Imágenes de páginas


Bank of the United States.

H. of R.

right to redeem the stock which had been sold in England. The loss which the purchasers would in this way have sustained would have impeached the credit of the bank. To maintain it, the Secretary of the Treasury proposed that the bank should purchase, on account of the Government, the same amount of stock which it had sold; and

which the practice of lending upon stock tended to remove. But when it was considered that the whole amount of stock loans, for the safety of which personal security could be at all necessary, was in Philadelphia $173,450, and in Baltimore $276,823, it must be admitted that there might be a very free exchange of names in those cities, and these inconsiderable amounts be yet effectu-it did so. ally secured. He thought it not unlikely that The charter provides that the bank shall not the committee had fallen into the error of com- purchase any public stock. The merest verbal paring the personal security not with the moder-construction of the sentence-the interpretation ate sum to which it was applicable, (the excess of the loan above the par value of the stock,) but with the large sum, for which there was another and an adequate security, (that of the stock.)

to be obtained from a dictionary-would be, that that the bank should not "acquire by buying," it should not become the owner, by purchase, of the public stock. And it did not. There was If the loans on stock were considered safe, the not a moment during which the bank was the only class of debts which the committee, from owner of the stock, which was at once transferred any information before them, had reason to sup- from the individuals who sold it to the Commispose exposed to risk, (and they had that reason sioners of the Sinking Fund. But he would only from their magnitude,) was that of the debts willingly waive the verbal question. What was due in the Western States. He had admitted the intention of the provision? That the bank that some years must pass before the greater part should not become the owner of funded stock, so of these could be paid. But, although the cir- as to enhance the price when the Government cumstances of those States made it likely that wanted to buy, or to reduce it when it wanted to they could not be promptly paid, he saw no rea- borrow. And how could either of these evils reson to believe that they might not be paid even- sult from its buying at the instance of the Govtually. In the meantime, they might be consid-ernment, and for the benefit of the Government, ered as diminishing the active capital of the bank. It is, however, by no means true, (where the condition of the country or the charter of a bank prevents it from owning funded stock,) that long loans to individuals may not properly be made-but he was afraid to engage in this digression.

any amount of stock whatever? But it did not act, the report says, as an agent in the purchase of the stock, because it contributed out of its own funds a part of the price. The committee appeared to him to have confounded two acts which were very distinct. The bank, if the Secretary was right, was clearly bound to pay the difference He had as yet said nothing as to the violation between the par value of stock and its actual of the charter. It was, indeed, in his view of the price to those to whom they had sold it as irrematter, a subject of no great importance to deter-deemable, but in whose hands the Secretary demine whether a legal and technical violation had termined to redeem it. It was as well to pay it been committed. If the public interest required to the Government. Suppose it to have done so, that the institution should be preserved, the Le- (and it substantially did,) where was the law gislature would preserve for the same reasons for which forbade it, although it had contributed a which they had established it. The question of part of the funds, to act in its usual and convelaw would be much better discussed by those who nient character of the agent of the Government. were acquainted with its intricacies, and he had detained the Committee so long upon the other branches of the argument, that he would comment very briefly upon this. He differed, he believed, upon this subject, from all the members of the committee. He thought that none of the acts alleged amounted to a violation of the


If the purchase in question be one which is prohibited by the charter, the directors who sanctioned it are liable by law to a very heavy fine. Would any member propose that they should be prosecuted for this act of defence and benefaction to the Government? Could it be that this purchase was not such a "dealing in stock" as could subject the individuals who made it to personal responsibility, and yet, that it should subject the institution itself to the penalty of disso

