retary proposed to obviate the difficulty by the issue of Treasury notes, to be loaned by the bank, and to be made receivable in the payment of duties. Hence it would seem that State banks were to be cured of their inability, and compelled to pay specie, by placing the speculators, in quest of seven millions of cash, at their counters, ready to grab every dollar that found its way from their vaults; whilst the United States Bank, the great favorite of Government, must be aided, through its debility, by flooding the country with such an abundance of paper money from the Treasury, as would render the disbursement of its gold or silver unnecessary. Here it should be remarked, that although the stock-mongers, who beset this Government, continually sung of the inequalities of exchange, of the depreciation of local bank notes, and the incurable avarice of State banks, yet the bills of many of the banks retained such a credit and public confidence, as to devolve the necessity on the Executive, in seeking to frighten them into certain measures, to threaten the open opposition of the Government, with all its revenue resources, to impair, if possible, the public confidence of their stability. Let gentlemen who desire proof of this attentively read the Treasury letter, of the 29th November, 1816. FEBRUARY, 1819. to everything expressed on its face. Yes; we find the communication consisting of propositions, &c., but all men could read the sense, not expressed, thus: that it would be in vain to petition Congre ss to postpone the day of promptitude beyond the 20th of February, in order to stay the drain of dollars from the State banks, to fill the vaults of their formidable rival; for that the Executive power, which had theretofore been irresistible, would be hostile to every such attempt. The State banks had in view to postpone their specie payments until after all the specie instalments of the capital of the National Bank should be paid in; and the public, as well as the banks, entertained the suspicion, of the subscribers of the United States Bank lying in wait for their specie. But, in the Fall of 1816, the men of the National Bank, who daily became more familiar with the dexterous speculations so common in corporations of trade and exclusive rights, found themselves destitute of the power or disposition to pay either the funded debt or a specie part of the second instalment; on which they, by intrigue among themselves, prompt the Executive to adopt such measures as would impel the local banks to bring their public debt suddenly into market, so as to enable the stockjobbers to acquire it at a reduced price. Let gentlemen again examine the Treasury letter of 29th November, 1816, and acknowledge my conjecture correct, or account for the conduct of the Executive. ་ ers." The act to incorporate the United States Bank passed on the 10th of April, 1816, and, only seventeen days thereafter, Congress adopted the resolution requiring, that, from the 20th of the ensuing February, the revenue of the United States That letter, in speaking of the ability of the should be paid in coin, or in United States Bank banks to return to specie payment, by a reduction notes, (a bank which it was then not certain of their circulating paper, remarks, that "the would ever exist,) or in the paper of such banks requisite reduction of the circulating paper may as redeemed their bills in specie. The avowed be effected by the State banks, either by curtailobject of this resolution was, not only to coerce ing their discounts or by, the sale of the publie the payment of specie by the State banks, but to 'debt, of which they are known to be the holdlimit the very day and hour of that event; and "And that "curtailment of discounts has this, too, at a time when the State banks and the been the only process resorted to by them, where State governments were pursuing a course to any effort has been made to prepare for the rereform the currency, by the only gradual and 'sumption of specie payments." The letter sure means which were compatible as well with enters upon arguments to show that the banks the interests of the public as the security of thewould sustain no loss by selling their public banks. This resolution seems to have been wanted by the Executive, as an instrument of hostility against State banks, to be used or not, as future convenience might require, and the day of cash payments was placed subsequent to the ensuing session of Congress, that it might be modified or repealed if the capital of the United States Bank should not be subscribed, or in case any mishap should befall that institution: hence we have seen that (on the subject of the resolution) a dead silence reigned in the Treasury, until after the following midsummer. The books of subscription to the stock of the great bank were opened on the first Monday of July; and about the time that intelligence reached the seat of Government that the stock of the National Bank was all subscribed, and when the Executive believed itself no longer in need of the assistance of the local banks, about this time, I say, (22d July, 1816,) the Treasury made its official communication to the banks-a communication