1828.1829.1830.1831.1. New-York,11,938,35011,294,9609,168,37012,284,3202. Philadelphia,4,453,1504,106,9854,579,7255,398,8003. Boston,1,010,7301,844,1701,794,7501,816,4304. Baltimore,1,437,1001,420,3601,376,3201,588,68018,888,33018,666,47516,919,16021,092,230
After exhibiting this table, and taking it for complete proof of the truth of the theory which he had laid down, and that it demonstrated the impossibility of keeping up a circulation of the United States Bank paper in the remote and interior parts of the Union, Mr. B. went on to say that the story was yet but half told—the mischief of this systematic flow of national currency to the Northeast, was but half disclosed; another curtain was yet to be lifted—another vista was yet to be opened—and the effect of the system upon the metallic currency of the States was to be shown to the people and the States. This view would show, that as fast as the checks or notes of any branch were taken up at the mother bank, or at the branches north of the Potomac, an account was opened against the branch from which they came. The branch was charged with the amount of the notes or checks taken up; and periodically served with a copy of the account, and commanded to send on specie or bills of exchange to redeem them. When redeemed, they were remitted to the branch from which they came; while on the road they were called notes in transitu; and when arrived they were put into circulation again at that place—fell into the current immediately, which carried them back to the Northeast—there taken up again, charged to the branch—the branch required to redeem them again with specie or bills of exchange; and then returned to her, to be again put into circulation, and to undergo again and again, and until the branch could no longer redeem them, the endless process of flowing to the Northeast. The result of the whole was, is, and for ever will be, that the branch will have to redeem its circulation till redemption is impossible;until it has exhausted the country of its specie; and then the country in which the branch is situated is worse off than before she had a branch; for she had neither notes nor specie left. Mr. B. said that this was too important a view of the case to be rested on argument and assertion alone; it required evidence to vanquish incredulity, and to prove it up; and that evidence was at hand. He then referred to two tables to show the amount of hard money which the mother bank, under the operation of this system, had drawn from the States in which her branches were situated. All the tables were up to the year 1831, the period to which the last investigating committee had brought up their inquiries. One of these statements showed the amount abstracted from the whole Union; it was $40,040,622 20; another showed the amount taken from the Southern and Western States; it was $22,523,387 94; another showed the amount taken from the branch at New Orleans; it was $12,815,798 10. Such, said Mr. B., has been the result of the experiment to diffuse a national paper currency over this extended Union. Twice in eighteen years it has totally failed, leaving the country exhausted of its specie, and destitute of paper. This was proof enough, but there was still another mode of proving the same thing; it was the fact of the present amount of United States Bank notes in circulation. Mr. B. had heard with pain the assertion made in so many memorials presented to the Senate, that there was a great scarcity of currency; that the Bank of the United States had been obliged to contract her circulation in consequence of the removal of the deposits, and that her notes had become so scarce that none could be found; and strongly contrasting the present dearth which now prevails with the abundant plenty of these notes which reigned over a happy land before that fatal measure came to blast a state of unparalleled prosperity. The fact was, Mr. B. said, that the actual circulation of the bank is greater now than it was before the removal of the deposits; greater than it has been in any month but one for upwards of a year past. The discounts were diminished, he said, but the circulation was increased.
Mr. B. then exhibited a table of the actual circulation of the Bank of the United States for the whole year 1833, and for the two past months of the present year; and stated it to be taken from the monthly statements of the bank, as printed and laid upon the tables of members. It was the net circulation—the quantity of notes and checks actually out—excluding all that were on the road returning to the branch banks, called notes in transitu, and which would not be counted till again issued by the branch to which they were returned.
The following is the table:
January, 1833,$17,666,444February, 1833,18,384,050March, 1833,18,033,205April, 1833,18,384,075May, 1833,18,991,200June, 1833,19,366,555July, 1833,18,890,505August, 1833,18,413,287September, 1833,19,128,189October, 1833,18,518,000November, 1833,18,650,912December, 1833,not found.January, 1834,19,208,375February, 1834,19,260,472
By comparing the circulation of each month, as exhibited on this table, Mr. B. said, it would be seen that the quantity of United States Bank notes now in circulation is three quarters of a million greater than it was in October last, and a million and a half greater than it was in January, 1833. How, then, are we to account for this cry of no money, in which so many respectable men join? It is in the single fact of their flow to the Northeast. The pigeons, which lately obscured the air with their numbers, have all taken their flight to the North! But pigeons will return of themselves, whereas these bank notes will never return till they are purchased with gold and silver, and brought back. Mr. B. then alluded to a petition from a meeting in his native State, North Carolina, and in which one of his esteemed friends (Mr. Carson) late a member of the House of Representatives, was a principal actor, and which stated the absolute disappearance of United States Bank notes from all that region of country. Certainly the petition was true in that statement; but it is equally true that it was mistaken in supposing that the circulation of the bank was diminished. The table which he had read had shown the contrary; it showed an increase, insteadof a diminution, of the circulation. The only difference was that it had all left that part of the country, and that it would do for ever! If a hundred millions of United States Bank notes were carried to the upper parts of North Carolina, and put into circulation, it would be but a short time before the whole would have fallen into the current which sweeps the paper of that bank to the Northeast. Mr. B. said there were four other classes of proof which he could bring in, but it would be a consumption of time, and a work of supererogation. He would not detail them, but state their heads: 1. One was the innumerable orders which the mother bank had forwarded to her branches to send on specie and bills of exchange to redeem their circulation—to pour in reinforcements to the points to which their circulation tends; 2. Another was in the examination of Mr. Biddle, president of the bank, by the investigating committee, in 1832, in which this absorbing tendency of the branch paper to flow to the Northeast was fully charged and admitted; 3. A third was in the monthly statement of the notesin transitu, which amount to an average of four millions and a half for the last twelve months, making fifty millions for the year; and which consist, by far the greater part, of branch notes and checks redeemed in the Northeast, purchased back by the branches, and on their way back to the place from which they issued; and, 4. The last class of proof was in the fact, that the branches north of the Potomac, being unable or unwilling to redeem these notes any longer, actually ceased to redeem them last fall, even when taken in revenue payment to the United States, until coerced by the Secretary of the Treasury; and that they will not be redeemed for individuals now, and are actually degenerating into a mere local currency. Upon these proofs and arguments, Mr. B. rested his case, and held it to be fully established first, by argument, founded in the nature of bank circulation over an extended territory; and secondly, by proof, derived from the operation of the present bank of the United States, that neither the present bank, nor any one that the wisdom of man can devise, can ever succeed in diffusing a general paper circulation over the States of this Union.