The first violation of the charter, as alleged in the report, was that of purchasing two millions of public debt. The bank, when engaged in im-lution? porting specie from Europe, had sold two millions The second alleged violation of charter conof its funded stock in England. This stock, insisted in not requiring the payment of the second the hands of the bank, was redeemable at the pleasure of the Government. Before it had been subscribed to the bank, it had been, by the condition of the loan, irredeemable until the year 1825. The bank supposed that it was restored to this irredeemable character when it again became private property. He confessed that he thought so; and he believed it to be a common, and even the general opinion. The Secretary of the Treasury thought otherwise, and insisted upon the

or third instalments in coin and funded debt. What are the powers of the directors as to the debts due to the institution generally? They may change the security, they may prolong their credit, they may vary both the time and place of payment. Mr. L. did not see, when the bank was once in operation, that the power of the directors, in respect to instalments, was not precisely the same as in every other debt. The committee say that the bank should have insisted upon

[blocks in formation]

"the specific thing." When a bank is once in operation, it must consider its own notes as specie; and, under the compact with the State banks, the National Bank was, in fact, obliged to consider their notes as specie. The question, indeed, resolves itself into two: 1. Ought notes of the National or State banks to have been admitted in payment of the instalments? 2. Ought any discounts to have been made to subscribers to the bank?

Can it be seriously contended that the bank ought not to have received its own notes as specie? You appear at the counter with $1,000 in its paper. It refuses to receive it, and insists that you should go through the process of causing the specie to be brought from its vaults, paid to you by the teller, and then to the teller by you, and everything would be formal and right. The silver might then be restored to its former place. So even with the State bank notes. The National Bank, it is said, ought not to have received them. You must then have drawn specie out of the State bank, paid it into the National Bankthe National Bank, under its compact, must have lent it immediately to the State bank from which it had been drawn; and, after the whole manœuvre was over, the specie must have resumed the position which it had left in the morning. There was but one possible mode by which the payment of the instalment "in the specific thing" could have been secured, (if it could have been at all secured,) by delaying the commencement of operations until they were paid. The attempt would have been very injurious to the country, it was incompatible with the proposals of the Government, and was interdicted by the law. He had enlarged enough upon this subject in the commencement of his observations. The large amount of notes which the bank threw into circulation, if not a single note had been discounted for a subscriber, would have had the effect of causing the instalments to be paid in notes, not in coin. They would be paid in whichever of these articles could be most easily obtained, and if the issue of it was large, the article most easily obtained must be paper.

It was hardly important, then, if they discounted at all, whether they discounted to subscribers or not. But why should they not? The very business for which the directors were appointed was to lend money. If a subscriber paid one moment, the directors might properly lend to him the next. If specie were drawn from a State bank in one hour, they would properly lend it to the bank the hour after. Did not this imply that they might prolong the credit of the subscriber, and receive the note of the bank?

The observations which he had made applied to the discounts for instalments generally. There were peculiar reasons in favor of those which were made between the 3d and 23d of January, 1817, under the resolution of December 18, which made the conduct of the bank in relation to them not only allowable, but wise. He had neither strength nor time to enter into the inquiry, but he had on his table the names of all the discounters, and an ex


amination would show that they were not, in general, large stockholders, and that the great proportion of their notes was paid at maturity.

But the report says that the directors abandoned the means of coercion given by the charter, and gained nothing. It was true that, in discounting a note for a subscriber, to enable him to pay his instalment, they gave up the means of coercion which the withholding the dividends might furnish. But did they gain nothing? Was it not notorious that, under the common construction of the charter, it was considered fair, and not discreditable, to postpone payment of the instalment and abandon the dividend? No man's credit has been hurt by this delay in paying the instalment. The first gain of the bank, then, was that of pledging the personal credit of the subscriber to his punctuality. The second advantage which the bank gained, it might have been expected, could not have been overlooked or disputed-the actual payment of one-fourth part of each share in funded stock. The third advantage was the pledge of stock, with the power immediately to sell it upon the failure of the subscriber to pay his note. He would venture to say that there was not one of these notes, the payment of which, at maturity, might not have been enforced by this provision. The statement given by the committee of the price of stocks during the year 1817, would establish this proposition.

