,000 were expended under the resolutions of 30th November, 1830, and 11th March, 1831, without any account of the manner in which, or the persons to whom, they were disbursed and whereas it is expedient and proper that the particulars of this expenditure, so large and unusual, which can now be ascertained only by the examination of numerous bills and receipts, should be so stated as to be readily submitted to, and examined by, the board of directors and the stockholders : Therefore, Resolved, That the cashier furnish to the board, at as early a day as possible, a full and particular statement of all these expenditures, designating the sums of money paid to each person, the quantity and names of the documents furnished by him, and his charges for the distribution and postage of the same; together with as full a statement as may be of the expenditures under the resolutions of 30th November, 1830, and 11th March, 1831. That he ascertain whether expenditures of the same character have been made at any of the offices, and if so, procure similar statements thereof, with the authority on which they were made. That the said resolutions be rescinded, and no further expenditures made under the same.
This resolution was rejected by the board, and in place of it another was adopted, declaring perfect confidence in the president of the bank, and directing him to continue his expenditures under the two resolves of November and March according to his discretion;thus continuing to him the power of irresponsible expenditure, both in amount and object, to any extent that he pleased. The reports also showed that the government directors were treated with the indignity of being virtually excluded, both from the transactions of the bank, and the knowledge of them; and that the charter was violated to effect these outrages. As an instance, this is given : the exchange committee was in itself, and even confined to its proper duties, that of buying and selling exchange, was a very important one, having the application of an immense amount of the funds of the bank. While confined to its proper duties, it was changed monthly, and the directors served upon it by turns; so that by the process of rotation and speedy renewal, every member of the directory was kept well informed of the transactions of this committee, and had their due share in all its great operations. But at this time(time of the renewed charter and the presidential Election)both the duties of the committee, and its mode of appointment were altered; discounting of notes was permitted to it, and the appointment of its members was invested in Mr. Biddle; and no government director was henceforth put upon it. Thus, a few directors made the loans in the committees room, which by the charter could only be made by seven directors at the board; and the government directors, far from having any voice in these exchange loans, were ignorant of them until afterwards found on the books. It was in this exchange committee that most of the loans to members of Congress were made, and under whose operations the greatest losses were eventually incurred. The report of the four directors also showed other great misconduct on the part of the bank, one of which was to nearly double its discounts at the approaching termination of the charter, running them up in less than a year and a half from about forty-two and a half to about seventy and a half millions of dollars. General Jackson was not the man to tolerate these illegalities, corruptions and indignities. He, therefore, determined on ceasing to use the institution any longer as a place of deposit for the public moneys; and accordingly communicated his intention to the cabinet, all of whom had been requested to assist him in his deliberations on the subject. The major part of them dissented from his design; whereupon he assembled them on the 22nd of September, and read to them a paper, of which the following are the more essential parts :
President Andrew Jackson's Manifesto Against the Bank.
published in many newspapers of the day
From the Washington Globe, September 23, 1833.
It has been generally known for some months past that the propriety of withdrawing the public deposites from the Bank of the United States was under consideration, and engaged much of the attention of the president and of different members of his cabinet, all of whom had been called upon by the president to assist him in his deliberation on this subject. After a very full and careful examination, the president came to the conclusion that the public deposites ought to be changed to the State Banks, and his opinion was communicated in writing to his cabinet on Wednesday last, at a meeting held specially for that purpose, and the facts and reasons on which it was founded. As public attention has been drawn to this subject, it is deemed proper, in order to prevent misunderstanding or misrepresentation, to lay before the people the communication made by the President as above mentioned, and a copy has been furnished to us for that purpose, which we now proceed to publish:
Read to the cabinet on the 18th of September, 1833.
Having carefully and anxiously considered all the facts and arguments which have been submitted to him, relative to a removal of the public deposits from the Bank of the United States, the President deems it his duty to communicate in this manner to his cabinet the final conclusions of his own mind, and the reasons on which they are founded, in order to put them in durable form, and to prevent misconceptions.
The Presidents convictions of the dangerous tendencies of the Bank of the United States, since signally illustrated by its own acts, were so overpowering when he entered on the duties of chief magistrate, that he felt it his duty, notwithstanding the objections of the friends by whom he was surrounded, to avail himself of the first occasion to call the attention of Congress and the people to the question of its recharter. The opinions expressed in his annual message of December, 1829, were reiterated in those of December, 1830 and 1831, and in that of 1830, he threw out for consideration some suggestions in relation to a substitute. At the session of 1831-32 an act was passed by a majority of both Houses of Congress rechartering the present bank, upon which the President felt it his duty to put his constitutional veto. In his message, returning that act, he repeated and enlarged upon the principles and views briefly asserted in his annual messages, declaring the bank to be, in his opinion, both inexpedient and unconstitutional, and announcing to his countrymen, very unequivocally, his firm determination never to sanction, by his approval, the continuance of that institution or the establishment of any other upon similar principles.
There are strong reasons for believing that the motive of the bank in asking for a recharter at that session of Congress, was to make it a leading question in the election of a President of the United States the ensuing November, and all steps decreed necessary were taken to procure from the people a reversal of the Presidents decision.
Although the charter was approaching its termination, and the bank was aware that it was the intention of the government to use the public deposit as fast as it has accrued, in the payment of the public debt, yet did it extend its loans from January, 1831, to May, 1832, from $42,402,304.24 to $70,428,070.72, being an increase of $28,025,766.48, in sixteen months. It is confidently believed that the leading object of this immense extension of its loans was to bring as large a portion of the people as possible under its power and influence; and it has been disclosed that some of the largest sums were granted on very unusual terms to the conductors of the public press. In some of these cases, the motive was made manifest by the nominal or insufficient security taken for the loans, by the large amounts discounted, by the extraordinary time allowed for payment, and especially by the subsequent conduct of those receiving the accommodations.
Having taken these preliminary steps to obtain control over public opinion, the bank came into Congress and asked a new charter. The object avowed by many of the advocates of the bank, was to put the President to the test, that the country might know his final determination relative to the bank prior to the ensuing election. Many documents and articles were printed and circulated at the expense of the bank, to bring the people to a favorable decision upon its pretensions. Those whom the bank appears to have made its debtors for the special occasion, were warned of the ruin which awaited them, should the President be sustained, and attempts were made to alarm the whole people by painting the depression in the price of property and produce, and the general loss, inconvenience, and distress, which it was represented would immediately follow the re-election of the President in opposition to the bank.
Can it now be said that the question of a recharter of the bank was not decided at the election which ensued ? Had the veto been equivocal, or had it not covered the whole groundif it had merely taken exceptions to the details of the bill, or to the time of its passageif it had not met the whole ground of constitutionality and expediency, then there might have been some plausibility for the allegation that the question was not decided by the people. It was to compel the President to take his stand, that the question was brought forward at that particular time. He met the challenge, willingly took the position into which his adversaries sought to force him, and frankly declared his unalterable opposition to the bank as being both unconstitutional and inexpedient. On that ground the case was argued to the people, and now that the people have sustained the President, notwithstanding the array of influence and power which was brought to bear upon him, it is too late, he confidently thinks, to say that the question has not been decided. Whatever may be the opinions of others, the President considers his re-election as a decision of the people against the bank. In the concluding paragraph of his veto message he said:-- I have now done my duty to my country. If sustained by my fellow-citizens, I shall be grateful and happy; if not, I shall find in the motives which impel me, ample grounds for contentment and peace.
He was sustained by a just people, and he desires to evince his gratitude by carrying into effect their decision, so far as it depends upon him.
Of all the substitutes for the present bank, which have been suggested, none seems to have united any considerable portion of the public in its favor. Most of them are liable to the same constitutional objections for which the present bank has been condemned, and perhaps to all there are strong objections on the score of expediency. In ridding the country of an irresponsible power which has attempted to control the government, care must be taken not to unite the same power with the executive branch. To give a President the control over the currency and the power over individuals now possessed by the Bank of the United States, even with the material difference that he is responsible to the people, would be as objectionable and as dangerous as to leave it as it is. Neither the one nor the other is necessary, and therefore ought not to be resorted to.
On the whole, the President considers it as conclusively settled that the charter of the Bank of the United States will not be renewed, and he has no reasonable ground to believe that any substitute will be established. Being bound to regulate his course by the laws as they exist, and not to anticipate the interference of the legislative power, for the purpose of framing new systems, it is proper for him seasonably to consider the means by which the services rendered by the Bank of the United States are to be performed after its charter shall expire.
The existing laws declare, that "the deposites of the money of the United States, in places in which the said Bank and branches thereof may be established, shall be made in said Bank or branches thereof, unless the Secretary of the Treasury shall at any time otherwise order and direct, in which case the Secretary of the Treasury shall immediately lay before Congress, if in session, and if not, immediately after the commencement of the next session, the reason of such order or direction."
The power of the Secretary of the Treasury over the deposites is unqualified. The provision that he shall report his reasons to Congress, is no limitation. Had it not been inserted, he would have been responsible to Congress, had he made a removal for any other than good reasons, and his responsibility now ceases, upon the rendition of sufficient ones to congress. The only object of the provision, is to make his reasons accessible to Congress, and enable that body the more readily to judge of their soundness and purity, and thereupon to make such further provision by law as the legislative power may think proper in relation to the deposit of the public money. Those reasons may be very diversified. It was asserted by the Secretary of the Treasury, without contradiction, as early as 1817, that he had power "to control the proceedings" of the Bank of the United States at any moment, "by changing the deposites to the State Banks," should it pursue an illiberal course towards those institutions; that "the Secretary of the Treasury will always be disposed to support the credit of the State Banks, and will invariably direct transfers from the deposites of the public money, in aid of their legitimate exertions to maintain their credit;" and he asserted a right to employ the State Banks when the Bank of the United States should refuse to receive on deposite the notes of such State Banks as the public interest required should be received in payment of the public dues. In several instances he did transfer the public deposites to State Banks, in the immediate vicinity of branches, for reasons connected only with the safety of those banks, the public convenience, and the interests of the Treasury.
If it was lawful for Mr. Crawford, the Secretary of the Treasury, at that time, to act on these principles, it will be difficult to discover any sound reason against the application of similar principles in still stronger cases. And it is a matter of surprise that a power which, in the infancy of the bank, was freely asserted as one of the ordinary and familiar duties of the Secretary of the Treasury, should now be gravely questioned, and attempts made to excite and alarm the public mind, as if some new and unheard of power was about to be usurped by the Executive branch of the Government.
It is but a little more than two and a half years to the termination of the charter of the present bank. It is considered as the decision of the country that it shall then cease to exist, and no man, the President believes, has reasonable ground for expectation that any other Bank of the United States will be created by Congress. To the Treasury Department is entrusted the safe keeping and faithful application of the public moneys. A plan of collection different from the present, must therefore be introduced and put in complete operation before the dissolution of the present bank. When shall it be commenced ? Shall no step be taken in this essential concern until the charter expires, and the Treasury finds itself without an agent, its accounts in confusion, with no depository for its funds, and the whole business of the Government deranged? or shall it be delayed until six months, or a year, or two years, before the expiration of the charter ? It is obvious that any new system which may be substituted in the place of the Bank of the United States, could not be suddenly carried into effect on the termination of its existence, without serious inconvenience to the Government and the people. Its vast amount of notes are then to be redeemed and withdrawn from circulation, and its immense debt collected. These operations must be gradual, otherwise much suffering and distress will be brought upon the community. It ought to be not a work of months only, but of years, and the President thinks it cannot, with due attention to the interests of the people, be longer postponed. It is safer to begin it too soon, than to delay it too long.