VI. Dropping every other objection to the bank—looking at it purely and simply as a supplier of national currency—he, Mr. B., could not consent to prolong the existence of the present bank. Certainly a profuse issue of paper at all points—an additional circulation of even a few millions poured out at the destitute points—would make currency plenty for a little while, but for a little while only. Nothing permanent would result from such a measure. On the contrary, in one or two years, the destitution and distress would be greater than it now is. At the same time, it is completely in the power of the bank, at this moment, to grant relief, full, adequate, instantaneous relief! In making this assertion, Mr B. meant to prove it; and to prove it, he meant to do it in a way that it should reach the understanding of every candid and impartial friend that the bank possessed; for he meant to discard and drop from the inquiry, all his own views upon the subject; to leave out of view every statement made, and every opinion entertained by himself, and his friends, and proceed to the inquiry upon the evidence of the bank alone—upon that evidence which flowed from the bank directory itself, and from the most zealous, and best informed of its friends on this floor. Mr. B. assumed that a mere cessation to curtail discounts, at this time, would be a relief—that it would be the salvation of those who were pressed—and put an end to the cry of distress; he averred that this curtailment must now cease, or the bank must find a new reason for carrying it on; for the old reason is exhausted, and cannot apply. Mr. B. then took two distinct views to sustain his position: one founded in the actual conduct and present condition of the bank itself, and the other in a comparative view of the conduct and condition of the former Bank of the United States, at the approaching period of its dissolution.
I. As to the conduct and condition of the present bank.
Mr. B. appealed to the knowledge of all present for the accuracy of his assertion, when he said that the bank had now reduced her discounts, dollar for dollar, to the amount of public deposits withdrawn. The adversaries of the bank said the reduction was much larger than the abstraction; but he dropped that, and confined himself strictly to the admissions and declarations of the bank itself. Taking then the fact to be, as the bank alleged it to be, that she had merely brought down her business in proportionto the capital taken from her, it followed of course that there was no reason for reducing her business any lower. Her relative position—her actual strength—was the same now that it was before the removal; and the old reason could not be available for the reduction of another dollar. Next, as to her condition. Mr. B. undertook to affirm, and would quickly prove, that the general condition of the bank was better now than it had been for years past; and that the bank was better able to make loans, or to increase her circulation, than she was in any of those past periods in which she was so lavishly accommodating the public. For the proof of this, Mr. B. had recourse to her specie fund, always the true test of a bank's ability, and showed it to be greater now than it had been for two years past, when her loans and circulation were so much greater than they are now. He took the month of May, 1832, when the whole amount of specie on hand was $7,890,347 59; when the net amount of notes in circulation was $21,044,415; and when the total discounts were $70,428,070 72: and then contrasted it with the condition of the bank at this time, that is to say, in the month of February last, when the last return was made; the items stands thus: specie, $10,523,385 69; net amount of notes in circulation, $19,260,472; total discounts, $54,842,973 64. From this view of figures, taken from the official bank returns, from which it appeared that the specie in the bank was nearly three millions greater than it was in May, 1832, her net circulation nearly two millions less, and her loans and discounts upwards of fifteen millions less; Mr. B. would submit it to all candid men to say whether the bank is not more able to accommodate the community now than she was then? At all events, he would demand if she was not now able to cease pressing them?
II. As to the comparative condition and conduct of the first Bank the United States at the period of its approaching dissolution.
Mr. B. took the condition of the bank from Mr. Gallatin's statement of its affairs to Congress, made in January, 1811, just three months before the charter expired; and which showed the discounts and loans of the bank to be $14,578,294 25, her capital being $10,000,000; so that the amount of her loans, three months before her dissolution, was nearly in proportion—near enough for all practical views—to the proportion which the present loans of the Bank of the United States bear to its capital of thirty-five millions. Fifty per cent. upon the former would give fifteen millions; fifty per cent. upon the latter would give fifty-two millions and a half. To make the relative condition of the two banks precisely equal, it will be sufficient that the loans and discounts of the present bank shall be reduced to fifty-two millions by the month of January, 1836; that is to say, it need not make any further sensible reduction of its loans for nearly two years to come. Thus, the mere imitation of the conduct of the old bank will be a relief to the community. A mere cessation to curtail, will put an end to the distress, and let the country go on, quietly and regularly, in its moneyed operations. If the bank will not do this—if it will go on to curtail—it is bound to give some new reason to the country. The old reason, of the removal of the deposits, will no longer answer. Mr. B. had no faith in that reason from the beginning, but he was now taking the bank upon her own evidence, and trying her upon her own reasons, and he held it to be impossible for her to go on without the production of a reason. The hostility of the government—rather an incomprehensible, and altogether a gratuitous reason, from the beginning—will no longer answer. The government in 1811 was as hostile to the old bank, as the government now is to this one; and rather more so. Both Houses of Congress were then hostile to it, and hostile unto death! For they let it die! die on the day appointed by law for its death, without pity, without remorse, without the reprieve of one day. The government can do no worse now. The Secretary of the Treasury has removed the deposits; and that account is settled by the reduction of an equal amount of loans and discounts. The rest depends upon the government; and the hostility of the government cannot go further than to kill the bank, and cannot kill it more dead than the old bank was killed in 1811. Mr. B. had a further comparison to draw between the conduct of the old bank, and the present one. The old bank permitted her discounts to remain at their maximum to the very end of her charter; she discounted sixty days' paper up to the last day of her existence; while this bank has commenced a furious curtailment two years and a half beforethe expiration of her charter. Again: the old bank had not an hour, as a corporation, to wind up her business after the end of her charter; this bank has the use of all her corporate faculties, for that purpose, for two years after the end of her charter. Again: the present bank pretends that she will have to collect the whole of her debts within the period limited for winding up her affairs; the old bank took upwards of twelve years after the expiration of her charter to collect hers! She created a trust; she appointed trustees; all the debts and credits were put into their hands, the trustees proceeded like any other collectors, giving time to all debtors who would secure the debt, pay interest punctually, and discharge the principal by instalments. This is what the old bank did; and she did not close her affairs until the 16th of June, in the year 1823. The whole operation was conducted so gently, that the public knew nothing about it. The cotemporaries of the dissolution of the bank, knew nothing about its dissolution. And this is what the present bank may do, if it pleases. That it has not done so—that it is now grinding the community, and threatening to grind them still harder, is a proof of this dangerous nature of a great moneyed power; and should be a warning to the people who now behold its conduct—who feel its gripe, and hear its threat—never to suffer the existence of such another power in our free and happy land.