carrying to every auditory a distinct and well understood meaning, in addition debt instead of curtailing their discounts, and expresses indignation against the conduct of the banks and the practice of curtailing discounts, as productive of great individual suffering, which the banks disregarded, and pronouncing, at the same time, that reason, humanity, and sound policy, all united against the curtailment of bank discounts. I ask, whether such a letter, and from such a source, has ever before been witnessed? I ask, in the name of all that is just and sacred, from whence arose the difference, to the Execu tive, between a return to specie payments by curtailment of discounts and the sale of public debt; and I demand the reason of this unhallowed and rude Executive interference in the interior policy of our State institutions, that, by the acknowledg ment of the Treasury, were honestly preparing to meet their specie engagements, by gradually calling in the debts justly due them? I will not for a moment harbor the evil thought, of a wish by the Executive to render the local banks unpopular by these loud complaints of individual hardship; but, to show the inconsistency attending such complaints, when coming from the Treasury, it is only necessary to appeal to the same letter, where the advice, that the State banks should sell their public debt, is enforced from the consideration that the precious metals had, in a certain late interval, continued to flow into the country from abroad, in quantities sufficient to reduce the premium on specie, &c. If, then, the stock of precious metals of the country was so replenished that many millions of public debt might suddenly and safely be thrown into the market, and sold for hard cash without risking loss, let me ask, whether the same abundant supply of specie would not have enabled the bank debtors to make payments, by which their debts might be gradually diminished? The Treasury and National Bank, in the Fall and Winter of 1816-17, exhibited by their relations, each to the other, a singular spectacle. The Treasury acknowledging itself at once the protector and dependant of the new institution, makes a voluntary tender of a profusion of Government favors, which the bank declines, but finds itself dumb to every inquiry for the motives of its refusal. The Treasury having in vain urged the local banks to resume specie payments on the 20th February, instead of the 1st July, determined, after the 20th February, to refuse the paper of the non-paying banks, and make the National Bank the exclusive receptacle of the revenue, which would draw to it, in addition to its business paper, and ordinary loans, the whole occupation of discounting for the accommodation of the debtors to the Treasury for duties, and thus enable it to employ advantageously the $4,200,000 specie, which should be in its vaults in January, 1817, and the $7,000,000 of specie which it would hold in July of the same year. But the National Bank, knowing its own secrets, and that a collusion subsisted between itself and its stockholders, by which the second specie payment would not be made as required by the charter, and that, if the Treasury refused the State bank notes, it would devolve on the great bank the necessity of making such numerous loans, as would, within a few weeks, or indeed a few days, draw from its vaults every dollar of the specie received on the first instalment, without even the possibility of extending to the speculating stockholders the enormous accommodations they had in view-it had, therefore, no resort, but to wrestle with the Treasury in support of the credit of the State banks; and, although by this deceptive conduct, it was saved from the ruin of its own delinquency, in failing to comply with the instalments required by its charter, it has encountered the hardihood of appearing before our select committee, with a claim to merit for its pretended magnanimity in relation to the local banks. The Treasury still persevered in its courtly offers to the new bank, and to relieve it from the peril of ruin by the loss of specie, on the contemplated refusal of State bank paper, addressed it with a proposal to aid its operations by the issue of Treasury paper, receivable in payment of duties, and to be loaned H. OF R. by the bank, for Government, under circumstances by which the specie might not be endangered. This offer also was declined, from the intimate knowledge which the bank had of its own secrets. It knew that the small compensation it would be entitled to for loaning the Government's paper would scarcely increase the stock dividends, and that without a larger dividend the price of stock must diminish, which would be ruinous, or at least injurious, to the speculators who controlled its operations. It moreover knew that the loans which the fifth of specie, paid by the first instalment, could afford, would not furnish a dividend to increase the price of stock. Its policy, therefore, was to have the Treasury balances against the old banks tranferred to it; to indulge the old banks, on their agreement to pay an interest, which would swell the dividends without the risk of danger, in case Government would