It is for the wisdom of Congress to decide upon the best substitute to be adopted in the place of the Bank of the United States; and the President would have felt himself relieved from a heavy and painful responsibility, if in the charter to the Bank, Congress had reserved to itself the power of directing, at its pleasure, the public money to be elsewhere deposited, and had not devolved that power exclusively on one of the Executive Departments. It is useless now to inquire why this high and important power was surrendered by those who are peculiarly and appropriately the guardians of the public money. Perhaps it was an oversight. But as the President presumes that the charter to the Bank is to be considered as a contract on the part of the Government, it is not now in the power of Congress to disregard its stipulations; and by the terms of that contract the public money is to be deposited in the Bank, during the continuance of its charter, unless the Secretary of the Treasury shall otherwise direct. Unless, therefore, the Secretary of the Treasury first acts, Congress have no power over the subject, for they cannot add a new clause to the charter, or strike one out of it without the consent of the Bank; and consequently the public money must remain in that institution to the last hour of its existence, unless the Secretary of the Treasury shall remove it at an earlier day.
The responsibility is thus thrown upon the Executive branch of the Government, of deciding how long before the expiration of the charter, the public interest will require the deposites to be placed elsewhere. And, although, according to the frame and principle of our government, this decision would seem more properly to belong to the legislative power, yet as the law has imposed it upon the Executive department, the duty ought to be faithfully and firmly met, and the decision made and executed upon the best lights that can be obtained, and the best judgment that can be formed. It would ill become the Executive branch of the Government to shrink from any duty which the law imposes on it, to fix upon others the responsibility which justly belongs to itself. And, while the President anxiously wishes to abstain from the exercise of doubtful powers, and to avoid all interference with the rights and duties of others, he must yet, with unshaken constancy, discharge his own obligations; and cannot allow himself to turn aside, in order to avoid any responsibility which the high trust with which he has been honoured requires him to encounter; and it being the duty of one of the Executive Departments to decide in the first instance, subject to the future action of the legislative power, whether the public deposites shall remain in the Bank of the United States until the end of its existence or be withdrawn some time before, the President has felt himself bound to examine the question carefully and deliberately in order to make up his judgment on the subject; and in his opinion the near approach of the termination of the charter, and the public considerations heretofore mentioned, are of themselves amply sufficient to justify the removal of the deposites without reference to the conduct of the Bank, or their safety in its keeping.
But in the conduct of the bank may be found other reasons, very imperative in their character, and which require prompt action. Developments have been made from time to time of its faithlessness as a public agent, its misapplication of public funds, its interference in elections, its efforts, by the machinery of committees, to deprive the government directors of a full knowledge of its concerns, and above all, its flagrant misconduct as recently and unexpectedly disclosed, in placing all the funds of the bank, including the money of the government, at the disposition of the president of the bank; as means of operating upon public opinion and procuring a new charter without requiring him to render a voucher for their disbursement. A brief recapitulation of the facts which justify these charges and which have come to the knowledge of the public and the President, will, he thinks, remove every reasonable doubt as to the course which it is now the duty of the President to pursue.
We have seen that in sixteen months, ending in May, 1832, the bank had extended its loans more than $28,000,000, although it knew the government intended to appropriate most of its large deposit during that year in payment of the public debt. It was in May, 1832, that its loans arrived at the maximum, and in the preceding March; so sensible was the bank that it would not be able to pay over the public deposit when it would be required by the government, that it commenced a secret negotiation without the approbation or knowledge of the government, with the agents, for about $2,700,000 of the three per cent. stocks held in Holland, with a view of inducing them not to come forward for payment for one or more years after notice should be given by the Treasury Department. This arrangement would have enabled the bank to keep and use during that time the public money set apart for the payment of these stocks.
After this negotiation had commenced, the Secretary of the Treasury informed the Bank, that it was his intention to pay off one half of the three per cents, on the first of the succeeding July, which amounted to about $6,500,000. The president of the Bank, although the committee of investigation was then looking into its affairs at Philadelphia, came immediately to Washington, and upon representing that the Bank was desirous of accommodating the importing merchants at New York, (which it failed to do) and undertaking to pay the interest itself, procured the consent of the Secretary, after consultation with the President, to postpone the payment until the succeeding first of October.
Conscious that at the end of that quarter, the Bank would not be able to pay over the deposites, and that further indulgence was not to be expected of the Government, an agent was despatched to England secretly to negociate with the holders of the public debt in Europe, and induce them by the offer of an equal or higher interest than that paid by the Government to hold back their claims for one year, during which the Bank expected thus to retain the use of $5,000,000 of public money, which the Government should set apart for the payment of that debt. The agent made an arrangement on terms in part, which were in direct violation of the charter of the Bank, and when some incidents connected with this secret negociation accidentally came to the knowledge of the public and the Government, then and not before, so much of it as was palpably in violation of the charter was disavowed. A modification of the rest was attempted, with the view of getting the certificates without payment of the money, and thus absolving the Government from its liability to the holders. In this scheme the Bank was particularly successful, but to this day the certificates of a portion of these stocks have not been paid, and the Bank retains the use of the money.
This effort to thwart the Government in the payment of the public debt, that it might retain the public money to be used for their private interests, palliated by pretences notoriously unfounded and insincere, would have justified the instant withdrawal of the public deposites. The negotiation itself rendered doubtful the ability of the Bank to meet the demands of the Treasury, and the misrepresentations by which it was attempted to be justified, proved that no reliance could be placed upon its allegations.
If a question of the removal of the deposites presented itself to the Executive in the same attitude that it appeared before the House of Representatives at their last session, their resolution in relation to the safety of the deposites would be entitled to more weight, although the decision of the question of removal has been confided by law to another department of the Government. But the question now occurs, attended by other circumstances, and new disclosures of the most serious import. It is true that in the message of the President, which produced this inquiry and resolution on the part of the House of Representatives, it was his object to obtain the aid of that body in making a thorough examination into the conduct and condition of the Bank and its branches, in order to enable the Executive Department to decide whether the public money was longer safe in its hands.
The limited power of the Secretary of the Treasury over the subject, disabled him from making the investigation as fully and satisfactorily as it could be done by a committee of the House of Representatives, and hence the President desired the assistance of Congress to obtain for the Treasury Department, a full knowledge of all the facts which were necessary to guide his judgment. But it was not his purpose, as the language of his message will show, to ask the Representatives of the people to assume a responsibility which did not belong to them, and relieve the executive branch of the Government from the duty which the law had imposed upon it. It is due to the President, that his object in that proceeding should be distinctly understood, and that he should acquit himself of all suspicion of seeking to escape from the performance of his own duties, or of desiring to interpose another body between himself and the people, in order to avoid a measure which he is called upon to, meet But although, as an act of justice to himself, he disclaims any design of soliciting the opinion of the House of Representatives in relation to his own duties, in order to shelter himself from, responsibility under the sanction of their counsel, yet he is at all times ready to listen to the suggestions of the Representatives of the people, whether given voluntarily or upon solicitation, and to consider them with the profound respect to which all will admit that they are justly entitled. Whatever may be the consequences, however, to himself, he must finally form his own judgment where the Constitution and the law makes it his duty to decide, and must act accordingly; and he is bound to suppose that such a course on his part will never be regarded by that elevated body as a mark of disrespect to itself; but that they will, on the contrary, esteem it the strongest evidence he can give, of his fixed resolution conscientiously to discharge his duty to them and the country.
A new state of things has, however, arisen since the close of the last session of Congress, and evidence has since been laid before the President, which he is persuaded would have led the House of Representatives to a different conclusion, if it had come to their knowledge. The fact that the Bank controls, and in some cases substantially owns, and by its money supports some of the leading presses of the country, is now more clearly established. Editors to whom it loaned extravagant sums in 1831 and 1832, on unusual time and nominal security, have since turned out to be insolvent, and to others apparently in no better condition accommodations still more extravagant, on terms more unusual and sometimes without any security, have also been heedlessly granted.
The allegation which has so often circulated through these channels that the Treasury was bankrupt and the Bank was sustaining it, when, for many years there has not been less, on an average, than six millions of public money in that institution, might be passed over as a harmless misrepresentation; but when it is attempted, by substantial acts, to impair the credit of the Government and tarnish the honour of the country, such charges require more serious attention. With six millions of public money in its vaults, after having had the use of from five to twelve millions for nine years; without interest, it became the purchaser of a bill drawn by our Government on that of France for about nine hundred thousand dollars, being the first instalment of the French indemnity. The purchase money was left in the use of the Bank, being simply added to the Treasury deposite. The Bank sold the bill in England, and the holder sent it to France for collection, and arrangements not having been made by the French Government for its payment it was taken up by the agents of the Bank in Paris with the funds of the Bank in their hands. Under these circumstances it has, through its organs, openly assailed the credit of the Government; and has actually made, and persists in a demand of fifteen per cent., or $158,842.77 as damages, when no damage, or none beyond some trifling expense, has in fact been sustained, and when the Bank had in its own possession on deposite, several millions of the public money which it was then using for its own profit. Is a fiscal agent to the Government, which thus seeks to enrich itself at the expense of the public, worthy of further trust ?
There are other important facts not in the contemplation of the House of Representatives, or not known to the members at the time they voted for the resolution.
Although the charter and the rules of the bank, both, declare that not less than seven directors shall be necessary to the transaction of business, yet, the most important business, even that of granting discounts to any extent, is entrusted to a committee of five members who do not report to the board.
To cut off all means of communication with the government, in relation to its most important acts, at the commencement of the present year, not one of the government directors was placed on any one committee. And although since, by an unusual remodelling of those bodies, some of those directors have been placed on some of the committees, they are yet entirely excluded from the committee of exchange, through which the greatest and most objectionable loans have been made.
When the government directors made an effort to bring back the business of the bank to the board, in obedience to the charter and the existing regulations, the board not only overruled their attempt, but altered the rule so as to make it conform to the practice, in direct violation of one of the most important provisions of the charter which gave them existence.
It has long been known that the president of the bank, by his single will, originates and executes many of the most important measures connected with the management and credit of the bank, and that the committee, as well as the board of directors, are left in entire ignorance of many acts done, and correspondence carried on, in their names, and apparently under their authority. The fact has been recently disclosed, that an unlimited discretion has been, and is now, vested in the president of the bank to expend its funds in payment for preparing and circulating articles, and purchasing pamphlets and newspapers, calculated by their contents to operate on elections and secure a renewal of its charter. The fact has been recently disclosed, that an unlimited discretion has been, and is now, vested in the president of the Bank to expend its funds in payment for preparing and circulating articles and purchasing pamphlets and newspapers, calculated by their contents to operate on elections and secure a renewal of its charter. It appears from the official report of the Public Directors, that, on the 30th November, 1830, the president submitted to the Board an article published in the American Quarterly Review, containing favourable notices of the Bank, and suggested the expediency of giving it a wider circulation at the expense of the Bank; whereupon the Board passed the following resolution, viz:"Resolved, That the president be authorized to take such measures in regard to the circulation of the contents of the said article, either in whole or in part, as he may deem most for the interest of the Bank."
By an entry in the minutes of the Bank, dated March 11th, 1831, it appears that the president had not only caused a large edition of that article to be issued, but had also, before the resolution of 30th November was adopted, procured to be printed and widely circulated, numerous copies of the reports of Gen. Smith and Mr. M'Duffie in favour of the Bank, and on that day he suggested the expediency of extending his power to the printing of other articles which might subserve the purposes of the institution. Whereupon the following resolution was adopted, viz:"Resolved, That the president is hereby authorized to cause to be prepared and circulated, such documents and papers as may communicate to the people information in regard to the nature and operations of the Bank."