He must here suggest the argument which had been anticipated by the gentleman from Virginia. In January, 1817, if the transaction of which he was speaking was wrong and mischievous, Congress knew it-knew it in time to prevent it. A committee was instructed to inquire into the subject. This committee reported that there was no occasion for the interposition of Congress, and Congress did not interfere. A friend of his from Georgia, proposed a resolution that the public deposites should be withheld, while the plan which the committee disapprove was persevered in. The resolution was adequate to its object. The House did not take it up. Since that time how many purchasers have become interested in the stock, who have never suspected that Congress would punish vindictively an act which it would not interpose to prevent!

The third instance of violation of charter, is said to consist in the payments of dividends to delinquent stockholders. These dividends were paid when their subscriptions were received, and they ceased to be delinquent. If he understood the documents, the whole amount of dividends so paid, of which he had any evidence, was $1,460; but from this the interest which they paid must be deducted, and they possibly received $360 more than they were entitled to. The precise amount, indeed, is not important. And by whom were these dividends paid? Did the directors order-did they know it? ally did not think that the payment of three or four hundred dollars, however erroneously, by a subordinate officer, could be justly punished by the loss of the charter of the bank, or, to take

He re

[blocks in formation]

the test proposed by the committee, "that it defeated the very objects of its institution."

The fourth alleged violation consisted in allowing bad votes to be given at elections. Without reference to the number of these votes, or to their effect upon the election, he was willing to leave the charge, without argument, to the Committee.

H. or R.

gations of an oath, require of me a particular course. Under such circumstances, whether I sink or swim on the tide of popular favor, is to me a matter of inferior consideration. It is my misfortune, also, to follow, in this debate, the gentleman from South Carolina, (Mr. LOWNDES,) whose views are, in the general, most luminous and correct. Upon this question, however, I am forced to differ from him. Sir, the gentleman has dwelt upon the benefits arising from the bank. He has presented you, alone, the fair side of the picture. In many of his views I concur with him, but it becomes us to examine both sides of the painting. He has represented this institution as vitally connected with the prosperity of the country. Its destruction is to be

He had attempted to show that the dissolution of the bank charter, as a measure of policy, was not wise-as a penalty, that it was not legal. But what is just? You allege that the institution has been mismanaged. You admit that the stockholders have been the principal sufferers, and, in resentment of their wrongs, you ruin them. You censure the conduct of a direction of which you appointed the most active mem-attended with the most fatal consequences. And bers and the head, and you mulct, perhaps to the ruin of their fortunes, the men whose error consists in supporting your appointments, and confiding in your superintendence.

On the whole, he should vote against all the resolutions before the Committee. His friend from Virginia had said that a_Legislature may repeal any of its acts. Can a Legislature make a contract? To assume the power of annulling contracts, is to lose the privilege of making them.

The proposal for issuing a scire facias had certainly the recommendation of being within the Constitutional powers of Congress. He had endeavored to show that it had no other.

are we come to this? Shall we be forced to countenance speculation and fraud from the fear of encountering the evils of putting down this system? Is it so completely interwoven with our best interests as to endanger those interests by putting it down? Does this Government, indeed, rest on this corporation for stability and support? I cannot believe it. We are not yet reduced to such a state of degradation. Sir, if the gentleman from South Carolina had exerted his talents for the purpose of devising a scheme by which we could have successfully extricated ourselves from our present embarrassing situation, I cannot but think, with all respect to that gentleman, but that he would much more beneficially have employed those talents than by the course he has thought proper to pursue. If the evils of this system, as disclosed in the report and testimony, be not sufficient to induce us to direct a scire facias, in the name of Heaven, I demand to know what would be considered a sufficient inducement?