continue to receive the State bank paper in the collection of the revenue. Hence, the new bank turned from the Treasury offers, and sought a correspondence with the State banks; proposing that they should humor the Executive by agreeing to pay specie on the 20th February, and that it would draw from the Treasury all the balances against them, and indulge them until the 1st July, (their own time,) on receiving interest in the interval. The times of the payment of the instalments to the Bank of the United States were fixed by the charter; the books were opened the first Monday of July, 1816, at which time it is believed a great portion of the stock was subscribed. One instalment was then payable, and the two others on the corresponding days of January and July, 1817. Yet, by some calculation which I have never been able to understand, the instalments were not considered as due until the 23d January, 1817, and the 23d July. It is well known that the State banks, from a view of the charter, fixed on the first day of July for the resumption of specie payments, on a supposition that it was the time at which the last instalment would be received by the National Bank. Whether the bank thus past dated the instalments to overreach the period fixed by the State banks, and to give its subscribers three weeks' play on the vaults of the local banks to raise the specie of the last instalment, or whether such feats of ingenuity are customary in the intercourse among these moneyed companies, I am unable to say, I am, however, willing to say, that I should not condemn the bank, were this its only transgression. I will now, sir, pray your attention to the agreement of the 31st January, 1817, between the Bank of the United States and the incorporated banks of New York, Philadelphia, Baltimore, Richmond, and Norfolk, by which the latter banks yield to the proposal to pay specie on the 20th February instead of the 1st July. The second proposition of that agreement, by which the balances against those banks were transferred from the Treasury to the United States Bank, was duly performed by it, being altogether to its advantage, and to the prejudice of the State banks, by the amount of interest received by the one and paid by the other. By the third proposition, the Bank of the United States was not to demand those balances until it should discount for individuals (other than those having duties to pay) six millions, as prescribed by the terms of the contract. There is no express stipulation binding the United States Bank to discount for those having duties to pay, but every one who reads will be convinced that all parties expected it was to afford those discounts; yet the United States Bank so contrived, by encouraging the receipt of floating State bank notes at the Treasury, as to make it unnecessary to afford accommodations to the importers, although, from the circumstance of the revenue bonds being payable at the United States Bank and its branches, it was expected that many applications would have been made for loans as they fell due. Our Executive Government was a party to this arrangement; one feature of which carries with it an idea irreconcilable with justice or good report. I mean the second proposition-which bestows on this new corporation a claim of interest against the State banks, on the balances due the Government, without any compensation to the Treasury-against all previous practice, in behalf of speculators, and to the prejudice of the public. It is not denied that the United States Bank ought to have received interest, if the balances had been received as a general deposite, on which the Government could have been at liberty to draw at pleasure, either for specie or the paper of the National Bank; but this was not the case, for, by the exception contained in the second proposition, the United States was to draw from the State banks such parts of said balances as might be wanted by the Treasury, and consequently had no right, in any event, to draw on the National Bank for any part of the balance for which it received interest. The transaction remained precisely as if the State bank paper had been in the Treasury, to be used or not, at the pleasure of Government, during all the time the banks were paying interest on it to the new bank. It amounted, in truth, to the gift of an unwarrantable speculation by the Executive to the bank. FEBRUARY, 1819. to accredit the subscribers at least sixty days for the specie of the second instalment, which would authorize its payment after the 20th of February, when it might be taken from the State banks. I now proceed to examine whether the charter of the National Bank has been violated by the omission to pay the second and third instalments of the capital, as prescribed by the act of incorporation. The third section of the act declares "that the sums subscribed shall be payable and paid in the manner following-that is to say, seven millions of dollars thereof in gold or sil' ver coin of the United States, or in gold coin of Spain or the dominions of Spain, and twentyone millions of dollars thereof in like gold or 'silver coin, or in the funded debt of the United States." And further, that "the payments of 'the said subscriptions shall be made and completed by the subscribers respectively, at the times and in the manner following-that is to paid five dollars on each share, in gold or silver say, at the time of subscribing, there shall be coin as aforesaid, and twenty-five dollars more, in coin or funded debt; at the expiration of six calendar months from the time of subscribing, there shall be paid the further sum of ten dollars on each share, in gold or silver coin, and twenty-five dollars more, in coin or funded debt; at the expiration of twelve calendar months from the time of subscribing, there shall be paid 'the further sum of ten dollars on each share, in gold or silver coin, and twenty-five dollars more, 6 6 in coin or funded debt." The terms of the law to which I have thus adverted, prescribe not only the amount of funds to be advanced as capital, but the time of payment and the quality or sort of funds; and, judging both from the letter and spirit of the law, we are bound to pronounce that the time and quality of the funds were as material and important in the view of the Legislature, as the quantity. It was certainly essential that the whole one hundred dollars of each share should be paid; and equally necessary that twenty dollars of the second and third instalments should be paid in gold or silver coin, and that the residue should be paid in coin or public debt. But all sides admit that neither the specie nor public debt proportion of the second or third instalments were paid. I therefore insist that a violation and consequent forfeiture of charter has been incurred by that delinquency. When viewed in another light, the agreement of the 31st January, 1817, was a palpable fraud by the United States Bank on the State banks. By the terms of the charter of the former, its second specie instalment was payable in January, and all parties well knew that the State banks Some gentlemen allege, that the mere negative the more readily assented to the contract in con- offence of non-payment of instalments by indisequence of the understanding that the four mil-vidual stockholders, or any number of stockholdlion two hundred thousand dollars, the specie part of the first and second instalments, had been paid into the vaults of the United States Bank, and consequently was not to be drawn from the metallic resources of the other institutions; whereas the directors and stockholders of the United States Bank, with a full knowledge of the existence of this expectation on the other side, and at the very time whilst negotiating the agreement, were making a collusive arrangement ers, should not be deemed a violation of the charter on the part of the bank. But, let it be remembered, that the charge is not rested on the mere delinquency of stockholders, incurred against the will of the bank; for the corporation itself participated in the offence, having, by its corporate and official act, interfered, and dispensed the stockholders from a compliance with the law, by usurping the power of inviting and accepting an arrangement, not only different from, but mani festly contradictory to, the terms of the act of Congress. An attempt is made to satisfy the public, that the signing and delivery of promissory notes by the stockholders is verily a payment of gold and silver coin, and of public debt, as required by the law; an attempt, supported by an appearance of argument, well suited to the ingenuity of one who would avow his ability to prove that the law might be evaded with impunity. The ingenuity of the bank officers has led them to state the question, with its result, thus: "The charter enabled the bank to commence operations, and, consequently, to make discounts on the receipt of the amount of the first instalment; subscrib'ers as well as others, then, had a right to obtain 'loans of the bank before the payment of the 'second instalment. A subscriber having ob'tained a loan, had a consequent right to draw its ' amount from the bank in specie, and might im'mediately return the same specie to the bank in 'payment of his second instalment. The draft of specie from, and its return to, the bank, being circumstances of mere form, might be dis'pensed with, and the mere note of the subscriber ' accepted in lieu of coin, as he could, by turning 'round, convert the proceeds into coin." H. OF R. require the actual payment of specie, and thus to contradict the first principle he had assumed or acknowledged. Permit me now to place the argument before noticed in its true light. The speculator then acknowledges his obligation to pay $7,000,000 in gold or silver to the bank, but he claims a distinct, separate, unconnected right—a right to ob tain a loan; by the exercise of which, he virtually exempts himself from the force of his obligation. I then accept his acknowledgment of obligation to pay the $7,000,000 in specie, and yield to him the right to obtain loans, in consequence of which he shall take all the benefit he asks; the sum of all which is, that his offence or delinquency of non-payment of specie is so intermingled or amalgamated with the exercise of a right, with which he is invested, that it may be difficult or