The expenditures purporting to have been made under authority of these resolutions, during the years 1831 and 1832, were about $80,000. For a portion of these expenditures vouchers were rendered, from which it appears that they were incurred in the purchase of some hundred thousand copies of newspapers, reports and speeches, made in Congress; reviews of the Veto Message and reviews of speeches against the Bank, &c. &c. For another large portion no vouchers whatever were rendered, but the various sums were paid on orders of the president of the Bank, making reference to the resolutions of the 11th March, 1831.
On ascertaining these facts, and perceiving that expenditures of a similar character were still continued, the Government Directors a few weeks ago offered a resolution in the Board, calling for a specific account of these expenditures, showing the objects to which they had been applied, and the persons to whom the money had been paid. This reasonable proposition was voted down.
They also offered a resolution rescinding the resolutions of November, 1830, and March, 1831. This also was rejected.
Not content with thus refusing to recall the obnoxious power, or even to require such an account of the expenditure as would show whether the money of the Bank had in fact been applied to the objects contemplated by those resolutions, as obnoxious as they were, the Board renewed the power already conferred, and even enjoined renewed attention to its exercise, by adopting the following in lieu of the propositions submitted by the Government Directors, viz:"Resolved, That the Board have confidence in the wisdom and integrity of the president, and in the propriety of the resolutions of 30th November, 1830, and 11th March, 1831, and entertain a full conviction of the necessity of a renewed attention to the object of those resolutions, and that the president be authorized and requested to continue his exertions for the promotion of said object."
Taken in connexion with the nature of the expenditures heretofore made, as recently disclosed, which the Board not only tolerate but approve, this resolution puts the funds of the Bank at the disposition of the president for the purpose of employing the whole press of the country in the service of the Bank, to hire writers and newspapers, and to pay out such sums as he pleases, to what persons and for what purposes he pleases, without the responsibility of rendering any specific account. The Bank is thus converted into a vast electioneering engine, with means to embroil the country in deadly feuds, and, under cover of expenditures, in themselves improper, extend its corruption through all the ramifications of society.
Some of the items for which accounts have been rendered, show the construction which has been given to the resolutions and the way in which the power it confers has been exerted. The money has not been expended merely in the publication and distribution of speeches, reports of committees, or articles written for the purpose of showing the constitutionality or usefulness of the Bank. But publications have been prepared and extensively circulated, containing the grossest invectives against the officers of the Government; and the money which belongs to the stockholders and to the public, has been freely applied in efforts to degrade, in public estimation, those who were supposed to be instrumental in resisting the wishes of this grasping and dangerous institution. As the president of the Bank has not been required to settle his accounts, no one but himself yet knows how much more than the sum already mentioned may have been squandered, and for which a credit may hereafter be claimed in his account under this most extraordinary resolution.
With these facts before us, can we be surprised at the torrent of abuse incessantly poured out against all who are supposed to stand in the way of the cupidity or ambition of the Bank of the United States ? Can we be surprised at sudden and unexpected changes of opinion in favour of an institution which has millions to lavish, and avows its determination not to spare its means when they are necessary to accomplish its purposes ? The refusal to render an account of the manner in which a part of the money expended has been applied, gives just cause for the suspicion that it has been used for purposes which is not deemed prudent to expose to the eyes of an intelligent and virtuous people. Those who act justly do not shun the light, nor do they refuse explanations when the propriety of their conduct is brought into question.
With these facts before him, in an official report from the government directors, the President would feel that he was not only responsible for all the abuses and corruptions the bank has committed, or may commit, but almost an accomplice in a conspiracy against that government which he has sworn honestly to administer, if he did not take every step, within his constitutional and legal power, likely to be efficient in putting an end to these enormities. If it be possible, within the scope of human affairs, to find a reason for removing the government deposits, and leaving the bank to its own resource for the means of effecting its criminal designs, we have it here. Was it expected, when the moneys of the United States were directed to be placed in that bank, that they would be put under the control of one man, empowered to spend millions without rendering a voucher or specifying the object ? Can they be considered safe, with the evidence before us that tens of thousands have been spent for highly improper if not corrupt, purposes, and that the same motive may lead to the expenditure of hundreds of thousands and even millions more ? And can we justify ourselves to the people by longer lending to it the money and power of the government, to be employed for such purposes ?
It has been alleged by some as an objection to the removal of the deposites, that the Bank has the power, and in that event, will have the disposition, to destroy the State Banks employed by the Government, and bring distress upon the country. It has been the fortune of the President to encounter dangers which were represented as equally alarming, and he has seen them vanish before resolution and energy. Pictures equally appalling were paraded before him when this Bank came to demand a new charter. But what was the result ? Has the country been ruined, or even distressed ? Was it evermore prosperous than since that act ? The President verily believes the Bank has not the power, to produce the calamities its friends threaten. The funds of the Government will not be annihilated by being transferred. They will immediately be issued for the benefit of trade, and if the Bank of the United States curtails its loans, the State Banks, strengthened by the public deposites, will extend theirs. What comes in through one Bank, will go out through others, and the equilibrium will be preserved. Should the Bank, for the mere purpose of producing distress, press its debtors more heavily than some of them can bear, the consequences will recoil upon itself, and in the attempts to embarrass the country, it will only bring loss and ruin upon the holders of its own stock. But if the President believed the Bank possessed all the power which has been attributed to it, his determination would be only rendered the more inflexible. If, indeed, this corporation now holds in its hands the happiness and prosperity of the American people, it is high time to take the alarm. If the despotism be already upon us, and our only safety is in the mercy of the despot, recent developements in relation to his designs and the means he employs, show how necessary it is to shake it off. The struggle can never come with less distress to the people, or under more favourable auspices than at the present moment.
All doubt as to the willingness of the State Banks to undertake the service of the Government, to the same extent, and on the same terms, as it is now performed by the Bank of the United States, is put to rest by the report of the agent recently employed to collect information; and from that willingness, their own safety in the operation may be confidently inferred. Knowing their own resources better than they can be known by others, it is not to be supposed that they would be willing to place themselves in a situation which they cannot occupy without danger of annihilation or embarrassment. The only consideration applies to the safety of the public funds, if deposited in those institutions. And when it is seen that the directors of many of them are not only willing to pledge the character and capital of the corporations in giving success to this measure, but also their own property and reputation, we cannot doubt that they, at least, believe the public deposites would be safe in their management. The President thinks that these facts and circumstances afford as strong a guarantee as can be had in human affairs, for the safety of the public funds and the practicability of a new system of collection and disbursement through the agency of the State Banks.
From all these considerations the President thinks that the State Banks ought immediately to be employed in the collection and disbursement of the public revenue; and the funds now in the Bank of the United States drawn out with all convenient despatch. The safety of the public moneys, if deposited in the State Banks, must be secured beyond all reasonable doubts; but the extent and nature of the security, in addition to their capital, if any be deemed necessary, is a subject of detail to which the Treasury Department will undoubtedly give its anxious attention. The Banks to be employed must remit the moneys of the Government without charge, as the Bank of the United States now does; must render all the services which that Bank now performs; must keep the Government advised of their situation by periodical returns; in fine, in any arrangement with the State Banks, the Government must not, in any respect, be placed upon a worse footing than it now is. The President is happy to perceive by the report of the agent, that the Banks which he has consulted have, in general, consented to perform the service on these terms, and that those in New York have further agreed to make payments in London without other charge than the mere cost of the bills of exchange.
It should also be enjoined upon any Banks which may be employed, that it will be expected of them to facilitate domestic exchanges for the benefit of internal commerce; to grant all reasonable facilities to the payers of the revenue; to exercise the utmost liberality towards the other state banks; and do nothing uselessly to embarrass the Bank of the United States.
As one of the most serious objections to the bank of the United States, is the power which it concentrates, care must be taken in finding other agents for the service of the Treasury not to raise up another power equally formidable. Although it would probably be impossible to produce such a result by any organization of the State Banks which could be devised -- yet it is desirable to avoid even the appearance. To this end it would be expedient to assume no more power over them, and interfere no more in their affairs than might be absolutely necessary to the security of the public deposite, and the faithful performance of their duties as agents of the Treasury. Any interference by them in the political contests of the country, with a view to influence elections, ought, in the opinion of the President, be followed by an immediate discharge from the public service.
It is the desire of the President that the control of the Banks and the currency shall as far as possible be entirely separated from the political power of the country, as well as wrested from an institution which has already attempted to subject the government to its will. In his opinion the action of the General Government on this subject, ought not to extend beyond the grant in the Constitution, which only authorizes Congress "to coin money and regulate the value thereof;" all else belongs to the States and the people, and must be regulated by public opinion and the interests of trade.
In conclusion, the President must be permitted to remark that he looks upon the pending question as of higher consideration than the mere transfer of a sum of money from one bank to another. Its decision may affect the character of our government for ages to come. Should the bank be suffered longer to use the public moneys, in the accomplishment of its purposes, with the proof of its faithlessness and corruption before our eyes, the patriotic among our citizens will despair of success in struggling against its power; and we shall be responsible for entailing it upon our country for ever. Viewing it as a question of transcendent importance, both in the principles and consequences it involves, the President could not, in justice to the responsibility which he owes to the country, refrain from pressing upon the Secretary of the Treasury his view of the considerations which impel to immediate action. Upon him has been devolved, by the constitution and the suffrages of the American people, the duty of superintending the operation of the Executive departments of the governments, and seeing that the laws are faithfully executed. In the performance of this high trust, it is his undoubted right to express to those whom the laws and his own choice have made his associates in the administration of the government, his opinion of their duties, under circumstances, as they arise. It is this right which he now exercises. Far be it from him to expect or require that any member of the cabinet should, at his request, order, or dictation, do any act which he believes unlawful, or in his conscience condemns. From them, and from his fellow-citizens in general, he desires only that aid and support which their reason approves and their conscience sanctions.
In the remarks he has made on this all-important question, he trusts the Secretary of the Treasury will see only the frank and respectful declarations of the opinions which the President has formed on a measure of great national interest, deeply affecting the character and usefulness of bis administration; and not a spirit of dictation, which the President would be as careful to avoid, as ready to resist. Happy will he be, if the facts now disclosed produce uniformity of opinion and unity of action among the members of the administration.
The President again repeats that he begs his cabinet to consider the proposed measure as his own, in the support of which he shall require no one of them to make a sacrifice of opinion or principle. Its responsibility has been assumed, after the most mature deliberation and reflection, as necessary to preserve the morals of the people, the freedom of the press, and the purity of the elective franchise, without which, all will unite in saying that the blood and treasure expended by our forefathers, in the establishment of our happy system of government, will have been vain and fruitless. Under these convictions, he feels that a measure so important to the American people cannot be commenced too soon; and he, therefore, names the first day of October next as a period proper for the change of the deposits, or sooner, provided the necessary arrangements with the State banks can be made.
I was in the State of Virginia, when the Globe newspaper arrived, towards the end of September, bringing this paper, which the President had read to his cabinet, and the further information that he had carried his announced design into effect. I felt an emotion of the moral sublime at beholding such an instance of civic heroism. Here was a President, not bred up in the political profession, taking a great step upon his own responsibility from which many of his advisers shrunk; and magnanimously, in the act itself, releasing all from the peril that he encountered; and boldly taking the whole upon himself. I say peril; for if the bank should conquer, there was, an end to the political prospects of every public man concurring in the removal. He believed the act to be necessary; and, believing that, he did the actleaving the consequences to God and the country. I felt that a great blow had been struck, and that a great contest must come on, which could only be crowned with success by acting up to the spirit with which it had commenced. And I repaired to Washington at the approach of the session with a full determination to stand by the President, which I believed to be standing by the country; and to do my part in justifying his conduct, and in exposing and resisting the powerful combination which it was certain would be formed against him.