Mr. L. said he was too much fatigued to discuss the resolutions proposed by the chairman of the select committee. He was, however, glad that he had withdrawn the most objectionable. Of those which remained, some might do a little good, and some a little harm; some appeared to him to be absolutely nugatory, and nearly all of them unimportant. He could not understand Sir, in many of the views which the gentlehow the maintenance of a great institution, pow-man has taken, I concur with him entirely. That erful as all men allowed it to be, for good or mis- the bank has acted correctly, in some instances, chief, should be made to depend upon such con- no one can doubt. That the effects of some of ditions. its measures have been beneficial, I am willing to Mr. TYLER said, that he was aware of the em-admit. It has facilitated the operations of the barrassments under which he rose to address the Committee. The late hour of the day would be enough, in itself, to advise him of its exhausted patience. But a regard to the economy of time, a recollection that but few days remained for legislation, induced him to proceed. From the moment that the Speaker thought proper to confer on me the honor of an appointment on the committee whose report is now under consideration, up to this time, I have felt the responsibility of my situation. It is known to you, Mr. Chairman, that I represent a district deeply interested in the decision of the questions now depending. It is known to this Committee, that it became my duty to present a petition, signed by many of my most respectable constituents, the other day, to the House, adverse to the course which I shall pursue. I can, however, sir, neither look to the right nor the left-my own personal popularity can have no influence over me, when the dictates of my best judgment, and the obli

Treasury; it may have gone far to introduce an uniform currency among us. I am not disposed to canvass these propositious. But, sir, the gentleman has alluded to some expressions, in the report of the committee, which, I think, are susceptible of defence. I allude to the remarks he has made on the subject of the establishment of an agency in England to pay over the dividends to foreign stockholders. The report barely glances at the propriety or impropriety of the bank undertaking to deal in bills of exchange. It was a question which the committee did not feel a disposition to decide. But the establishment of an agency in England was esteemed as reprehensible because of its being viewed as a part of the system which was adopted to inflate the price of stock. The theatre was enlarged, and the demand increased. I cannot conceive how the domestic stockholder was to be benefited by the adoption of the measure. It certainly did not add one cent to the profits of the bank. It

H. OF R.

Bank of the United States.

did not inspire it with increased ability to enlarge its discounts, and I, like the committee, feel that it can only have been intended for the purposes I have before stated.


ken according to the first fundamental article in the charter-that the $7,000,000 in specie required has all been paid in-yet, I demand to know, if the great objects of the institution have not been defeated? You create a thing for good, and not for evil. Yet the good, in a great mea sure, vanishes, and evil alone exists. You incor

Another expression has also been excepted to by the gentleman from South Carolina, viz: "that the loans actually made were most of them ' unreasonable and excessive in their amount;porate a company for the purpose of advancing they were not made to the merchant and trader, but to a few persons, consisting of directors, 'brokers, and speculators." Loans, on a pledge of stock, were certainly made indiscriminately to all who applied, but that most of the large and excessive loans were made to the persons described, from my recollection of facts, admits of no doubt. True, sir, of the names of fourteen persons, which were selected, not from any information previously in the possession of the committee, but merely in consequence of the amount of the loans, we were informed that seven were merchants, five brokers, and two not falling under either description of character. Yet I wish to inquire of the gentleman, if the seven merchants were not actually dealers in stock; and whether the loans thus made were not owing to the fact, of the discounter having received a transfer of the stock, under the resolution of the board of directors, authorizing such transfer? I do not, therefore, esteem the expression in the report liable to the exception which has been taken to it. I repeat, the most of those who obtained large loans, on a pledge of stock, were actually speculators and brokers.

Having now, Mr. Chairman, disposed of the exceptions taken by the honorable member to some of the expressions of the report, I proceed to an investigation of the subject more immediately under consideration. The question whether it be proper to direct a scire facias against the bank divides itself into two heads of inquiry. First, whether the charter has been so violated as to inure a forfeiture? And if so, is it expedient to exact the forfeiture? The decision of the first would preclude me from an inquiry into the second. For, sir, inasmuch as I believe the creation of this corporation to be unconstitutional, I cannot, without a violation of my oath, hesitate to repair the breach thus made in the Constitution, when an opportunity presents itself of doing so, without violating the public faith. But, believing also, that it is expedient to put it down, and other gentlemen feeling themselves at liberty to follow up that inquiry, I propose to express to you my views on that subject.