VII. Mr. B. deprecated the spirit which seemed to have broken out against State banks; it was a spirit which augured badly for the rights of the States. Those banks were created by the States; and the works of the States ought to be respected; the stock in those banks was held by American citizens, and ought not to be injuriously assailed to give value to stock held in the federal bank by foreigners and aliens. The very mode of carrying on the warfare against State banks, has itself been an injury, and a just cause of complaint. Some of the most inconsiderable have been picked out—their affairs presented in the most unfavorable light; and then held forth as a fair sample of the whole. How much more easy would it have been to have acted a more grateful, and a more equitable part! a part more just to the State governments which created those banks, and the American citizens who held stock in them! Instead of hunting out for remote and inconsiderable banks, and instituting a most disparaging scrutiny into their small affairs, and making this high Senate the conspicuous theatre for the exhibition of their insignificance, why not take the higher order of the State banks?—those whose names and characters are well known? whose stock upon the exchange of London and New-York, is superior to that of the United States Bank? whose individual deposits are greater than those of the rival branches of the Bank of the United States, seated in their neighborhood? whose bills of exchange are as eagerly sought for as those of the federal bank? which have reduced exchange below the rates of the federal bank? and which, in every particular that tries the credit, is superior to the one which is receiving so much homage and admiration? Mr. B. said there were plenty of such State banks as he had described; they were to be found in every principal city, from New Orleans to Boston. Some of them had been selected for deposit banks, others not; but there was no difficulty in making a selection of an ample number.
This spirit of hostility to the State banks, Mr. B. said, was of recent origin, and seemed to keep pace with the spirit of attack upon the political rights of the States. When the first federal bank was created, in the year 1791, it was not even made, by its charter, a place of deposit for the public moneys. Mr. Jefferson preferred the State banks at that time; and so declared himself in his cabinet opinion to President Washington. Mr. Gallatin deposited a part of the public moneys in the State banks during the whole of the long period that he was at the head of the treasury. At the dissolution of the first Bank of the United States, he turned over all the public moneys which he held in deposit to these banks, taking their obligation to pay out all the treasury warrants drawn upon them in gold and silver, if desired by the holder. When the present bank was chartered, the State banks stood upon an equal footing with the federal bank, and were placed upon an equality with it as banks of deposit, in the very charter which created the federal bank. Mr. B. was alluding to the 14th fundamental article of the constitution of the bank—the article which provided for the establishment of branches—and which presented an argument in justification ofthe removal of the deposits which the adversaries of that measure most pertinaciously decline to answer. The government wanted banks of deposit, not of circulation; and by that article, the State banks are made just as much banks of deposit for the United States as the Bank of the United States is. They are put upon exact equality, so far as the federal government is concerned; for she stipulates but for one single branch of the United States Bank, and that to be placed at Washington city. As for all other branches, their establishment was made to depend—not on the will, or power, of the federal government—not on any supposed or real necessity on her part to have the use of such branches—but upon contingencies over which she had no control; contingencies depending, one upon the mere calculation of profit and loss by the bank itself, the other upon the subscriptions of stock within a State, and the application of its legislature. In these contingencies, namely, if the Bank of the United States thought it to her interest to establish branches in the States, she might do it; or, if 2,000 shares of stock was subscribed for in a State, and thereupon an application was made by the State legislature for the institution of a branch, then its establishment within the State became obligatory upon the bank. In neither contingency had the will, the power, or the necessities of the federal government, the least weight, concern, or consideration, in the establishment of the branch. If not established, and so far as the government is concerned, it might not be, then the State banks, selected by the United States Bank, and approved by the Secretary of the Treasury, were to be the banks of deposit for the federal moneys. This was an argument, Mr. B. said, in justification of the removal of the deposits, and in favor of the use of the State banks which gentlemen on the opposite side of the question—gentlemen who take so much pains to decry State banks—have been careful not to answer.