---[Senator John Calhoun's retort to Roger Taney's unsatisfactory and insufficient reasons given for removing the deposites]
Report of the Secretary of the Treasury, Roger Brooke Taney, on the removal of the public deposites from the Bank of the United States -- made to both Houses of Congress, December 4th, 1833.
Treasury Department, December 3d, 1833.
SIR:-- In pursuance of the power reserved to the Secretary of the Treasury, by the act of Congress, entitled, "an act to incorporate the subscribers to the bank of the United States," I have directed, that the deposites of the money of the United States shall not be made in the said bank, or branches thereof, but in certain state banks, which have been designated for that purpose. And I now proceed to lay before Congress the reasons which induced me to give this order and direction.
The sixteenth section of the law above mentioned, is in the following words:And be it further enacted, That the deposits of the money of the United States, in places in which the said bank and branches thereof may be established, shall be made in said bank or branches thereof, unless the Secretary of the Treasury shall at any time otherwise order and direct; in which case the Secretary of the Treasury shall immediately lay before Congress, if in session, and if not, immediately after the commencement of the next session, the reasons of such order or direction.
It has been settled by repeated adjudications, that a charter granted by a State to a corporation like that of the bank of the United States, is a contract between the sovereignty which grants it, and the stockholders. The same principles must apply to a charter granted by the United States, and consequently the act incorporating the bank is to be regarded as a contract between the United States of the one part and the stockholders of the other; and by the plain terms of this contract, as contained in the section above quoted, the stockholders have agreed, that the power reserved to the Secretary over the deposites shall not be restricted to any particular contingencies, but be absolute and unconditional as far as their interests are involved in the removal. The order, therefore, of the Secretary of the Treasury, directing the public money to be deposited elsewhere, can in no event be regarded as a violation of the contract with the stockholders, nor impair any right secured to them by the charter.
The Treasury Department being entrusted with the administration of the finances of the country, it was always the duty of the secretary, in the absence of any legislative provision on the subject, to take care that the public money was deposited in safe keeping, in the hands of faithful agents, and in convenient places, ready to be applied according to the wants of the government. The law incorporating the bank has reserved to him, in its full extent, the power he before possessed. It does not confer on him a new power, but reserves to him his former authority, without any new limitation. The obligation to assign the reasons for his direction to deposite the money of the United States elsewhere, cannot be considered as a restriction of the power, because the right of the secretary to designate the place of deposite was always necessarily subject to the control of Congress. And as the Secretary of the Treasury presides over one of the executive departments of the Government, and his power over this subject forms a part of the executive duties of his office, the manner in which it is exercised must be subject to the supervision of the officer to whom the Constitution has confided the whole executive power, and has required to take care that the laws be faithfully executed.
The faith of the United States is, however, pledged, according to the terms of the section above stated, that the public money shall be deposited in this bank, unless "the Secretary of the Treasury shall otherwise order and direct." And as this agreement has been entered into by Congress, in behalf of the United States, the place of deposite could not be changed by a legislative act, without disregarding a pledge, which the legislature has given; and the money of the United States must therefore continue to be deposited in the Bank, until the last hour of its existence, unless it shall be otherwise ordered by the authority mentioned in the charter. The power over the place of deposite for the public money would seem properly to belong to the legislative department of the Government, and it is difficult to imagine why the authority to withdraw it from this Bank was confided exclusively to the executive. But the terms of the Charter appear to be too plain to admit of question: and although Congress should be satisfied that the public money was not safe in the care of the Bank, or should be convinced that the interests of the people of the United States imperiously demanded the removal, yet the passage of a law directing it to be done, would be a breach of the agreement into which they have entered.
Assuming this to be the true construction of the charter to the Bank, it must be the duty of the Secretary of the Treasury to withdraw the deposites of the public money from that institution, whenever the change would in any degree promote the public interest. It is not necessary that the deposites should be unsafe in order to justify the removal. The authority to remove is not limited to such a contingency. The Bank may be perfectly solvent, and prepared to meet promptly all demands upon it. It may have been faithful in the performance of its duties, and yet the public interest may require the deposites to be withdrawn. And as that cannot be done without the action of this department, the Secretary of the Treasury would betray the trust confided to him, if he did not cause the depsoites to be made elsewhere, whenever the charge would advance the public interests, or public convenience. The safety of the deposites --the ability of the Bank to meet its engagements--its fidelity in the performance of its obligations-- are only a part of the considerations by which his judgment must be guided. The general interest and convenience o the people must regulate his conduct.
This principle was distinctly asserted by Mr. Crawford when he was Secretary of the Treasury, soon after the Bank obtained its charter. In a postscript to his letter to the president of the Mechanics' Bank of New York, dated February 13th, 1817, he says:"The Secretary of the Treasury will always be disposed to support the credit of the State banks, and will invariably direct transfers from the deposites of the public money in aid of their legitimate exertions to maintain their credit. But as the proposition of the Bank of the United States excludes the idea of pressure on its part, no measure of that nature appears to be necessary at this time."
Other passages in the correspondence of Mr. Crawford with the banks, about the period above mentioned, might be referred to, equally indicating the same opinion; and at that day no doubt seems to have been entertained of the power or of the duty of the Secretary in relation to this subject. It does not appear to have been then even suggested, that the right of removal depended on the solvency of the Bank, or the safety of the public money committed to its custody. On the contrary, in the passage above quoted, the superior safety of the State banks is by no means regarded as necessary to give him the right to make the transfer to them.
For he declares that he will give the deposites to the State banks, on account of their weakness, and to protect them from the Bank of the United States, if by means of its superior strength, it sought to oppress them. Nor can any distinction be taken between the transfer of a part and the transfer of the whole sum, remaining on deposits. The language of the charter recognises no such distinction, and the principles asserted by Mr. Crawford would have led him to the removal of the whole amount of the public money to the State banks, if a pressure on the part of the Bank of the United States had rendered such a measure necessary, in order to support the State banks in their legitimate exertions to maintain their credit.
The language of the law, therefore, and the usage and practice of the government under it, establish the following principles.
1st. That the power of removal was intended to be reserved exclusively to the Secretary of the Treasury, and that according to the stipulations in the charter, Congress could not direct it to be done.
2d. That the power reserved to the Secretary of the Treasury, does not depend for its exercise merely on the safety of the public money in the hands of the Bank, nor upon the fidelity with which it has conducted itself; but he has the right to remove the deposites, and it is his duty to remove them, whenever the public interest or convenience will be promoted by the change.
Taking these two principles as unquestionable, I proceed to state the reasons which induced me to believe that it was necessary for the interest and convenience of the people that the Bank of the United States should cease to be the depository of the public money.
The charter of the Bank will expire according to the existing law on the subject, on the third of March, 1836; and for two years after the termination of the charter, it is authorized to use the corporate name for the final settlement and liquidation of the affairs and accounts of the corporation, and for the sale and disposition of their estate--but not for any other purpose. It is the duty of the executive departments of the Government to exercise the powers conferred on them, and to regulate the discretion confided to them, according to the existing laws and they cannot be allowed to speculate on the chances or future changes by the legislative authority.
Perhaps there may be cases, in which the discretion vested in an executive department might with propriety be in some degree influenced by the expectation of future legislation. But they must be cases in which the principles of justice, or the public interest manifestly call for an alteration of the law, or where some expression of the public opinion has strongly indicated that a change will probably be made. But where nothing of this kind exists, an executive officer of the Government is not authorised to regulate a discretion, which the law has entrusted to him, upon the assumption that the law will be changed.
In deciding upon the course which it was my duty to pursue in relation to the deposits, I did not feel myself justified in anticipating the renewal of the character on either of the above mentioned grounds. It is very evident that the Bank has no claim to renewal, founded on the justice of Congress. For, independently of the many serious and insurmountable objections which its own conduct has furnished, it cannot be supposed that the grant to this corporation of exclusive privileges, at the expense of the rest of the community, for twenty years, can give it a right to demand the still farther enjoyment of its profitable monopoly.
Neither could I act upon the assumption that the public interest required the recharter of the Bank, because I am firmly persuaded that the 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.
The manifestations of public opinion, instead of being favorable to a renewal, have been decidedly to the contrary, and I have always regarded the result of the last election of the President of the United States, as the declaration of a majority of the people that the charter ought not to be renewed. It is not necessary to state here, what is now a matter of history. The question of the renewal of the charter was introduced into the election by the corporation itself. Its voluntary application to Congress for the renewal of its charter four years before it expired, and upon the eve of the election of President was understood on all sides as bringing forward that question for incidental decision at the then approaching election. It was accordingly argued on both sides, before the tribunal of the people, and their verdict pronounced against the Bank, by the election of the candidate who was known to have been always inflexibly opposed to it.
Under these circumstances, I could not have been justified, upon either of the grounds above mentioned, in anticipating any change in the existing laws in relation to the Bank; and as the act of Congress which created the corporation, limits its duration to the third of March, 1836, it became my duty, as Secretary of the Treasury, in executing the trust confided to me, under the law, to look to that period of time as the termination of its corporate existence. I had no sufficient grounds for presuming that the law would be altered in this respect, by future legislation, and a new charter be granted to the Bank. It was, therefore, incumbent upon me, in discharging my official duties, to act upon the assumption that this corporation would not continue in being after the time above specified. And in this state of things, without any reference to the manner in which the Bank had conducted itself, it became necessary to decide whether the deposites ought to remain in the Bank until the end of its corporate life, or be removed at some earlier period. In forming my opinion on this subject, I could only inquire which of these measures would most conduce to the public good.
It is obvious, that the interests of the country would not be protected by permitting the deposites of the public money to continue in the bank until its charter expired. Judging from the past, it is highly probable that they will always amount to several millions of dollars. It would evidently produce serious inconvenience if such a large sum were left in possession of the bank until the last moment of its existence; and then be suddenly withdrawn, when its immense circulation is returning upon it to be redeemed, and its private depositors removing their funds into other institutions. The ability of the bank, under such circumstances, to be prompt in its payments to the government, may be well doubted, even if the ultimate safety of the deposites could be relied upon. Besides the principal circulating medium now in the hands of the people, and the one most commonly used in the exchanges between distant places, consists of the notes of the Bank of the United States and its numerous branches. The sudden withdrawal of its present amount of circulation, or its sudden depreciation, before any other sound and convenient currency was substituted for it, would certainly produce extensive evils, and be sensibly felt among all classes of society.
It is well understood that the superior credit heretofore enjoyed by the notes of the Bank of the United States, was not founded on any particular confidence in its management or solidity. It was occasioned altogether by the agreement on behalf of the public in the act of incorporation, to receive them in all payments to the United States; and it was this pledge on the part of the Government which gave general currency to the notes payable at remote branches. The same engagement, in favor of any other moneyed institution, would give its notes equal credit, and make them equally convenient for the purposes of commerce. But this obligation on the part of the United States, will cease on the 3d of March 1836, when the charter expires; and as soon as this happens, all the outstanding notes of the Bank will lose the peculiar value they now possess, and the notes payable at distant places become as much depreciated as the notes of local banks. And if, in the mean time, no other currency is substituted in its place, by common consent, it is easy to foresee the extent of the embarrassment which would be caused by the sudden derangement of the circulating medium. It would be too late at that time, to provide a substitute, which would ward off the evil.
The notes of the bank of the U. States in circulation on the second of September last, which was the date of the latest return before me when the order for removal was given, amounted to $18,413,287.07, scattered in every part of the United States. And if a safe and sound currency were immediately provided, on the termination of the charter, to take the places of these notes, it would still require time to bring it into general use, and in the interim, the people would be subjected to all the inconveniences and losses which necessarily arise from an unsound state of the currency. The evil would be so great and the distress so general, that it might even compel Congress, against its wishes, to recharter the Bank: and perhaps more effectual means could hardly be devised for insuring the renewal of the charter.