I contend, then, Mr. Chairman, that this charter has been violated, and that, if subjected to investigation before a court of justice, it will be declared null and void. I would only have you look to the long catalogue of crime detailed in the report to those practices calculated only to pamper a few, at the expense of the many-to the corruption which, by its illicit gaius, almost laughs at your power. Shall we be told, with these facts staring us in the face, that this charter has not been violated? Say that no particular clause has been violated-that the votes were ta

the interests of all concerned, and the machine thus created is managed, exclusively, for the aggrandizement of a few, and not for the good of all. Is not this, to adopt the rule laid down by the committee, so to misuse the powers granted, as to defeat the objects of the charter? The most reprehensible proceeding takes place-almost every object expressed in the charter is disappointed, and can it still be insisted that the corporation has not forfeited its franchises? It is a broad and great principle for which I contend. It is for the doctrine of responsibility due from the creature to the creator-the principle on which our Government is founded. The President is invested with certain powers; yet, if he abuses or misuses those powers, he forfeits his seat-the object of his election is disappointed-so, in regard to every other officer of the Government. Shall a corporation alone be irresponsible? There is nothing in reason or in law, to justify the idea. But, Mr. Chairman, if the position I have assumed, that a misuse of a franchise is a forfeiture thereof, is not sufficiently supported by reference to the principles of our Government, whither shall we look for still further argument?

The common law has been pronounced inoperative, in the courts of the Union, by many honorable gentlemen. But, sir, without stopping to inquire into the correctness of that position, I am willing to yield to those who hold a different doctrine all the benefits of the rules flowing from that source; and, under the principles of that law, I shall be able to demonstrate the correctness of the proposition for which I am contending. Nothing was more easily effected than the forfeiture of a franchise at common law. The statute of 18 Edward II. was an act to restore franchises to those who had lost them. Sandwich lost its privileges, immunities, and franchises, for a very slight cause. It had entered into a covenant with the abbot of St. Austin, in Canterbury, to deliver annually to the abbot a certain quantity of wine. It did not complete its engagement, but remained indebted on account thereof some twenty or thirty marks. For this sum, a suit was instituted, judgment obtained, and an execution issued, and levied on the property of the corporation; and because some of the inhabitants made a rescue of the property, it was judged by the court, and afterwards sanctioned by Parliament, that the town had forfeited its charter.

My honorable friend from Virginia, (Mr. JOHNSON) referred you also to the case of the King vs. the city of London. I will refer gentlemen to the reasoning adopted by the Attorney General in that case, to corroborate and strengthen my position. These two cities, the one for the commission of a trespass, and the other for having


Bank of the United States.

H. OF R.

from South Carolina has contended, that this violation was the consequence of the acts of particular individuals, and not of the corporate body, and that therefore no forfeiture ensues. How many persons were concerned in the violation of this article, is at least problematical. Let it be recollected that Mr. Leiper states, in his deposition, and he was not only a director, but a judge of the election, that he divided his shares, and that it was generally done for the purpose of effecting the election. But, in addition to this, it never was discountenanced by the directors. They suffered the violation to take place under their very noses; many of them were individually concerned in it, and not a syllable of reprehension is uttered. But the position of the gentleman from South Carolina, is not based on legal principles. What is the definition of a corporation aggregate? A corporation aggregate is described to be "an artificial body, composed of divers constituent members, ad instar corporis humani; the ligaments of which artificial body are the franchises and liberties thereof, which bind and unite all its members together, and in which the whole frame and essence of the corporation consist." It is compared to a national body. Sir, if any one member of my body offend, the whole body bears the punishment. If my finger violates the law, my body pays the penalty. If my hand executes murder, that hand is not lopped off, but the ligaments and arteries of my system are cut asunder. With equal propriety might the natural body complain that it was made to suffer for the misdeeds of its members, as that a corporation aggregate should complain that it was made to bear the same relation to its members. If this were not the correct rule, I demand to know in what manner you would reach the guilty person?