impossible to distinguish the offence or wrong of his delinquency in one case, from the exercise of his right on the other occasion. But, although the imagination may be puzzled by hypothetical cases, wherein it may be difficult to distinguish the commission of crime from the exercise of right, there is fortunately no such ambiguity as regards the conduct of the United States Bank. It has, in intercourse with its In answer to these turns and twists of inge- stockholders, separated very distinctly the offence nuity, I would remind gentlemen that this char- of delinquency from any supposed general exerter (as every other law) must be so construed, as cise of right. It has informed the stockholder that no part of it shall be void or insignificant; that he had no perfect or absolute right to obtain and that, whilst one part of the third section re-loans, inasmuch as no one could claim a right to quires that a certain proportion of each instal- borrow without the consent of the lender; that, ment shall be paid in specie, another part of the without its assent, his pretended right was a nulsame section expressly requires that the aggre- lity; that it would only yield its consent on the gate amount of the specie part of the capital shall condition of his agreeing that he would not pay be seven millions of dollars, in gold or silver the second specie instalment, or redeem his faith, coin. Now, the arguments by which I am op- pledged to itself, the Treasury, the Government, posed, although unsound, would sustain a better or American people, as prescribed by the inconcolor if the clauses, requiring the payment of ten venient stipulations of the charter. To prove dollars specie of the first and ten dollars specie this, I demand your attention to the resolutions of the second instalment, stood unconnected from of the board of directors, of the 18th and 27th of every other part of the law; but, taking the whole December, 1816, by which the corporation agrees third section in view, we find not only an obli- to discount "for the accommodation of the stockgation to pay a certain proportion of successive holders exclusively, and to the amount of their instalments in specie, but to pay them in such respective proportions of the payments, in coin, manner as will produce an aggregate of seven of the second instalment of the capital of the millions of dollars in gold and silver coin ; a re-bank." And, again, "that the loans should be sult at which we could never arrive by paying, and redrawing and repaying the same or identical pieces of coin. The argument on the other side is inadmissible; as, by seeking to show the discharge of an instalment without the actual advance of specie, it would necessarily make nugatory the provision which calls for specie. This false notion of successive payments, by paying, and shifting, and repaying the same dollar, so as to pay a debt of three dollars in full, and yet remain indebted two dollars, acquires its chiefest force from the dash of presumption of the speculator, in disconcerting his opponent by hardihood of assertion; for, assuming the act of Congress requiring the actual payment of specie as a text or early principle of argument, the speculator openly apprizes us that he means from hence to carry you to the conclusion that the law does not 6 made only to stockholders paying in full the second instalment." I also refer to the form of hypothecation of stock, prescribed by the corporation, by which the stockholder was made to acknowledge "that he had obtained a loan of the 'said bank for the specie proportion of the second instalment of the capital thereof, due by him on that day." Again, the cashier of the mother bank sends this form of mortgage to the branch bank at Baltimore, with this notice: "Enclosed you have the form used at this bank, of an engagement to be entered into by those who obtain an accommodation for the specie part of the second instalment." I appeal also to the evidence accompanying the report of the select committee, from which it is manifest that the bank was not, in consequence of any ordinary operations of banking, placed in the unfortunate situation of being forced to receive from the left hand of the stockholder the dollars he had withdrawn from the vault by his right; but, on the contrary, the avowed purpose of the institution was to dispense with the law-dispense with the specie required by the charter, and receive the note or bond of the party, in lieu of cash. In truth, the remission of the specie instalments was a criminal and detestable collusion between the bank and the stockjobbing portion of its subscribers, in fraud and prejudice of the Government, the public, and the widows and orphans-those org hans of whom we now hear so much-who are made to weep and plead for this combination of speculators, that they may again incur the risk of being cheated by partners that have not capital to risk, or are unwilling to risk it. FEBRUARY, 1819. rectors shall constitute a board for the transaction of business, of whom the president shall be one, &c. How, then, can it be pretended, that the President, without the other directors, is to exercise powers which Congress has vested in