It is evident that a state of things so much to be deprecated can only be avoided by timely preparation, and the continuance of the deposites can only be justified by the determination to renew the charter. The State banks can, I have no doubt, furnish a general circulating medium, quite as uniform in value, as that which has been afforded by the Bank of the United States. Probably more so. For it is well known, that in some of the cities, the branches of the Bank have been in the habit, whenever they thought proper, of refusing to honor the notes of their own bank, payable at other branched, when they were not offered in discharge of a debt due to the United States. --But a currency founded on the notes of State banks could not be suddenly substituted for that heretofore furnished by the Bank of the United States, and take the place of it at the same moment, in every part of the Union. It is essential that the change should be gradual, and sufficient time should be allowed to suffer it to make its way by the ordinary operations of commerce, without requiring a hasty and violent effort.
In this view of the subject, it would be highly injudicious to suffer the deposites to remain in the Bank of the United States, until the close of its corporate existence. And as they cannot be withdrawn without the action of the Secretary of the Treasury, it must unavoidably become his duty at some period of time, to exercise the power of removal. Laying aside, therefore, for the present, all the considerations which the misconduct of the Bank has furnished, the question presented to this Department was how long could the removal be delayed consistently with the public interest ? It is a question of time only. The duty must be performed at some period; and could not be altogether omitted, without justly incurring a heavy responsibility to the community, for all the consequences that might follow. And it is, I think, apparent that the measure was delayed as long as was compatible with the interests of the people of the United States.
The monthly statement of the Bank, of the second of Sept. last, before referred to, shows that the notes of the Bank, and its breaches, then in circulation amounted to $18,413,287.07, and that its discounts amounted to the sum of $62,653,359.59. The immense circulation above stated, pervading every part of the United States, and most commonly used in the business of commerce, between distant places, must all be withdrawn from circulation when the charter expires. If any of the notes then remain in the hands of individuals, remote from the branches at which they are payable, their immediate depreciation will subject the holders to certain loss. Those payable in the principal commercial cities, would perhaps retain nearly their nominal value; but this would not be the case with the notes of the interior branches, remote from the great marts of trade; and the statements of the Bank will show that a great part of its circulation is composed of notes of this description. The Bank would seem to have taken pains to introduce into common use such a description of paper, as it could depreciate or raise to its par value, as best suited its own views; and it is of the first importance to the interest of the public, that these notes should all be taken out of circulation before they depreciate in the hands of the individuals who hold them; and they ought to be withdrawn gradually, and their places supplied, as they retire, by the currency which will become the substitute for them.
How long will it require for the ordinary operations of commerce, and the reduction of discounts by the Bank, to withdraw the amount of circulation before mentioned, without giving a shock to the currency, or producing a distressing pressure upon the community ? I am convinced that the time which remained for the charter to run after the 1st October, [the day on which Secretary Taney's order commenced], was not more than was proper to accomplish the object, with safety to the community. And if it had depended upon my judgment, at an earlier period, I should have preferred, and should have taken a longer time.
Enough, however, is yet left, provided no measures are adopted by the Bank, for the purpose of inflicting unnecessary suffering upon the country. Apart, therefore, from any considerations arising out of the conduct of the Bank, and looking merely to the near approach of the day when it would cease to exist, the withdrawal of the deposites appeared to be required by the public interest, at the time when the first order for removal was given by this department.
This opinion is confirmed by the ground taken in favor of the renewal of the charter at [the] December session, 1831. It was then urged that the short period which yet remained of its corporate existence, and the necessity of preparing to wind up its concerns, if the charter was not to be renewed, made it proper that the question should at once be decided. Very little more than half of that time yet remains. And although I do not concur in the opinions then expressed, and believe that the application was ill-timed, and premature, yet the arguments then relied on by many whose judgment is entitled to respect, afford strong grounds for concluding, that the measure now adopted is not objectionable on the score of time, and that if the deposites were not to continue in the bank until the termination of its charter, their withdrawal could not, with propriety, be longer delayed.
There is, however, another view of this subject, which, in my opinion, made it impossible further to postpone the removal. About the first of December, 1832, it had been ascertained that the present chief magistrate was re-elected, and that his decision against the bank had thus been sanctioned by the people. At that time the discounts of the Bank amounted to $61,571,625.66. Although the issue, which the Bank took so much pains to frame, had now been tried, and the decision pronounced against it, yet no steps were taken to prepare for its approaching end.
On the contrary, it proceeded to enlarge its discounts, and on the 2d of August, 1833, they amounted to $64,160,349.14, being an increase of more than two and a half millions in the eight months immediately following the decision against them. And so far from preparing to arrange its affairs, with a view to wind up its business, it seemed from this course or conduct, to be the design of the Bank to put itself in such an attitude, that at the close of its charter, the country would be compelled to submit to its renewal, or to bear all the consequences of a currency suddenly deranged, and also a severe pressure for the immense outstanding claims which would then be due to this corporation. While the Bank was thus proceeding to enlarge its discounts, an agent was appointed by the Secretary of the Treasury to inquire, upon what terms the State banks would undertake to perform the services to the Government which have heretofore been rendered by the Bank of the United States; and also to ascertain their condition in four of the principal commercial cities, for the purpose of enabling the department to judge whether they would be safe and convenient depositories for the public money.
It was deemed necessary that suitable fiscal agents should be prepared in due season, and it was proper that time would be allowed them to make arrangements with one another throughout the country, in order that they might perform their duties in concert and in a manner that would be convenient and acceptable to the public. It was essential that a change so important in its character, and so extensive in its operation upon the financial concerns of the country, should not be introduced without timely preparation. There was nothing in this proceeding, nor in the condition of the Bank, which should at that time have produced a sudden and entire change of its policy. For, in addition to the ordinary receipts from bonds given on account of previous importation, the season was at hand when the cash duties on woollens might well be expected to be very productive, and from these two sources the receipts from the customs were in fact unusually large, and the amount of the public deposites in the Bank proportionably heavy.
The capacity of the Bank, therefore, at this time, to afford facilities to commerce, was not only equal, but greatly superior to what it had been for some time before; and the nature of the inquiry made of the State banks, confined as it was to the four principal commercial cities, showed that the immediate withdrawal of the entire deposites from the Bank, so as to distress it, was not contemplated. And if any apprehensions to the contrary were felt by the Bank, an inquiry at this department would, no doubt, have been promptly and satisfactorily answered. And certainly, it was the duty of the Bank, before it adopted a course oppressive to the whole country, to be sure of the ground on which it acted. It can never be justified for inflicting a public injury, by alleging mistaken opinions of its own, when the means of obtaining information absolutely certain, were so obviously within its reach. The change was always designed to be gradual: and the conduct of the Bank itself has since compelled me to remove a portion of the deposites earlier than was originally intended.
There was nothing, therefore, in the inquiry before mentioned, nor in the views of the executive department, nor in the condition of the Bank, which justified a sudden and oppressive change in its policy.
The situation of the mercantile classes also rendered the usual aids of the Bank more than ever necessary to sustain them in their business. Their bonds for previous importations were, as I before stated, constantly becoming due, and heavy cash duties were almost daily to be paid. The demands of the public upon those engaged in commerce, were consequently unusually large, and they had a just claim to the most liberal indulgence from the fiscal agent of the Government, which had for so many years been reaping harvests of profits from the deposites of the public money. But the Bank about this time changed its course.
By the monthly statement of the bank dated 2d August, 1833, it appears that its loans and domestic bills of exchange, purchased and on hand amounted to $64,160,349.14
By the monthly statement of the 2d September, 1833, they appear to have been 62,653,359.59
By that of the 2d of October, 1833, they were 60,094,202.93
Reduction in two months, 4,066,146.21
By the same papers it appears that the public deposites, including those for the redemption of public debt, the treasurer's and those of the public officers, were, in August, $7,599,931.47
in September, 9,182,173.18
in October, 9,868,435.58
Increase of the public deposites in two months $2,268,504.11
Total amount collected from the community $6,334,650.32
Thus upwards of six millions of dollars were withdrawn from the business of the country by the Bank of the United States, in the course of two months. This, of itself, must have produced a pressure on the money market, affecting all commercial transactions. But the curtailment in the bank accommodations of the community, was much larger. The policy adopted by the Bank of the United States compelled the State banks to take the same course, in self defence, and the Bank of the United States appears to have resorted to the expedient of drawing from the State banks the balances due, in specie, and to have hoarded up the article in its own vaults.
In August, 1833, that bank had in specie $10,023,677.38
In September, 10,207,649.20
In October, 10,663,441.51
Showing an increase of specie in two months $639,764.13
This sum it is believed was chiefly drawn from the State banks. To fortify themselves, those banks were compelled to call upon their debtors and curtail their accommodations; and so large a proportion of these calls are always paid in their own notes, that to obtain $100,000 in specie, they are probably obliged to call for tour or five times that amount. To replace the specie taken from them by the Bank of the United States and to provide for their own safety, the State banks, therefore, must have curtailed from two to three millions of dollars. On the whole it is a fair estimate, that the collections from the community, during those two months without any corresponding return, did not fall much short of nine millions of dollars.
As might have been expected, complaints of a pressure upon the money market were heard from every quarter. The balances due from the State banks had, during the same time, increased from $368,960.98 to $2,288,573.19, and from the uncertain policy of banks it was apprehended they might suddenly be called for in specie. The State banks so far from being able to relieve the community, found themselves under the necessity of providing for their own safety--
A very large proportion of the collections of the Bank in August and September, were in Philadelphia, New York and Boston. In August and September the curtailment in Philadelphia, was
Increases of public deposites .... 646,846.80
Actual collections by the Bank, .... 842,395.49
Increase of public deposites in New York, .... $1,396,597.24
Deduct increase of loans ...... 331,295.38
Actual collections by the Bank .... 1,065,301.86
Curtailment in Boston was ...... $717,264.45
Increase of public deposites ...... 48,069.88
Actual collections by the Bank ......... 765,334.33
Total collections in the three cities .... $2,673,031.68
It will be perceived, that it was solely through the increase of the public deposites, that the bank raised balances against the State banks in New York, and was placed in a situation to take from them at its pleasure, large sums in specie. And when it is considered, that those curtailments and collections of the Bank of the United States, necessarily compelled the State banks to curtail also, we shall be at no loss to perceive the cause of the pressure, which existed in the commercial cities about the end of the month of September. It was impossible that the commercial community could have sustained itself much longer under such a policy. In the two succeeding months, the collections of the Bank would probably have exceeded five millions more, and the State banks would have been obliged to curtail in an equal sum. The reduction of bank accommodations, to the amount of nineteen millions of dollars, in four months, must have almost put an end to trade; and before the first of October, this pressure in the principal commercial cities, had become ts intense, that it could not have been endured much longer, without the most serious embarrassments. It was then daily increasing, and from the best information that I have been able to obtain, I am persuaded, that if the public moneys received for revenue had been continued to be deposited in the Bank of the United States, for two months longer, and it had adhered to the oppressive system of policy which it pursued during the two preceding months, a wide spread scene of bankruptcy and ruin must have followed. There was no alternative therefore, for the Treasury Department, but to act at once, or abandon the object altogether. Duties of the highest character, would not permit the latter course, and I did not hesitate promptly to resort to the former.
I have stated the condition of the mercantile classes at the time of the removal, to explain why it was impossible to postpone it even for a short period. Under other circumstances, I should have been disposed to direct the removal to take effect at a distant day, so as to give Congress an opportunity of prescribing, in the mean time, the places of deposite, and of regulating the securities proper to be taken. It is true, that the power given to the Secretary of the Treasury to remove the deposites from the Bank of the United States, necessarily carries with it the right to select the places where they shall afterwards be made.