The evils of a small paper circulation, he considered among the greatest grievances that could afflict a community. The evils were innumerable, and fell almost exclusively upon those who were least able to bear them, or to guard against them. If a bank stops payment, the holders of the small notes, who are usually the working part of the community, are the last to find it out, and the first to suffer. If counterfeiting is perpetrated, it is chiefly the small notes which are selected for imitation, because they are most current among those who know the least about notes, and who are most easily made the dupes of imposition, and the victims of fraud. As the expeller of hard money, small notes were the bane and curse of a country. A nation is scarce, or abundant, in hard money, precisely in the degree in which it tolerates the lower denominations of bank notes. France tolerates no note less than $100; and has a gold and silver circulation of 350 millions of dollars. England tolerates no note of less than $25; and has a gold and silver circulation of 130 millions of dollars: in the United States, where $5 is the minimum size of the federal bank notes, the whole specie circulation, including what is in the banks, does not amount to thirty millions of dollars. To increase the quantity of hard money in the United States, and to supply the body of the people with an adequate specie currency to serve for their daily wants, and ordinary transactions, the banknote circulation below twenty dollars, ought to be suppressed. If Congress could pass a law to that effect, it ought to bed one; but it cannot pass such a law: it has no constitutional power to pass it. Congress can, however, do something else, which will, in time, effectually put down such a currency. It can discard it, and disparage it. It can reject it from all federal payments. It can reject the whole circulation of any bank that will continue to issue small notes. Their rejection from all federal payments, would check their currency, and confine the orbit of their circulation to the immediate neighborhood of the issuing bank. The bank itself would find but little profit from issuing them—public sentiment would come to the aid of federal policy. The people of the States, when countenanced and sustained by the federal government, would indulge their natural antipathy and honest detestation of a small paper currency. They would make war upon all small notes. The State legislatures would be under the control of the people; and the States that should first have the wisdom to limit their paper circulation to a minimum of twenty dollar bills, would immediately fill up with gold and silver. The common currency would be entirely metallic; and there would be a broad and solid basis for a superstructure of large notes; whilethe States which continued to tolerate the small notes, would be afflicted with all the evils of a most pestilential part of the paper system,—small notes, part counterfeit, part uncurrent, half worn out; and all incapable of being used with any regard to a beneficial economy. Mr. B. went on to depict the evils of a small note currency, which he looked upon as the bane and curse of the laboring part of the community, and the reproach and opprobrium of any government that tolerated it. He said that the government which suffered its currency to fall into such a state that the farmer, the artisan, the market man, the day laborer, and the hired servant, could only be paid in small bank notes, was a government which abdicated one of its most sacred duties; and became an accomplice on the part of the strong in the oppression of the weak.
Mr. B. placed great reliance upon the restoration of the gold currency for putting down a small note circulation. No man would choose to carry a bundle of small bank notes in his pocket, even new and clean ones, much less old, ragged, and filthy ones, when he could get gold in their place. A limitation upon the receivability of these notes, in payment of federal dues, would complete their suppression. Mr. B. did not aspire to the felicity of seeing as fine a currency in the United States as there is in France, where there was no bank note under five hundred francs, and where there was a gold and silver circulation at the rate of eleven dollars a head for each man, woman, and child, in the kingdom, namely, three hundred and fifty millions of dollars for a population of thirty-two millions of souls; but he did aspire to the comparative happiness of seeing as good currency established for ourselves, by ourselves, as our old fellow-subjects—the people of old England—now possess from their king, lords, and commons. They—he spoke of England proper—had no bank note less than five pounds sterling, and they possessed a specie circulation (of which three-fourths was gold) at the rate of about nine dollars a head, men, women, children (even paupers) included; namely, about one hundred and thirty millions for a population of fourteen millions. He, Mr. B., must be allowed to aspire to the happiness of possessing, and in his sphere to labor to acquire, as good a circulation as these English have; and that would be an immeasurable improvement upon our present condition. We have local bank notes of one, two, three, four dollars; we have federal bank notes of five and ten dollars—the notes of those English who are using gold at home while we are using their paper here:—we have not a particle of gold, and not more silver than at the rate of about two dollars a head, men, women, children (even slaves) included; namely, about thirty millions of silver for a population of thirteen millions. Mr. B. believed there was not upon the face of the earth, a country whose actual currency was in a more deplorable condition than that of the United States was at present; the bitter fruit of that fatal paper system which was brought upon us, with the establishment of the first Bank of the United States in 1791, and which will be continued upon us until the citadel of that system—the Bastile of paper money, the present Bank of the United States,—shall cease to exist.
Mr. B. said, that he was not the organ of the President on this floor—he had no authority from the President to speak his sentiments to the Senate. Even if he knew them, it would be unparliamentary, and irregular, to state them. There was a way for the Senate to communicate with the President, which was too well known to every gentleman to require any indication from him. But he might be permitted to suggest—in the absence of all regular information—that if any Senator wished to understand, and to comment upon, the President's opinions on currency, he might, perhaps, come something nearer to the mark, by commenting on what he (Mr. B.) had been saying, than by having recourse to the town meeting reports of inimical bank committees.