a number of directors, not less than seven? The president of the bank has informed the select committee that he considered these operations by himself and the clerk as mere ministerial acts, which might as well have been done by the discount clerk. While I admit that the board had as much pretence to transfer the power of making loans to the clerk, who is not even a director, as to the president and clerk; and hence infer the absurdity of the notion of the board alienating to a stranger the important trusts confided to them by the Government, the stockA gentleman from South Carolina, in speak- holders, and the public law, which gave birth to ing with reference to the defalcation of the sec- the institution. I also insist that this absurdity ond instalment, in the desultory debate which is not removed, or softened, by ranking the faculty occurred in originating the select committee, re. as a ministerial power. No one who had read minded us that the non-payment of the second and attentively considered the act of incorporainstalment had been agitated in the fourteenth tion, and who was not a wag, would seek to cariCongress, and seemed to consider that circum-cature the corporation by bringing it in comstance as affording a bar to prevent us from passing judgment on it. It does appear that, in 1817, the committee on the national currency was directed to inquire into this affair, and actually proceeded the length of inquiring of one of the directors, by a polite note, how the thing was, and afterwards made a lengthy report, consisting of a letter from this director, (Mr. Lloyd,) which, in substance, assured the committee that the directors were all honest men, and had committed the crime charged against them with an only eye to the public good; and, being thus convinced, from the mouth of one of the directors, that no harm was intended, the committee asked the House to discharge it from further inquiry into such a delicate subject. But this House made no decision on the propriety or wrong of the conduct of the bank: on the contrary, it suffered the business to lie on the table, so as not to bind it from acting as future circumstances migh: dictate. parison with our political Government, and assigning to it departments, legislative, executive, and judicial, or judicial and ministerial. Gentlemen, however, are at liberty to call the powers usurped by the president and cashier ministerial, or by such other denomination as may strike the fancy or square with their judgment; it will, after all names are spent, or under every classifi cation of heads, remain what it was at and after the 8th of August, 1817, (when conferred by the board,) a power to make and renew loans, and discount bills on personal security, which is of the ordinary business of the board of bank directors, and consequently embraced by the letter and spirit of the fourth article of the charter; and, whenever it can be shown that these acts are ministerial, it will follow that the ordinary acts of the directors are also ministerial. The dangerous precedent furnished by this aberration from the constitution of the bank cannot be too strongly deprecated; for, with equal plausibility, I will now remind the House of another topic might the directors chaffer with or alienate every of the report of the select committee, which man- other important power conferred by the charter. ifests, in my humble judgment, a violation of the The order of the board defining the description bank charter. The president and cashier, as well of loans which was put under the control of the of the mother bank as of some of the branches, president and cashier, was nothing more or less have, under pretence of authority from the board than a by-law of the corporation; in which view of directors, exercised the power, first, of making the question again only recurs, whether the didiscounts on pledges of stock; secondly, of renew-rectors can, through the instrumentality of a bying loans on pledges of stock; and, thirdly, of purchasing bills of exchange. These three powers are of the same nature and altitude, although the latter, involving the necessity of judging of the solvency and sufficiency of the parties to the bills, would generally be more susceptible of alarm than the powers to loan and renew loans at a given rate on pledges of stock. But neither of these three powers could be exercised on be-grown stockholders, and the speculations in pubhalf of the corporation, except by the board of directors. The fourth fundamental article of the charter speaks in language incapable of misconstruction, declaring that no less than seven di law, vest in one man, or a stranger, the power of lending the money of the corporation, which the charter has virtually declared shall not be loaned by less than seven directors. The select committee has reproached, in strong terms, two practices of the corporation, that of the subdivision of shares and the conse quent increase of votes for directors, by the over lic stock by the directors, whose official stations subjected their characters and motives to the lash of censure. With the honorable committee I follow suit, in its moral disrelish of the intrigue of |