The power of removal cannot be exercised, without placing them elsewhere; and the right to select is therefore contained in the right to remove. It is also true, that in my judgment, as has been already stated, the public interest would have been advanced, if the change had taken place at an earlier period. Yet as a few months would in ordinary times have made no very serious difference, and the removal had already been delayed until the meeting of Congress was approaching, I should have preferred executing the measure, in a manner that would have enabled the legislature to act on the subject, in advance of the actual removal, if it had deemed it proper to do so. But the conduct of the Bank left me no choice, except between the immediate removal, and its final relinquishment. For if the measure had then been suspended to be resumed at a future time, it was in the power of the Bank to produce the same evil whenever it was again attempted. Putting aside, therefore, from the view of the subject which I am now presenting, all the inducements which grew out of the misconduct of the Bank, and regarding only its approaching end, and the intensity of the pressure it was producing, no further delay was admissable.
The facts and reasons above stated, appeared to have established the following propositions:
1st. It was the duty or this department, not to act upon the assumption, that the legislative power would hereafter change the law, in relation to the Bank or the United States; and it was bound to regulate its conduct upon the principle that the existence of this corporation would terminate on the 3d of march, 1836.
2d. The public interest required that the deposites of public money, should not continue to be made in the Bank of the United States, until the close of its existence; but should be transferred to some other place, at some period prior to that time.
3d. The power of removal being reserved exclusively to the Secretary of the Treasury, by the terms of the charter, his action was necessary in order to effect it, and the deposits could not, according to the agreement made by congress with the stockholders, have been removed by the legislative branch of the Government, until the charter of the Bank was at an end.
4th. The near approach of the time when the charter would expire, as well as the condition of the mercantile community, produced by the conduct of the Bank, render the removal indispensable, at the time it was begun; and it could not have been postponed to a later day, without injury to the country.
Acting on these principles I should have felt myself bound to follow the course I have pursued in relation to the deposites, without any reference to the misconduct of the Bank. But there are other reasons for the removal, growing out of the manner in which the affaires of the Bank have been managed, and its money applied, which would have made it my duty to withdraw the deposites, at any period of the charter.
It will, I presume, be admitted on all hands, that the Bank was incorporated, in order to create an useful and convenient public agent, to assist the Government in its fiscal operations. The act of incorporation was not designed merely as an act of favor to the stockholders, nor were exclusive privileges given to them for the purpose of enabling them to attain political power, or to amass wealth at the expense of the people of the United States. The motive for establishing this vast monopoly, was the hope that it would conduce to the public good. It was created to be the agent of the public, to be employed for the benefit of the people, and the peculiar privileges and means of private emolument given to it, by the act of incorporation, were intended as rewards for the services it was expected to perform. It was never supposed, that its own separate interests would be voluntarily brought into collision with those of the public. And still less, was it anticipated, that it would seek by its money to obtain political power, and control the action of the Government, either by the favors it can shower, or the fear of its resentment. Its duty was simply that of an agent, bound to render certain services to its principal, in consideration of the advantages granted to it. And like every other public agent or officer, its own separate interests were subordinate to its duty to the public. It was bound to consult the general good, rather than its private emolument, if they should happen to come into conflict with one another. If therefore it sought to obtain political power, or to increase its gains, by means which would probably bring distress on the community, it violated its duty, and perverted, to the public injury, the powers which were given to be used for the public good. And in such an event, it was the duty of the public servants, to whom the trust was reserved, to dismiss it so far as might lawfully be done, from the agency it had thus abused.
Regarding the Bank, therefore, as the agent of the United States, and bound by the duties, and liable to the obligations which ordinarily belong to the relation of principal and agent, except where the charter has otherwise directed, I proceed to state the circumstances, which show that it had justly forfeited the confidence of the Government, and that it ought not to have been further trusted as the depository of public money.
The United States, by the charter, reserved the right of appointing five directors of the Bank. It was intended by this means, not only to provide guardians for the interests of the public in the general administration of its affairs, but also to have faithful officers, whose situation would enable them to become intimately acquainted with all the transactions of the institution, and whose duty it would be, to apprise the proper authorities, of any misconduct, on the part of the corporation, likely to effect the public interest. The fourth fundamental article of the constitution of the corporation declares, that not less than seven directors shall constitute a board for the transaction of business. At these meetings of the board, the directors on the part of the United States had, of course, a right to be present, and consequently, if the business of the corporation had been transacted in the manner which the law requires, there was abundant security that nothing could be done, injuriously affecting the interests of the people, without being immediately communicated to the public servants, who were authorised to apply the remedy. And if the corporation has so arranged its concerns, as to conceal from the public directors some of its most important operations, and has thereby destroyed the safeguards which were designed to secure the interests of the United States, it would seem to be very clear, that it forfeited its claim to confidence, and is no longer worthy of trust.
In the ordinary concerns of life, among individuals, no prudent man would continue to place his funds in the hands of an agent, after he discovered, that he was studiously concealing from him the manner in which they were employed. The public money ought not to be guarded with less vigilance, than that of an individual. And measures or concealment, on the part of this corporation, are not only contrary to the duties of its agency, but are also in direct violation of the law to which it owes its corporate existence. And the same misconduct, which, in the case of private individuals, would induce a prudent man to dismiss an agent from his employment, would require a similar course towards the fiscal agent of the Government, by the officer to whom the law has entrusted the supervision of its conduct, and given the power of removal.
Tried by these principles, it will be found that the conduct of the bank made it the duty of the Secretary of the Treasury to withdraw from its care the public funds.
1st. Instead of a board constituted of at least seven directors, according to the charter, at which those appointed by the United States have a right to be present, many of the most important money transactions of the Bank have been, and still are placed under the control of a committee, denominated "the exchange committee," of which no one of the public directors, has been allowed to be a member since the commencement of the present year. This committee is not even elected by the board, and the public directors have no voice in their appointment. They are chosen by the president of the bank; and the business of the institution which ought to be decided on by the board of directors, is, in many instances, transacted by this committee, and no one has a right to be present at their proceedings but the president and those whom he shall please to name as members of this committee. Thus loans are made, unknown at the time to a majority of the board, and paper discounted which might probably be rejected at a regular meeting of the directors; the most important operations of the bank are sometimes resolved on, and executed by this committee; and its measures are, it uppears, designedly, and by regular system, so arranged as to conceal from the officers of the Government, transactions in which the public interests are deeply involved.
And this fact alone furnishes evidence too strong to be resisted, that the concealment of certain important operations of the corporation, from the officers of the Government, is one of the objects intended to be accomplished by means of this committee. The plain words of the charter are violated, in order to deprive the people of the United States, of one of five principal securities, which the law had provided to guard their interests, and to render more safe the public money entrusted to the care of the Bank. Would any individual of ordinary discretion, continue his money in the hands of an agent who had violated his instructions for the purpose of hiding from him the manner in which he was conducting the business confided to his charge ? Would he continue his property in his hands when he had not only ascertained that concealment had been practiced towards him, but when the agent avowed his determination to continue in the same course, and to withhold from him, as far as he could, all knowledge or the manner in which he was employing his funds ? If an individual would not be expected to continue his confidence, under such circumstances, upon what principle could a different line of conduct be required from the officers of the United States charged with the care of the public interests ? The public money is surely entitled to the same care and protection, as that of an individual, and if the latter would be bound, in justice to himself, to withdraw his money from the hands of an agent, thus regardless of his duty, the same principle requires that the money of the United States should, under the like circumstances, be withdrawn from the hands of their fiscal agent. And as the power of withdrawal was confided to the Secretary of the Treasury, it was his duty to remove it on this ground alone, if no other cause of complaint had existed against the Bank. The conduct of the Bank, in relation to the three per cent. stock of the United States, is a memorable instance of the power exercised in secret by the exchange committee and the abuses to which it is incident.
The circumstances attending that transaction have been so fully laid before Congress and the public, that it is useless to repeat them here. It was a case in which this committee not only managed in secret a moneyed transaction of vast amount, intimately connected with the interests of the people of this country, but one where the measures of the Government were thwarted by the Bank, and the nation compelled to continue for a time, liable for a debt, which it was ready and desired to extinguish. Nor is this the only measure of the kind which has come officially to my knowledge. I have the honor to present herewith a report made by three of the public directors to the President of the United States on the 22d April 1833, (marked A), in which, in compliance with his request that they would communicate to him such information as was within their personal knowledge relative to these unusual proceedings of the board of directors, they disclose the exceptionable manner in which the power conferred by law on the board has been surrendered to the exchange committee; that this has been done evidently with the design of preventing a proper and contemplated examination into the accounts of persons whose paper was offered for discount; that a minority of the board apparently sufficient to have prevented the loan, if the security was had, were deprived of their votes upon the question, and that the long established by-laws of the institution were set aside for the purpose of carrying these designs into effect with less difficulty or embarrassment.
If proceedings like this are sanctioned by the constituted authorities of the United States, the appointment of directors on their part is an idle ceremony, and affords no safeguard to the public treasure, in the custody of the Bank. And even legislative enactments, in relation to this corporation, are of but little value, if it may, at its pleasure, disregard one of the fundamental articles of its constitution, and transfer to a secret committee the business which by law, ought to be transacted by the board.
It is scarcely necessary in presenting this document to the consideration of Congress, to notice an objection, which has been sometimes put forward against the publication of any proceedings which relate to the accounts of private individuals. The circumstances detailed are the regular and official transactions of the board of directors, nor do they involve the private debtor and creditor account of persons dealing with the Bank, which is alone included in the distinction taken by the charter in regard to private accounts. If the argument thus brought forward were a sound one, there could be no such thing as an examination of any value into the conduct of the Bank.
Because the business of the Bank being with individuals, its misconduct could never be shown without bringing before the public the individual transaction in which the conduct of the Bank was impeached. And if it could make good the position, that such proceedings are never to be exposed to the public, because individuals are concerned in them, it would effectually shut out all useful examination, and be enabled to apply its money to the most improper purposes, without detection or exposure. When its conduct is impeached, on the ground that it has used its great money power to obtain political influence, the investigation of the charge is in its very nature, an inquiry into its transactions with individuals. And although the accounts brought forward on such occasions, may be the accounts of individuals, yet they are also the accounts of the Bank, and show its conduct. And being the fiscal agent of the government, with such immense power to be exercised, for good or for evil, the public safety requires that all of its proceedings should be open to the strictest and most rigorous scrutiny. Its charter may be forfeited by its misconduct, and would be justly forfeited, if it sought to obtain influence in the affairs of the nation. And yet such attempts on the part of the Bank can never be proved except by the examinations and disclosure of its dealings with individuals.
2d. It is not merely by its concealments that the bank has proved itself regardless of the duties of its agency. Its own interests will be found to be its ruling principle --and the just claims of the public to be treated with but little regard when they have come into collision with the interests of the corporation. This was but too plainly the case in the affair or the three per cents above mentioned. A recent instance proves its rule of action is not changed in that respect. And the failure of the French government to pay the bill drawn for the first instalment due by the treaty, has been made the occasion of endeavoring to obtain from the public, the sum of $158,842.77, to which no principle of justice appears to entitle it. The money for which the bill was sold remained in the Bank. The expenses it incurred were of small amount, and these the government are willing to pay. But the corporation, not content with the profits it was deriving from the millions of public money then in its vaults, and which it was daily using in its discounts, endeavors to convert the public disappointment into a gainful transaction for itself, and demands the large sum above mentioned, without pretending that it sustained any loss or inconvenience, commensurate with the amount it seeks to obtain from the government. The fiscal agent of the public, attempts to avail itself of the unexpected disappointment of the principal, for the purpose of enhancing its own profits at the expense of the community.