The House of Representatives had appointed a select committee of its members to investigate the affairs of the Bank of the United States—seven in number, and consisting of Mr. Francis Thomas, of Maryland; Mr. Edward Everett, of Massachusetts; Mr. Henry A. Muhlenberg, ofPennsylvania; Mr. John Y. Mason, of Virginia; Mr. W. W. Ellsworth, of Connecticut; Mr. Abijah Mann, Jr. of New-York; Mr. Robert T. Lytle, of Ohio. The authority under which the committee acted, required them to ascertain: 1. The causes of the commercial embarrassment, and the public distress complained of in the numerous distress memorials presented to the two Houses during the session; and whether the bank had been any way instrumental, through its management or money, in producing the distress and embarrassment, of which so much complaint was made. 2. To inquire whether the charter of the bank had been violated; and what corruptions and abuses, if any, had existed in its management. 3. To inquire whether the bank had used its corporate power, or money, to control the press, to interpose in politics, or to influence elections. The authority conferred upon the committee was ample for the execution of these inquiries. It was authorized to send for persons and papers; to summon and examine witnesses on oath; to visit, if necessary, the principal bank, and its branches; to inspect the books, correspondence and accounts of the bank, and other papers connected with its management. The right of the House to make this investigation was two-fold:first, under the twenty-third article of the charter:secondly, as the founder of the corporation; to whom belongs, in law language, the right to "visit" the institution it has founded; which "visiting" is for examination—as a bishop "visits" his diocese—a superintendent "visits" the works and persons under his care; not to see them, but to examine into their management and condition. There was also, athirdright of examination, resulting from the act of the corporation; it was again soliciting a re-charter, and was bound to show that the corporators had used their actual charter fairly and legally before it asked for another. And,fourthly, there was a further right of investigation, still resulting from its conduct. It denied all the accusations brought against it by the government directors, and brought before Congress by the Secretary of the Treasury; and joined issue upon those accusations in a memorial addressed to the two Houses of Congress, To refuse examination under these circumstances would be shrinking from the issue which itself had joined. The committee proceeded to Philadelphia, and soon found that the bank did not mean to submit to an examination. Captious and special pleading objections were made at every step, until attempts on one side and objections on the other ended in a total refusal to submit their books for inspection, or themselves for an examination. The directors had appointed a company of seven to meet the committee of the House—a procedure unwarranted by any right or usage, and offensive in its pretentious equality; but to which the committee consented, at first, from a desire to do nothing to balk the examination. That corporation committee was to sit with them, in the room in the bank assigned for the examination; and took care always to pre-occupy it before the House committee arrived; and to act as if at home, receiving guests. The committee then took a room in a hotel, and asked to have the bank books sent to them; which was refused. They then desired to have the books subjected to their inspection in the bank itself; in which request they were baffled, and defeated. The bank committee required written specification of their points of inquiry, either in examining a book, or asking a question—that it might judge its legality; which they confined to mere breaches of the charter. And when the directors were summoned to answer questions, they refused to be sworn, and excused themselves on the ground of being parties to the proceeding. Some passages from the committee's report will show to what extent this higgling and contumacy was carried by this corporation—deriving its existence from Congress, and endeavoring to force a renewed charter from it while refusing to show how it had used the first one. Thus:
"On the 23d of April, their chairman addressed to the President of the bank, a communication, inclosing a copy of the resolution of the House of Representatives, and notifying him of the readiness of the committee to visit the bank on the ensuing day, at any hour agreeable to him. In reply, the President informed the committee that the papers thus received should be submitted to the board of directors, at a special meeting to be called for that purpose. It appears, in the journal of the proceedings of the committee, herewith presented to the House, that this was done, and that the directors appointed a committee of seven of their board, to receive the committee of the House of Representatives, and to offer for their inspection such books and papers of the bank, as may be necessary to exhibit the proceedings of the corporation,according to the requirement of the charter. In the letter of John Sergeant, Esq., as chairman of the committee of directors communicating the proceedings of the board, he says that he was directed to inform the chairman of this committee that the committee of the directors 'will immediately direct the necessary arrangements to be made for the accommodation of the committee of the House of Representatives,' and would attend at the bank to receive them the next day, at eleven o'clock. Your committee attended, and were received by the committee of directors."Up to this period, nothing had occurred to justify the belief that a disposition was felt, on the part of the managers of the bank, to embarrass the proceedings of the committee, or have them conducted differently from those of the two preceding committees of investigation. On assembling, however, the next morning, at the bank, they found the room which had been offered for their accommodation, preoccupied by the committee of the board, with the president of the bank, as anex officiomember, claiming the right to be present at the investigations and examinations of this committee. This proceeding the committee were not prepared to expect. When the appointment of the committee of seven was first made, it was supposed that that measure, however designed, was not well calculated to facilitate the examination."With a previous determination to be present when their books were to be inspected, they could have waited to avow it until these books were called for, and the attempt made to inspect them in their absence. These circumstances are now reviewed, because they then excited an apprehension, which the sequel formed into conviction, that this committee of directors had been appointed to supervise the acts and doings of your committee, and to limit and restrain their proceedings, not according to the directions contained in the resolution of the House, but the will and judgment of the board of directors. Your committee have chosen to ascribe this claim of the committee of directors to sit conjointly with them, to the desire to prevent them from making use of the books and papers, for some of the purposes pointed out by the resolution of the House. They are sensible that this claim to be present at all examinations, avowed prematurely, and subsequently persisted in with peculiar pertinacity, could be attributed to very different motives; but respect for themselves, and respect for the gentlemen who compose the committee of directors, utterly forbids the ascription to them of a feeling which would merit compassion and contempt much more than resentment."This novel position, voluntarily and deliberately taken by the committee of the directors, predicated on an idea of equality of rights with your committee, under your resolution, rendered it probable, and in some measure necessary, that your committee should express its opinions of the relative rights of the corporation and the House of Representatives. To avoid all misunderstanding and future misrepresentations, it was desirable that each question should be decided separately. Contemplating an extended investigation, but unwilling that an apprehension should exist of improper disclosures being made of the transactions of the bank and its customers your committee, following the example of the committee of 1832, adopted a resolution declaring that their proceedings should be confidential, until otherwise ordered by the committee, and also a resolution that the committee would conduct its investigations 'without the presence of any person not required or invited to attend.' A copy of these resolutions was furnished to the committee of directors, in the hope that the exclusive control of a room at the bank, during its hours of business, would thereafter be conceded to your committee, while the claim of the committee of directors to be present when the books were submitted for inspection, should be postponed for decision, when the books were called for and produced by them."On the 28th ult. this committee assembled at the banking house, and again found the room they expected to find set apart for their use, preoccupied by the committee of directors, and others, officers of the bank. And instead of such assurances as they had a right to expect, they received copies of two resolutions adopted by the board of directors, in which they were given to understand that their continued occupation of the room must be considered a favor and not a matter of right; and in which the board indulge in unjust commentaries on the resolution of the House of Representatives; and intimate an apprehension that your committee design to make their examinations secret, partial, unjust, oppressive and contrary to common right."