exceeded its powers in imposing a market toll, were declared to have lost the privileges and immunities secured to them by successive acts of Parliament, and by magna charta itself. Compare those cases with the present case. What is this case? Sir, I forbear to represent it. I will only refer you to the mass of testimony, all which goes to show that the charter has been most shamefully perverted to the purposes of stockjobbing and speculation. I do not mean to insist that these cases are obligatory on us-far from it. I am, on the contrary, disposed to think, that it would comport better with our permanent good, if our courts would carve out for themselves a course of decision in consonance with the principles of our Government. But, if we are to refer to arguments arising under common law, I repeat again, that the argument delivered by the Attorney General, in the case of the King vs. the city of London, is well deserving of attention. That case has always been quoted as an evidence of acquiescence on the part of the English judiciary, to the arbitrary will of the monarch. But the reasoning in the case is not affected by that accusation against the court. But, in truth, we require no foreign precedents to govern us in deciding on this question of forfeiture. The charter contains a provision which will silence further inquiry. It expressly declares that, if a scire facias be directed, and the court believe that any violation of the charter has taken place, it shall pronounce it forfeited and null. Before we direet a scire facias, we have to satisfy ourselves of the same fact, and the question recurs, has any such violation taken place? That it has I have no doubt. Your great object in creating this corporation, was to reclaim the country from a flood of paper, irredeemable in specie. You wished a bank with a sufficient specie basis to cause its But, Mr. Chairman, the effect of this violation notes to pass currently for gold and silver. As does not stop here; if it did, it might be overa great means for accomplishing this object, cer- looked. I consider it the root and foundation of tain fundamental articles were laid down. The every evil. Shall I be considered as expressing first article limited the number of votes to be myself too harshly when I say to you, that I asgiven by each stockholder. It was intended to cribe the non-payment of the second instalment, deny to the large stockholders the power of de- to this very violation. I am not conscious of befeating your intentions; and yet what it done? ing wanting in charity; I am not aware of havEvasion is resorted to, and in the outset the stip-ing too much gall or bitterness in my nature, ulations of the contract were violated, and instead of giving but thirty votes, one individual gives eleven hundred, on eleven hundred shares. The stockholder has accepted a covenant on certain positive conditions; he has agreed to carry it into execution in good faith, and yet, the moment after, he violates a fundamental article. He has also expressly agreed that it shall be fulfilled or forfeited; and still, when the fact of nonfulfilment is fully established, it is contended that no forfeiture ensues. I should rely strongly on the ground, that a violation of a fundamental article produced a forfeiture. That which is fundamental cannot be altered-cannot be changed. Can you remove the pillars of this charter, and yet expect it to stand? Can you remove the foundation, and yet expect the fabric to remain ? It is only necessary to state the proposition, in order to receive the answer. The gentleman 15th CoN. 2d SESS.-42

nay, I would sooner, if I could, frame an apology for the errors of my fellow men, than expose them naked to the sight. But, does not the fact stare us palpably in the face, that the resolution of December, 1816, authorizing discounts to enable stockholders to pay up the second instalment, was intended, and actually applied, to the benefit of the stockholders residing in the vicinity of Philadelphia and Baltimore, whose influence had become overwhelming, in consequence of the violation of which I complain? The man who resided at a distance derived no benefit, no facility, under the resolution. He had not been among the knowing ones; he had not heard a whisper that such a resolution would be adopted, before its actual promulgation; he had prepared the specie and stock to meet his engagements, and did meet them. Was not this measure then not only calculated to defeat the payment of specie, but to

« AnteriorContinuar »