3d. There is sufficient evidence to prove that the Bank has used its means with a view to obtain political power, and thereby secure the renewal of its charter.
The documents which have been heretofore laid before Congress, and are now on its files, will show, that on the 31st of December 1830, the aggregate debt due to the bank, was $42,402,304.24, and that on the 31st of December 1831, it was $63,026,552.93, being an extension of its loans in a single year of twenty millions of dollars, and an increase of nearly fifty per cent. on its previous accommodations.
And as if to leave us no room to doubt as to the motive of this extraordinary conduct, it continued to add rapidly to its loans, and on the 1st of May, 1832, while its petition for the renewal of its charter was yet pending before Congress, they amounted to $70,418,070.72, being an increase of $7,401,617.79, in the four preceding months, and making altogether an addition of $28,025,766.48, in the short space of sixteen months, and being an extension of more than 66 per cent. on its previous loans. Such an increase at such a period of its charter, is without example in the history of banking institutions. On the 31st of December, 1830, when its loans amounted as above stated to only $42,402,304.24, the corporation had been in existence fourteen years. The sudden and great increase was made when the charter was drawing to a close, and when it had but little more than four years to run. It cannot be supposed that these immense loans were made, from a confident expectation that the charter would be renewed. On the contrary it is now an historical fact that the bank itself deemed the chances or renewal so doubtful that in the session of Congress, beginning in December, 1831, it petitioned for a recharter, and the reason generally assigned for pressing for a decision, at that time, was the great extent of its business; and the necessity of preparing to bring it to a close if the charter was not to he renewed. Thus, with but little more than four years to run, with doubtful chances of renewal, and aware of the necessity of beginning to arrange its vast transactions, it increased its loans in sixteen months, more than twenty-eight millions of dollars. Was this imprudence only ?
It cannot be believed that those who managed its concerns, could have committed such an oversight. Can any proper reason be assigned for this departure from the course which the interests of a moneyed corporation, as well as that of the country, obviously required. I am not aware that any sufficient justification has been offered. And this extraordinary increase of its loans, made in so short a space of time, at such a period of its charter, and upon the eve of a severely contested election of president, in which the bank took an open and direct interest, demonstrates that it was using its money for the purpose or obtaining a hold upon the people of this country, in order to operate upon their fears, and to induce them, by the apprehension of ruin, to vote against the candidate whom it desired to defeat. In other words, this great moneyed corporation determined to enter the political arena, and to influence the measures of the Government by causing its weight to be felt in the election of its officers.
But if the circumstances above stated were not of themselves sufficient to prove that the bank had sought, by its money, to obtain political power, and to exercise by this means a controlling influence on the measures of the government, recent developments have furnished such proof as to leave no room for doubt. I have the honor to transmit herewith an official statement (marked B), signed by four of the public directors in the bank, showing at the same time the unlawful manner in which its business is conducted and the unwarrantable purposes to which its money has been and is still applied. It will he seen by the proceedings therein stated, that the whole capital of the bank is in effect placed at the disposition of the president of that institution. He is authorised to expend what he pleases in causing "to be prepared and circulated such documents and papers as may communicate to the people information in regard to the nature and operations of the bank." And he may therefore, under the very indefinite terms of the resolutions, employ as many persons as he pleases, at such salaries as he thinks proper, either to prepare daily paragraphs for newspapers in favor of the bank, or to write pamphlets and essays to influence the public judgment.
And he may even provide for the publications, by salaries to printers, or by purchasing presses and types, and placing them in the hands of agents employed and paid by the Bank. There is no limitation, short of the capital of the bank, as to the sum of money he may thus expend in different parts of the United States. From the description of articles which appear to have been paid for under this resolution, it seems that the president of the institution has supposed that publications containing attacks upon officers of the Government who are supposed to stand in the way of the renewal of the charter is one of the modes of "communicating to the people information in regard to the nature and operational of the bank." This construction was, it appears, approved by the board, as they continued the authority in his hands, unchanged, after the manner in which a portion of the money had been applied was laid before them. And we are left to conclude, that this institution is now openly in the field as a political partisan, and that one of its means of warfare, is the destruction of the political standing of those, who are opposed to the renewal of the charter.
The sum actually charged to the expenses, under this resolution, is sufficiently startling. How much more may have been already squandered, we are yet to learn, and the work of "preparing and circulating" such publications is still, it is presumed, going on under the last resolution of the board. It is, moreover, impossible to ascertain the specific purposes to which the money may in fact have been applied, since vouchers are not required to show the particular services for which it was given. With these positive proofs of the efforts of the Bank to obtain power, and to influence the measures of the Government, I have not hesitated as to the path of duty. If, when this evidence was before use, I had failed to withdraw the deposites of public money from the Bank, I would have been lending the countenance and support of this department to measures which are but too well calculated to destroy the purity of our institutions, and endanger thereby the liberties or the people.
It cannot be supposed that these expenditures are justifiable on the ground that the bank has a right to defend itself, and that the money in question was therefore properly expended. Some of the items accounted for, sufficiently show in what manner it was endeavoring to defend its interests. It had entered the field of political warfare, and as a political partisan, was endeavoring to defeat the election of those who were opposed to its views. It was striving by means of its money to control the course of the Government, by driving from power those who were obnoxious to its resentment. Can it be permitted to a great moneyed corporation to enter on such a controversy, and then justify its conduct on the ground that it is defending its own interests ? The right of such an institution to interfere in the political concerns of the country, for any cause whatever, can never be recognized; and a defence like this, on the part of the Bank, could not be tolerated even if the individual stockholders alone were thus using their own money to promote their own interests. But it is not only the money of individuals, which is thus applied. The one-fifth of the capital of the bank, amounting to seven millions of dollars, belongs to the United States, and the one fifth of the money which has been expended, and is yet to be expended, under this revolution, is the property of the public and does not belong to private individuals. Yet the board of directors assert the right, not only to authorise the expenditure of the money of individual stockholders, in order to promote their individual interests, but have also, by the resolution in question, taken upon themselves to give the like authority over money which belongs to the United States.
Is an institution which deals thus with the money of the people a proper depository for the public funds ? When such a right is openly claimed and acted on by the board of directors, can the money of the United States be deemed safe in its hands ? The same principle that would sanction the application of one portion of the public money to such purposes, would justify the like use of all that may come to its possession. The board of directors have no lawful authority to employ the money of the United States for such objects.
So far as the nation is concerned in the character of the Bank, the people, through their own representatives in Congress, can take care of their own rights and vindicate the character of the Bank, if they think it is unjustly assailed. And they do not need the aid of persons employed and paid by the bank, to learn whether its charter be constitutional or nor -- nor have they authorised the president and directors of that institution to expend the public money to enlighten them on this subject.
The resolution in question is, moreover, in direct violation of the act of Congress by which this corporation was established. And it is difficult to imagine how the unlimited and irresponsible power over the money of the Bank, which the directors have given to their president, can be reconciled to the clause in the charter which requires seven directors to form a board for the transaction of business. If the expenditure of money for the purposes contemplated by the resolution, be a legitimate part of the business of the corporation, the board could not lawfully transfer it to one of its officers, unless they can, by resolution, surrender into the hands of their president the entire power of the corporation, and commit to the care of a single individual, the corporate powers which the law has declared should be exercised by the board of directors.
Chief justice Marshall, in the case of the Bank of the United States vs. Dandridge, when speaking of the bonds required to be given by the cashiers of the banks, says, "it requires very little knowledge of the interior of banks to know that the interests of the stockholders are committed, to a very great extent, to these and other officers. It was, and ought to have been, the intention of Congress, to secure the Government which took a deep interest in this institution, and to secure individuals, who embarked their fortune in it, on the faith of the Government, as far as possible, from the mal-practices of its officers." But the directors of the bank seem to have acted on principles directly opposite to those stated by the chief justice. And instead of endeavoring to secure "as far as possible" the public and individuals from the mal-practices of its officers, they place the funds of the Bank under the control of a single officer, from whom neither security nor specific vouchers have been required.
It is true, that in the opinion which the chief justice gave in the case from which the above passage is quoted, he differed from the rest of the court. But the difference was on other principles, and not on the one above stated.
In forming my judgment on this part of the case, I have not regarded the short time the charter has yet to run. But my conduct has been governed by the considerations which arise altogether out of the course pursued by the Bank, and which would have equally influenced the decision of the Department, in relation to the deposites. And upon this view of the subject, the following propositions appear to be fully maintained.
1st. That the bank, being the fiscal agent of the Government, in the duties which the law requires it to perform, is liable to all the responsibilities which attach to the character of agent, in ordinary cases of principal and agent among individuals; and it is therefore the duty of the officer of the government to whom the power has been entrusted, to withdraw from its possession the public funds whenever its conduct towards its principal has been such as would induce a prudent man in private life, to dismiss his agent from his employment.
2d. That by means of its exchange committee, it had so arranged its business, as to deprive the public servants of those opportunities of observing its conduct, which the law had provided for the safety of the public money confided to its care, and that there is sufficient evidence to show that this arrangement on the part of the bank was deliberately planned, and is still perpisted in, for the purpose of concealment.
3rd. That it has also, in the case of the three per cent. stock, and of the bill of exchange on France, endeavored unjustly to advance its own interest, at the expense of the interest and the just rights of the people of the United States.
If these propositions be established, it is very clear that a man of ordinary prudence, in private life, would withdraw his funds from an agent who had thus behaved himself, in relation to his principal, and it follows, that it was the duty of the Secretary of the Treasury to withdraw the funds of the United States from the bank.
4th. That there is sufficient evidence to show that the bank has been, and still is, seeking to obtain political power, and has used its money for the purpose of influencing the election of the public servants, and it was incumbent upon the Secretary of the Treasury, on that account, to withdraw from its possession the money of the United States which it was thus using for improper purposes. Upon the whole, I have felt myself bound by the strongest obligations, to remove the deposites. The obligation was imposed upon me by the near approach of the time when this corporation will cease too exist, as well as by the course of conduct which it has seen fit to pursue.
The propriety of removing the deposites being thus evident, and it being consequently my duty to select the places to which they were to be removed, it became necessary that arrangements should be immediately made with the new depositories of the public money, which would not only render it safe, but would at the same time secure to the Government and to the community at large, the convenience and facilities that were intended to be obtained by incorporating the Bank of the United States. Measures were accordingly taken for that purpose, and copies of the contracts which have been made with the selected banks, and of the letters of instructions to them from this Department, are herewith submitted. The contracts with the banks in the interior are not precisely the same [as] with those in the Atlantic cities. The difference between them arises from the nature of the business transacted by the banks in these different places.
The State banks selected, are all institutions of high character and undoubted strength, and are under the management and control of persons of unquestioned probity and intelligence. And, in order to ensure the safety of the public money, each of them is required, and has agreed, to give security, whenever the amount of the deposit shall exceed the half of the amount of the capital actually paid in; and this department has reserved to itself the right to demand security whenever it may think it advisable, although the amount on deposite may not be equal to the sum above stated. The banks selected have also severally engaged to transmit money to any point at which it may be required by the directions of this department, for the public service, and to perform all the services to the Government which were heretofore rendered by the Bank of the United States. And by engagements among themselves, to honor each others' notes and drafts, they are providing a general currency at least as sound as that of the Bank of the United States, and will afford facilities to commerce, and in the business of domestic exchange, quite equal to any which the community heretofore enjoyed.