"On the 23d of April, their chairman addressed to the President of the bank, a communication, inclosing a copy of the resolution of the House of Representatives, and notifying him of the readiness of the committee to visit the bank on the ensuing day, at any hour agreeable to him. In reply, the President informed the committee that the papers thus received should be submitted to the board of directors, at a special meeting to be called for that purpose. It appears, in the journal of the proceedings of the committee, herewith presented to the House, that this was done, and that the directors appointed a committee of seven of their board, to receive the committee of the House of Representatives, and to offer for their inspection such books and papers of the bank, as may be necessary to exhibit the proceedings of the corporation,according to the requirement of the charter. In the letter of John Sergeant, Esq., as chairman of the committee of directors communicating the proceedings of the board, he says that he was directed to inform the chairman of this committee that the committee of the directors 'will immediately direct the necessary arrangements to be made for the accommodation of the committee of the House of Representatives,' and would attend at the bank to receive them the next day, at eleven o'clock. Your committee attended, and were received by the committee of directors.
"Up to this period, nothing had occurred to justify the belief that a disposition was felt, on the part of the managers of the bank, to embarrass the proceedings of the committee, or have them conducted differently from those of the two preceding committees of investigation. On assembling, however, the next morning, at the bank, they found the room which had been offered for their accommodation, preoccupied by the committee of the board, with the president of the bank, as anex officiomember, claiming the right to be present at the investigations and examinations of this committee. This proceeding the committee were not prepared to expect. When the appointment of the committee of seven was first made, it was supposed that that measure, however designed, was not well calculated to facilitate the examination.
"With a previous determination to be present when their books were to be inspected, they could have waited to avow it until these books were called for, and the attempt made to inspect them in their absence. These circumstances are now reviewed, because they then excited an apprehension, which the sequel formed into conviction, that this committee of directors had been appointed to supervise the acts and doings of your committee, and to limit and restrain their proceedings, not according to the directions contained in the resolution of the House, but the will and judgment of the board of directors. Your committee have chosen to ascribe this claim of the committee of directors to sit conjointly with them, to the desire to prevent them from making use of the books and papers, for some of the purposes pointed out by the resolution of the House. They are sensible that this claim to be present at all examinations, avowed prematurely, and subsequently persisted in with peculiar pertinacity, could be attributed to very different motives; but respect for themselves, and respect for the gentlemen who compose the committee of directors, utterly forbids the ascription to them of a feeling which would merit compassion and contempt much more than resentment.
"This novel position, voluntarily and deliberately taken by the committee of the directors, predicated on an idea of equality of rights with your committee, under your resolution, rendered it probable, and in some measure necessary, that your committee should express its opinions of the relative rights of the corporation and the House of Representatives. To avoid all misunderstanding and future misrepresentations, it was desirable that each question should be decided separately. Contemplating an extended investigation, but unwilling that an apprehension should exist of improper disclosures being made of the transactions of the bank and its customers your committee, following the example of the committee of 1832, adopted a resolution declaring that their proceedings should be confidential, until otherwise ordered by the committee, and also a resolution that the committee would conduct its investigations 'without the presence of any person not required or invited to attend.' A copy of these resolutions was furnished to the committee of directors, in the hope that the exclusive control of a room at the bank, during its hours of business, would thereafter be conceded to your committee, while the claim of the committee of directors to be present when the books were submitted for inspection, should be postponed for decision, when the books were called for and produced by them.
"On the 28th ult. this committee assembled at the banking house, and again found the room they expected to find set apart for their use, preoccupied by the committee of directors, and others, officers of the bank. And instead of such assurances as they had a right to expect, they received copies of two resolutions adopted by the board of directors, in which they were given to understand that their continued occupation of the room must be considered a favor and not a matter of right; and in which the board indulge in unjust commentaries on the resolution of the House of Representatives; and intimate an apprehension that your committee design to make their examinations secret, partial, unjust, oppressive and contrary to common right."
On receiving this offensive communication, manifestly intended to bring on a quarrel, the committee adopted a resolution to sit in a room of their hotel, and advised the bank accordingly; and required the president and directors to submit the books to their inspection in the room so chosen, at a day and hour named. To this the directors answered that they could not comply; and the committee, desirous to do all they could to accomplish the investigation committed to them, then gave notice that they would attend at the bank on a named day and hour to inspect the books in the bank itself—either at the counter, or in a room. Arriving at the appointed time, and asking to see the books, they were positively refused, reasons in writing being assigned for the refusal. They then made a written request to see certain books specifically and for a specified purpose, namely, to ascertainthe truth of the report of the government directors in using the money and power of the bank in politics, in elections, or in producing the distress. The manner in which this call was treated must be given in the words of the report itself; thus:
"Without giving a specific answer to these calls for books and papers, the committee of directors presented a written communication, which was said to be 'indicative of the mode of proceeding deemed right by the bank.'"The committee of the board in that communication, express the opinion, that the inquiry can only be rightfully extended to alleged violations of the charter, and deny virtually the right of the House of Representatives to authorize the inquiries required in the resolution."They also required of the committee of investigation, 'when they asked for books and papers, to state specifically in writing, the purposes for which they are proposed to be inspected; and if it be to establish a violation of the charter, then to state specifically in writing, what are the alleged or supposed violations of charter, to which the evidence is alleged to be applicable.'"To this extraordinary requirement, made on the supposition that your committee were charged with the duty of crimination, or prosecution for criminal offence, and implying a right on the part of the directors to determine for what purposes the inspection should be made, and what books or papers should be submitted to inspection, your committee replied, that they were not charged with the duty of criminating the bank, its directors, or others; but simply to inquire, amongst other things, whether any prosecution in legal form should be instituted, and from the nature of their duties, and the instructions of the House of Representatives, they were not bound to state specifically in writing any charges against the bank, or any special purpose for which they required the production of the books and papers for inspection."
"Without giving a specific answer to these calls for books and papers, the committee of directors presented a written communication, which was said to be 'indicative of the mode of proceeding deemed right by the bank.'
"The committee of the board in that communication, express the opinion, that the inquiry can only be rightfully extended to alleged violations of the charter, and deny virtually the right of the House of Representatives to authorize the inquiries required in the resolution.
"They also required of the committee of investigation, 'when they asked for books and papers, to state specifically in writing, the purposes for which they are proposed to be inspected; and if it be to establish a violation of the charter, then to state specifically in writing, what are the alleged or supposed violations of charter, to which the evidence is alleged to be applicable.'
"To this extraordinary requirement, made on the supposition that your committee were charged with the duty of crimination, or prosecution for criminal offence, and implying a right on the part of the directors to determine for what purposes the inspection should be made, and what books or papers should be submitted to inspection, your committee replied, that they were not charged with the duty of criminating the bank, its directors, or others; but simply to inquire, amongst other things, whether any prosecution in legal form should be instituted, and from the nature of their duties, and the instructions of the House of Representatives, they were not bound to state specifically in writing any charges against the bank, or any special purpose for which they required the production of the books and papers for inspection."
The committee then asked for copies of the accounts and entries which they wished to see, and were answered that it would require the labor of two clerks for ten months to make them out; and so declined to give the copies. The committee finding that they could make nothing out of books and papers, determined to change their examination of things into that of persons; and for that purpose had recourse to the subpœnas, furnished by the House; and had them served by the United States marshal on the president and directors. This subpœna, which contained a clause ofduces tecum, with respect to the books, was so far obeyed as to bring the directors in person before the committee; and so far disobeyed as to bring them without the books, and so far exceeded as to bring them with a written refusal to be sworn—for reasons which they stated. But this part deserves to be told in the language of the report; which says:
"Believing they had now exhausted, in their efforts to execute the duty devolved upon them, all reasonable means depending solely upon the provisions of the bank charter, to obtain the inspection of the books of this corporation, your committee were at last reluctantly compelled to resort to the subpœnas which had been furnished to them under the seal of this House, and attested by its clerk. They, thereby, on the 9th inst. directed the marshal of the eastern district of Pennsylvania to summon Nicholas Biddle, president, and thirteen other persons, directors of the bank, to attend at their committee room, on the next day, at twelve o'clock, at noon, to testify concerning the matters of which your committee were authorized to inquire, and to bring with them certain books therein named for inspection. The marshal served the summons in due form of law, and at the time appointed, the persons therein named appeared before the committee and presented a written communication signed by each of them, as the answer of each to the requirements of the subpœna, which is in the appendix to this report. In this paper they declare 'that they do not produce the books required, because they are not in the custody of either of us, but as has been heretofore stated, of the board,' and add, 'considering that as corporators and directors, we are parties to the proceeding—we do not consider ourselves bound to testify, and therefore respectfully decline to do so.'"
"Believing they had now exhausted, in their efforts to execute the duty devolved upon them, all reasonable means depending solely upon the provisions of the bank charter, to obtain the inspection of the books of this corporation, your committee were at last reluctantly compelled to resort to the subpœnas which had been furnished to them under the seal of this House, and attested by its clerk. They, thereby, on the 9th inst. directed the marshal of the eastern district of Pennsylvania to summon Nicholas Biddle, president, and thirteen other persons, directors of the bank, to attend at their committee room, on the next day, at twelve o'clock, at noon, to testify concerning the matters of which your committee were authorized to inquire, and to bring with them certain books therein named for inspection. The marshal served the summons in due form of law, and at the time appointed, the persons therein named appeared before the committee and presented a written communication signed by each of them, as the answer of each to the requirements of the subpœna, which is in the appendix to this report. In this paper they declare 'that they do not produce the books required, because they are not in the custody of either of us, but as has been heretofore stated, of the board,' and add, 'considering that as corporators and directors, we are parties to the proceeding—we do not consider ourselves bound to testify, and therefore respectfully decline to do so.'"
This put an end to the attempted investigation. The committee returned to Washington—made report of their proceedings, and moved: "That the speaker of this House do issue his warrant to the sergeant-at-arms, to arrest Nicholas Biddle, president—Manuel Eyre, Lawrence Lewis, Ambrose White, Daniel W. Cox, John Holmes, Charles Chauncey, John Goddard, John R. Neff, William Platt, Matthew Newkirk, James C. Fisher, John S. Henry, and John Sergeant, directors—of the Bank of the United States, and bring them to the bar of this House to answer for the contempt of its lawful authority." This resolve was not acted upon by the House; and the directors had the satisfaction to enjoy a negative triumph in their contempt of the House, flagrant as that contempt was upon its own showing, and still more so upon its contrast with the conduct of the same bank(though under a different set of directors), in the year 1819. A committee of investigation was then appointed, armed with the same powers which were granted to this committee of the year 1834, and the directors of that time readily submitted to every species of examination which the committee chose to make. They visited the principal bank at Philadelphia, and several of its branches. They had free and unrestrained access to the books and papers of the bank. They were furnished by the officers with all the copies and extracts they asked for. They summoned before them the directors and officers of the bank, examined them on oath, took their testimony in writing—and obtained full answers to all their questions, whether they implied illegalities violative of the charter, or abuses, or mismanagement, or mistakes and errors.