There has not been yet sufficient time to perfect these arrangements; but enough has already been done to show that even on the score of expediency, a bank of the United States is not necessary, either for the fiscal operations of the Government, or the public convenience; and that every object which the charter to the present Bank was designed to attain, may be as effectually accomplished by the State banks. And, if this can be done, nothing that is useful will be lost or endangered by the change, while much that is desirable will be gained by it. For no one of these corporations will possess that absolute and almost unlimited dominion over the property of the citizens of the United States, which the present Bank holds, and which enables it at any moment, at its own pleasure, to bring distress upon any portion of the community, whenever it may deem it useful to its interest to make its power felt.
The influence of each of the State bank is necessarily limited to its own immediate neighborhood, and they will be kept in check by the other local banks. They will not therefore be tempted by the consciousness of power to aspire to political influence, nor likely to interfere in the elections of the public servants. They will, moreover, be managed by persons who reside in the midst of the people, who are to be immediately affected by their measures, and they cannot be insensible or indifferent to the opinions and peculiar interests of those by whom they are daily surrounded, and with whom they are constantly associating. These circumstances always furnish strong safeguards against an oppressive exercise of power, and forcibly recommend the employment of State banks, in preference to a bank of the United States with its numerous and distant branches.
A corporation of the latter description, is continually acting under the conviction of its immense power over the money concerns of the whole country, and is dealing also with the fortunes and comforts of men who are distant from them, and to whom they are personally strangers. The directors of the bank are not compelled to hear daily the complaints, and witness the sufferings of those who may be ruined by their proceedings. From the nature of man, such an institution cannot always be expected to sympathize with the wants and feelings of those who are affected by its policy. And we ought not perhaps to be surprised, if a corporation like the Bank of the United States, from the feeling of rivalry, or from cold calculations of interest or ambition, should deliberately plan and execute a course of measures highly injurious and oppressive in places where the directors who control its conduct have no local sympathies to restrain them.
It is a fixed principle of our political institutions, to guard against the unnecessary accumulation of power over persons and property, in any hands. And no hands are less wortby to be trusted with it, than those of a moneyed corporation. In the selection therefore of the State banks as the fiscal agents of the Government, no disadvantages appear to have been incurred on the score of safety or convenience, or the general interests of the country, while much that is valuable will be gained by the change. I am, however, well aware of the vast power of the Bank of the United States, and of its ability to bring distress and suffering on the country. This is one of the evils of chartering a bank with such an amount of capital, with the right of shooting its branches into every part of the Union, so as to extend its influence to every neighborhood.
The immense loan of more than twenty-eight millions of dollars suddenly poured out, chiefly in the western States, in 1831, and the first four months of 1832, sufficiently attests that the Bank is sensible of the power which its money gives it, and has placed itself in an attitude to make the people of the United States to feel the weight of its resentment, if they presume to disappoint the wishes of the corporation. By a severe curtailment, it has already made it proper to withdraw a portion of the money it held on deposites, and transfer it to the custody of the new fiscal agents, in order to shield the community from the injustice of the Bank of the United States. But I have not supposed that the course of the Government ought to be regulated by the fear of the power of the Bank.
If such a motive could be allowed to influence the legislation of Congress, or the action of the executive departments of the Government, there is an end to the sovereignty of the people, and the liberties of the country are at once surrendered at the feet of a moneyed corporation. They may now demand the possession of the public money, or the renewal of the charter, and if these objects are yielded to them from apprehensions of their power, or from the suffering which rapid curtailments, on their part are inflicting on the community, what may they not next require. Will submission render such a corporation more forbearing in its course ? What law may it not hereafter demand, that it will not if it pleases, be able to enforce by the same weans ?
These considerations need not, however, be pressed further in this report. They are too obvious and striking to need enforcement by argument. And I rely with confidence, on the representatives of this enlightened nation, to sustain a measure which the best interests of the country called for, and which had become absolutely necessary to preserve untainted its free institutions, and to secure the liberties and happiness of the people.
I am very respectfully, your obedient servant,
Roger Brooke Taney,
Secretary of the Treasury.
Niles' Weekly Register
Baltimore, September 21, 1833.
The Public Deposites -- Rumours, &c.
We have had fresh reports almost every day this week from Washington, concerning the removal of the public deposites, and the resignation of from one to three of the heads of departments.
The following paragraphs with relation to a removal of the deposites, recently published, are interesting, and deserve a record:
From the Baltimore Chronicle--
"It was reported yesterday in the city, that the Bank of the United States had been officially assured that the government deposites would not be withdrawn. From the firmness and independence of the present Secretary of the Treasury, we can readily give credit to this report."
On which the Washington Globe said--
"The audacity of the bank press is conspicuous in the above remark. We believe that Mr. Duane has not even yet communicated his views to the President, with regard to the report of the agent of the Treasury, and yet we are told that 'the Bank of the United States is officially assured,' &c. &c. Would the Chronicle convert the Secretary of the Treasury into a bank officer, and have him communicating to the corporation what belongs to his relations with the president ? Those who respect Mr. Duane believe no such thing."
From the New York Standard of the 17th--
"If Andrew Jackson suffers any members of his cabinet to trick the American people out of their most just claims for the removal of the deposites immediately, after all that has been done and said, he will forfeit their confidence and respect, and he mill bring on that cabinet a storm of indignation and abhorrence, such as a ministry have never yet endured in this country."
A letter from Philadelphia, dated September 16, says--
"It appears to be generally understood that the deposites will be withdrawn forthwith. It is said that it was decided on Saturday at Washington. This report may be relied upon."
From the N.Y. Commercial Advertiser of Sept. 17--
"Last evening we were directly and correctly informed, that a trojan office-holder --a sub-member of the Albany regency, came on by yesterday's conveyance from Washington, with positive information upon this subject. He stated that he knew the deposites were to be removed, forthwith -- or, rather, that the places of deposite were to be changed. The public moneys already in deposite, he said, were not to be removed, but only to be drawn out as the exigencies of the government required; but all future deposites were to be made in the local banks."
From the Globe of yesterday morning.
We are authorised to state, that the deposites of the public money will be changed from the Bank of the United States to the State banks, as soon as necessary arrangements can be made for that purpose, and that it is believed, they can be completed in Baltimore, Philadelphia, New York, and Boston, in time to make the change by the first of October, and perhaps sooner, if circumstances should render an earlier action necessary on the part of the government.
It is contemplated, we understand, not to remove, at once, the whole of the public money, now on deposite in the Bank of the United States, but to suffer it to remain there until it shall be gradually withdrawn, by the usual operations of the government. And this plan is adopted in order to prevent any necessity, on the part of the bank of the United States, for pressing upon the commercial community; and to enable it to afford, if it think proper, the usual facilities to the merchants. It is believed, that by this means the change need not produce any inconvenience to the commercial community, and that circumstances will not require a sudden and heavy call on the bank of the United States so as to occasion embarrassment to the institution or the public.
The general anxiety which has been manifested on this subject, has made it proper to announce what is intended to be done: and we understand that the facts and reasons which have led to this measure, will shortly be laid before the public.
It is believed that they will be found to be amply sufficient to justify the course which is now to be taken, in relation to the public deposites in the bank of the United States.
Niles' Weekly Register
Baltimore, October 12, 1833.
Bank of the United States, &c. The newspapers are yet filled with discussions and remarks about the removal of the deposites, and concerning the manner in which that proceeding was had -- but not much of an official or documentary character has appeared; and we still decline to enter upon the publication of general remarks on a subject which will soon engross the attention of congress, and probably produce one of the most earnest debates which has ever ensued -- for which, and the papers and facts then to be submitted, we wish to reserve our pages. The effect anticipated is gathering fresh force, in a most severe pressure for money -- which, if not soon relieved, must produce a paralysis in business. New enterprizes are entered upon with extreme caution, and many mercantile and manufacturing operations are suddenly checked. This state of things cannot long continue without producing a large amount of public embarrassment and individual distress.
The following are the only articles which seem to claim a present attention:
From the "Globe" October 9. The following banks, in addition to those heretofore mentioned, have been selected by the secretary of the treasury as depositories of the public money. We understand that sufficient information has not yet been received to enable the secretary to complete his arrangements, but it is expected that the whole will be accomplished in a few weeks. And in several places where only one bank is now selected, it is probable another will be added.Maine bank, Portland, Me.
Commercial bank, Portsmouth, N.H.
Bank of Virginia, Richmond
Bank of South Carolina, Charleston
Planters' Bank of Savannah
Planters' Bank of Mississippi, Natchez
Union Bank of Tennessee, Nashville
Franklin Bank of Cincinnati
Niles' Weekly Register
Baltimore, October 12, 1833.
We learn from the Philadelphia Intelligencer, that the Girard bank of that city, and the Manhattan bank of New York, have made arrangements with the American agent of the Rothschilds of London, for the loan of one million and a half dollars each.
What-- the selected banks borrow money in Europe ! Was it not a crime in the bank of the United States to owe money to foreigners ?
---[Following the death of Steven Girard --who was great friend of the first Bank of the United States, and second largest shareholder in the second Bank of the United States-- four enterprising gentle men acquired the name "Girard Bank" and commenced banking operation, but without the money of Steven Girard. To this new Girard Bank, and to the Manhattan Bank (and to other State banks), the Bank of the United States was a competitor. Now that they were designated as receipients of government deposites --which gave them, and their notes, credit-- would they not be (and have been) supporters of those who opposed and voted against the charter of a new Bank of the United States ? Would NMR behind them, not have been opposed to a Bank of the United States ?
"Nothing but providing for the collection of the public revenue without the instrumentality of banks, can prevent the incorporation of a new federal bank, before three years are over. A large portion of those who have been instrumental in destroying the present one, have been actuated by no motives in the world, but the desire of having a fresh speculation in bank stock to gamble with; and if the real opponents of such a bank upon principle, do not unite in some plan of separating the government from the banking system, they, or their children will live to see the day, when the country will again be convulsed from one extremity to another, as it has been of late." ---Condy Raguet, 1834.
Niles' Weekly RegisterColonization.
Baltimore, November 9, 1833.
The leading purpose of the African colonization policy is to diminish, or keep in check, the progress of the colored population in the United States --and there is nothing more clear to our minds than that this policy is a prudent and proper and humane one, if rightfully carried out. But, as rapidly as the nature of things will permit the proceeding, we should mainly encourage the emigration of young females --one of these being more efficient, as to the purpose stated, than many males. Another cargo of 250 females, chiefly young women, had been lately exported from London for New Holland, to check population at home and increase it in the colony; and such is the most effectual way of doing both. The women, and their increase, are lost to the one, and gained by the other. It is probable, that the export of 15,000 or 16,000 colored females, annually, from the United States, would keep the whole colored population (of more than two millions) completely in check, if persevered in. But this is not desired by some.
There are many and great inducements in the "free states," at least, as well as in Maryland and some others, to rid themselves of a surplus free colored population. These are not of the best class of colored persons. They know enough to feel that they are degraded, and to be almost without a hope of bettering their condition; and hence they become careless of the future, as the following from the "Troy Press" will show:
Extract of a letter from a gentleman of extensive information and philanthropy in the state of New York: "The fact, that out of 40,000 blacks in this state in 1825, but nine hundred and thirty-one were taxed, and but two hundred and ninety-eight were qualified to vote; and the further fact, that this population, according to its amount, furnishes ten-fold more of the inmates of our prisons and alms houses, than our white population does, testifies conclusively to the general improvidence, indolence and abounding viciousness and misery of this unhappy portion of our fellow men."
The following tabular views, taken from the report of the Prison Discipline Society, for 1827, exhibit, in regard to several states, the whole population at that time, the colored population, the whole number of convicts, the number of colored convicts, proportion of colored people to the whole population, and proportion of colored convicts.
It is a great charity to afford to these people an opportunity of removal to Africa --where the color of their skins will not oppose an obstacle to their advancement as men-- as it does and WILL, with us. Let the good be placed within their reach --if they do not embrace it, the fault is their own.