About the time when the panic was at its height, and Congress most heavily assailed with distress memorials, the Secretary of the Treasury was called upon by a resolve of the Senate for a report upon the finances—with the full belief that the finances were going to ruin, and that the government would soon be left without adequate revenue, and driven to the mortifying resource of loans. The call on the Secretary was made early in May, and was answered the middle of June; and was an utter disappointment to those who called for it. Far from showing the financial decline which had been expected, it showed an increase in every branch of the revenue! and from that authentic test of the national condition, it was authentically shown that the Union was prosperous! and that the distress, of which so much was heard, was confined to the victims of the United States Bank, so far as it was real; and that all beyond that was fictitious and artificial—the result of the machinery for organizing panic, oppressing debtors, breaking up labor, and alarming the timid. When the report came into the Senate, the reading of it was commenced at the table of the Secretary, and had not proceeded far when Mr. Webster moved to cease the reading, and send it to the Committee on Finance—that committee in which a report of that kind could not expect to find either an early or favorable notice. We had expected a motion to get rid of it, in some quiet way, and had prepared for whatever might happen. Mr. Taney had sent for me the day before it came in; read it over with me; showed me all the tables on which it was founded; and prepared me to sustain and emblazon it: for it was our intention that such a report should go to the country, not in the quiet, subdued tone of a State paper, but with all the emphasis, and all the challenges to public attention, which the amplifications, the animation, and the fire and freedom which the speaking style admitted. The instant, then, that Mr. Webster made his motion to stop the reading, and refer the report to the Finance Committee, Mr. Benton rose, and demanded that the reading be continued: a demand which he had a right to make, as the rules gave it to every member. He had no occasion to hear it read, and probably heard nothing of it; but the form was necessary, as the report was to be the text of his speech. The instant it was done, he rose and delivered his speech, seizing the circumstance of the interrupted reading to furnish the brief exordium, and to give a fresh and impromptu air to what he was going to say. The following is the speech:
Mr. Benton rose, and said that this report was of a nature to deserve some attention, before it left the chamber of the Senate, and went to a committee, from which it might not return in time for consideration at this session. It had been called for under circumstances which attracted attention, and disclosed information which deserved to be known. It was called for early in May, in the crisis of the alarm operations, and with confident assertions that the answer to the call would prove the distress and the suffering of the country. It was confidently asserted that the Secretary of the Treasury had over-estimated the revenues of the year; that there would be a great falling off—a decline—a bankruptcy; that confidence was destroyed—enterprise checked—industry paralyzed—commerce suspended! that the direful act of one man, in one dire order, had changed the face of the country, from a scene of unparalleled prosperity to a scene of unparalleleddesolation! that the canal was a solitude, the lake a desert waste of waters, the ocean without ships, the commercial towns deserted, silent, and sad; orders for goods countermanded; foreign purchases stopped! and that the answer of the Secretary would prove all this, in showing the falsity of his own estimates, and the great decline in the revenue and importations of the country. Such were the assertions and predictions under which the call was made, and to which the public attention was attracted by every device of theatrical declamation from this floor. Well, the answer comes. The Secretary sends in his report, with every statement called for. It is a report to make the patriot's heart rejoice! full of high and gratifying facts; replete with rich information; and pregnant with evidences of national prosperity. How is it received—how received by those who called for it? With downcast looks, and wordless tongues! A motion is even made to stop the reading! to stop the reading of such a report! called for under such circumstances; while whole days are given up to reading the monotonous, tautologous, and endless repetitions of distress memorials, the echo of our own speeches, and the thousandth edition of the same work, without emendation or correction! All these can be read, and printed, too, and lauded with studied eulogium, and their contents sent out to the people, freighted upon every wind; but this official report of the Secretary of the Treasury, upon the state of their own revenues, and of their own commerce, called for by an order of the Senate, is to be treated like an unwelcome and worthless intruder; received without a word—not even read—slipped out upon a motion—disposed of as the Abbé Sieyes voted for the death of Louis the Sixteenth:mort sans phrase!death, without talk! But he, Mr. B., did not mean to suffer this report to be dispatched in this unceremonious and compendious style. It had been called for to be given to the people, and the people should hear of it. It was not what was expected, but it is what is true, and what will rejoice the heart of every patriot in America. A pit was dug for Mr. Taney; the diggers of the pit have fallen into it; the fault is not his; and the sooner they clamber out, the better for themselves. The people have a right to know the contents of this report, and know them they shall; and if there is any man in this America, whose heart is so constructed as to grieve over the prosperity of his country, let him prepare himself for sorrow; for the proof is forthcoming, that never, since America had a place among nations, was the prosperity of the country equal to what it is at this day!
Mr. B. then requested the Secretary of the Senate to send him the report, and comparative statements; which being done, Mr. B. opened the report, and went over the heads of it to show that the Secretary of the Treasury had not over-estimated the revenue of the year, as he had been charged, and as the report was expected to prove: that the revenue was, in fact, superior to the estimate; and that the importations would equal, if not exceed, the highest amount that they had ever attained.
To appreciate the statements which he should make, Mr. B. said it was necessary for the Senate to recollect that the list of dutiable articles was now greatly reduced. Many articles were now free of duty, which formerly paid heavy duties; many others were reduced in duty; and the fair effect of these abolitions and reductions would be a diminution of revenue even without a diminution of imports; yet the Secretary's estimate, made at the commencement of the session, was more than realized, and showed the gratifying spectacle of a full and overflowing treasury, instead of the empty one which had been predicted; and left to Congress the grateful occupation of further reducing taxes, instead of the odious task of borrowing money, as had been so loudly anticipated for six months past. The revenue accruing from imports in the first quarter of the present year, was 5,344,540 dollars; the payments actually made into the treasury from the custom-houses for the same quarter, were 4,435,386 dollars; and the payments from lands for the same time, were 1,398,206 dollars. The two first months of the second quarter were producing in a full ratio to the first quarter; and the actual amount of available funds in the treasury on the 9th day of this month, was eleven millions, two hundred and forty-nine thousand, four hundred and twelve dollars. The two last quarters of the year were always the most productive. It was the time of the largest importations of foreign goods which pay most duty—the woollens—and the season, also, for the largest sale of public lands. It is well believed that the estimate will be more largely exceededin those two quarters than in the two first; and that the excess for the whole year, over the estimate, will be full two millions of dollars. This, Mr. B. said, was one of the evidences of public prosperity which the report contained, and which utterly contradicted the idea of distress and commercial embarrassment which had been propagated, from this chamber, for the last six months.
Mr. B. proceeded to the next evidence of commercial prosperity; it was the increased importations of foreign goods. These imports, judging from the five first months, would be seven millions more than they were two years ago, when the Bank of the United States had seventy millions loaned out; and they were twenty millions more than in the time of Mr. Adams's administration. At the rate they had commenced, they would amount to one hundred and ten millions for the year. This will exceed whatever was known in our country. The imports, for the time that President Jackson has served, have regularly advanced from about $74,000,000 to $108,000,000. The following is the statement of these imports, from which Mr. B. read: