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greater propriety) that the repealing law was un-ing, but, if the question were doubtful, it would constitutional and void, and that the charter was be inconsistent with the duty we owe to that good. If we proceed upon the ground of a breach part of the community whose interests are involv. of the condition, the effect of our law, even in the ed in the institution to direct a scire facias. The contemplation of its advocates, would depend inception of such a proceeding would be very upon the fact; and, in both instances, the Judici- apt to be fatal to the bank. It is an institution ary would have to decide the controversy. For subsisting upon a sound credit, and the confidence even in England, where the power of dissolving the community entertain in its existence and an incorporation is in Parliament, the act passed permanence. If these are once shaken, there is for that purpose is always enforced in the Court an end of its utility-of its entire capacity. Imof King's Bench; and, until the court pronounces putations of impurity are not more fatal to the the judgment, the corporation continues the ex- fair and just superiority and loveliness of the ercise of its franchises. In this instance gentle-female character, than would be those of instamen may be assured that the stockholders of the bility and weakness against the credit and confiBank of the United States would not voluntarily dence of this institution. They would leave it acquiesce in the law. We should be compelled exposed to the assaults of every petty hostility. to resort to the Judiciary for some process to A scire facias would be invested with the exenforce it, (if indeed gentlemen would be able to pression of the deliberate opinion that Congress devise any, in the absence of all common law, an opinion always entitled to great weight with and under a void charter,) and at last a hearing the American people-that a forfeiture had been would take place, and the Judiciary would decide incurred, and public calculations would be made between us. accordingly. A loss of public confidence would ensue; a general pressure by its creditors from all quarters; a depreciation of its paper; the withdrawal of private deposites, and, of necessity, those of the public;-would be the inevitable consequences. And when it is considered that this state of things would continue, and gradu ally become worse, during the time that would necessarily elapse before the question could be decided, it appears to me impossible that the bank could survive the shock, although the charter should be ultimately sustained.

But, Mr. Chairman, said Mr. McL., it clearly results, from all that has been said, that, after granting this charter, under which there now exist vested rights, we are bound by our own act, unless a forfeiture has been incurred. In such an event the Government, as a party to the contract, have stipulated the remedy, and the mode in which the question is to be tried, and the forfeiture enforced. We have stipulated that if, after a committee of either House of Congress shall have reported that the charter has been violated, we deem it expedient to vacate the charter, we will direct a scire facias to issue; and we have secured to the corporation the right of trial by jury, and the judgment of the court, before their rights can be affected. This is a solemn stipulation, made for the mutual benefit of both parties; we cannot depart from it, without an utter disregard of the national faith.

Before we resort to this remedy, Mr. Chairman, we should be satisfied, in the first place, that the charter has been forfeited; and, secondly, that it is expedient to enforce a forfeiture. For, although the act vests you with the power to direct a scire facias after your committee have reported a violation, it does not make it obligatory upon you to do so, even should you concur in opinion with the committee. It leaves you with the important option and privilege, possessed by every individual, of taking advantage of a breach of contract by the opposite party, or of waiving it, at your pleasure; with this material difference, that in the case of the individual, he considers only his personal feelings and interest; in the instance of the Government, it is to consult, not its feelings, but the interests and welfare of the whole nation. In the exercise of this privilege, therefore, national safety and individual happiness, private rights, as well as public policy and public good, are all-important considerations. There is also every reason why it should be clear that the violations reported would be sufficient to inure a forfeiture; not only because such could be the only legitimate objects of the proceed

Is it clear, then, said Mr. McL., that the acts of violation reported by the committee will enure a forfeiture? He believed not; he was persuaded that the courts of the United States would not decree a forfeiture on the ground of any or all of these acts. He would not deny, that, in these cases, some of the provisions of the charter had not been literally complied with; though in none of them had the spirit or intention been evaded, or the great and leading ends and objects of the institution been defeated. He observed, that the doctrine of a forfeiture of charter, and especially in regard to the acts which would or would not produce it, was a novel one in this country, and obscured in some difficulty. The annals of our own history afford us no precedents, there never having been, to his knowledge, an attempt to forfeit a charter in the United States. The cases which have occurred in England, whence we so often draw our legal authorities, are extremely vague and unsatisfactory. They were proceedings in times of great trouble and confusion, when the law was unsettled or little understood, and when the justice of the case, or the rights of the parties, were as little regarded. In most instances they originated in the ambition of the Crown, or in its hostility to the particular corporation whose dissolution was desired; and were mostly made by judges either corrupted or overawed by the power and influence of the Crown. The principles upon which a charter would be decreed forfeited on one day, in a short time afterwards would be reprobated by Parliament, and

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of mis-user or of non-user, less than such as he here referred to, were to be corrected by the visitatorial power, where it exists, or by milder means than the destruction of the being of the incorporation. If a corporation neglect or refuse to appoint officers, through whom only it can act, and where no provision is made for such an event, it might thus be rendered incapable of performing its functions, though in England this is now declared to be no cause of forfeiture; but, if after it elects its officers they misbehave, though in a degree not subversive of the great ends of the incorporation, their misconduct may be corrected, but there can be no forfeiture, for this reason, of the charter. As in the natural, so in the legal or artificial person, the entire annihilation of its be ing is considered a desperate remedy, never to be resorted to until all efforts to reform, by milder means, have proved abortive. The corporation must be wholly unable, either by utter incapacity, or by a total subversion of all its faculties, from complying with the condition of its existence, or from performing its functions in the community; and the objects of its institution must be altogether unattainable, before its complete dissolution can be decreed. The acts of mis-user should lead to the same result, and be productive of the same incapacity, as those of non-user, in order to furnish a ground of forfeiture, and before its being can be destroyed.

the franchise restored, as the political temper of of mis-user or non-user; he contended that they the times happened to predominate. They do must be corporate acts, and amount to a breach not, therefore, partake of the stability of other de- of the condition upon which the corporation was cisions; and, valuing as we do the freedom of our created, by rendering the corporation incapable institutions, and the certainty of our laws, are of acting in its corporate capacity, and of perentitled to no credit in our country. The honor-forming the objects of its incorporation. All acts able gentleman from Virginia (Mr. TYLER) has referred us to the famous case of the city of London, in the reign of Charles II, as the source whence he draws his learning and his principles upon this subject. But his friend must have forgotten the character of that case, and the circumstances under which the decision was made. It is a case from which little purity of doctrine can be extracted. It occurred in the time of a prince of a very unsettled character, and of a lawless ambition; of whom it has been observed, "that he never said a foolish thing, or did a wise one;" and in the path of whose tyranny and ambition the laws interposed no barrier. The proceedings against the city of London were the result of the political ambition of the Crown; and "the head and front of the offending" was, a libel on the King. In that case, too, even in England, it was then made a question whether a charter could be forfeited, no decision having previously been made, and though it was decided affirmatively, and the forfeiture actually decreed, yet, afterwards, when the feeling in which the persecution originated had subsided, Parliament restored the charter, because it had been unjustly forfeited. The historians of those events, associating the judges of that day with this transaction, and who, holding their commissions at the pleasure of the Crown, were generally the instruments of its | tyranny, stamp them with a corrupt devotion to the views of the Court, regardless alike of the Mr. McL. said there was a wide distinction rights of property, and of human life. If, how-between the condition of the charter and the ever, this case of the city of London could be re- numerous provisions generally contained in it, ferred to, it would prove nothing for the argu- designed to enable the corporation the better to ment; since it is uncertain whether the being of comply with the condition. These latter are the corporation ever was absolutely forfeited. On often made for the benefit of the corporators, and the contrary, it may be inferred, from the records to furnish them with the means of their own of those proceedings, that it still subsisted, and government; and though it would always be that the seizure was a seizure only of the May- proper to conform to them, yet for a departure oralty, notwithstanding which the citizens ex- from some of them, if in doing so the great ends ercised all their corporate rights, except that of of the institution are not defeated, and its capacity choosing their own Mayor. It may be observed to comply with its condition not impaired, there also, that in this, as in all the other cases in Eng- cannot, in the nature of the case, be a forfeiture. land, that they were generally cases of incorpo-They are to be corrected by the visitatorial power. rated towns; and the acts complained of as working a forfeiture, were acts of oppression upon third persons, not members of the corporation, and in violation of the positive laws of the land: rather the assumption of new powers, than the irregular exercise of powers clearly granted by their charters.

Under all these circumstances, Mr. McLANE said, the only safety and sound principles were to be drawn from the charter of our own institutions, from the nature of the grant, from the nature of these artificial persons as created by the acts of Congress, and the great ends which the aggregate of their component parts was designed to accomplish. Admitting, therefore, said he, that the charter of a corporation may be forfeited, by acts

The very existence of a visitatorial power evinces the truth of this doctrine. There would be no occasion for this power if every violation of any provision in a charter inured a forfeiture of its being. If such a violation would inure a forfeiture there would be no safety or stability in any corporation. Different men may take different views of the same provision. There may be many acts of the officers of the institution of which the corporators could have no knowledge, and equally opposed to their interests and those of the public. They may refuse to a man an office to which he is entitled by the provisions of the charter. He may apply to be restored, but it would be a singular remedy to annihilate the charter, and, with it, the office. The directors

may lend money to a man professedly insolvent. and should be liable for the debt, and corrected for the misconduct; but it would be a fatal specific to destroy the whole being of the corporation, and involve the stockholders in greater ruin for this irregularity. In all such cases, the visitatorial power in England, by means of a mandamus from the Court of King's Bench, applies the remedy; and where this remedy is effectual the work of destruction is never resorted to.

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States, under the arrangement, from the moment of the purchase; and, by a transfer to the Government completed the transaction. It was a losing bargain for the bank, and the Government was censurable on this account. But, Mr. McL. inquired with what face he could now insist upon a forfeiture for this act, committed for the interest of the Government, and forced upon the corporation by Government? He could not suppose it necessary to expend more time upon this part of the subject.

The second act of violation was that of discounting for the coin part of the second and third instalments. Mr. McL. said he would not consume the time of the Committee in an inquiry into the policy or impropriety of the measure. He would content himself with remarking that, in his opinion, it was unnecessary. He believed it would have been better for the institution if it had gone into operation upon the amount of the subscriptions. Its progress, perhaps, would have been slower, but, he believed, surer, in the end; and it would have prevented those speculations in the stock of which so much complaint had been made. Those who had the management of the institution, however, and who understood all its springs, thought differently, and their opinion was certainly entitled to some weight; and whether it were wise or unwise, if they possessed the right to do so, and if in doing so they did not defeat the great ends of the institution, and break the condition of the charter, it is no forfeiture.

The act of violation, said Mr. McL., must not only amount to a breach of the condition, but it must be the act of the corporation; and, if practised by the officers, must be an official corporate act. Innocent stockholders should not be answerable for the misconduct of their officers, unless within the limit of their authority. If an individual director improperly avails himself of his public condition to promote his private speculations, it is not such an act of official abuse for which the corporators would be liable, or for which the charter would be forfeited; and therefore, all the improper conduct of some of the individuals who have been directors in this institution, and which has fallen under the severe animadversion of the honorable gentleman from Virginia, (Mr. TYLER.) are not such acts as would work a forfeiture. They are acts which I do not mean to justify or excuse-which I will unite with the other members of the committee in visiting with the severest reprehension. But they are the acts of these individuals alone, in which the rest of the committee had no share-of which Gentlemen are in an error in supposing that they had no knowledge until the committee ex- this provision was the great condition of the posed them, and for which, they are, therefore, charter; it is only a provision, and an important in no degree culpable. Punish the individuals one truly, to promote the performance of the conconcerned in them, if you please, but do not in-dition. The subscribers to the bank are incorvolve in indiscriminate destruction the innocent porated, and invested with the right to carry on and the guilty. the operations of banking; to lend money and issue notes; and the fundamental condition of this grant is, that they shall at all times pay specie for the notes thus issued, upon demand; that they shall pay a certain sum to the Government, and make loans to a certain amount, and furnish other facilities enumerated in the charter, and not violate any of the laws of the country. The motives of policy which recommended the charter, form no part of the condition. The particular provision alluded to, therefore, was not designed so much to constitute a condition of the charter, as to create an obligation in the stockholders to pay up the amount of their subscriptions, and to designate the time at which the corporation would have the right to make the demand. This is evident from the penalty being imposed on the delinquent stockholder for nonpayment. There is no penalty imposed upon the corporation for not enforcing payment in case of delinquencies. If any individual stockholder had neglected or refused to pay his instalment at the time it became due, it will scarcely be contended that he would have forfeited his corporate rights, and have been liable to be removed, as a corporator. The corporation might have brought suit, and withheld the dividends until payment was made; but the individual would still have con

Mr. McL. said, if these principles were correct, a more particular examination of the acts of violation reported by the committee would show that no forfeiture had been incurred. The first act of violation was the purchase of two millions of the public debt for the Government of the United States. Mr. McL. had never believed that this act afforded the slightest ground for a forfeiture, if it could be supposed any violation at all. The provision in the charter could have designed nothing more than to prevent the bank from purchasing stock with a view to become the owner of it. It was intended, as had already been remarked by the gentleman from South Carolina, to prevent the bank from going into market in competition with the Government. In purchasing this stock they did not mean to hold it; they bought for the Government of the United States, under an arrangement made with the Secretary of the Treasury. The Secretary of the Treasury insisted upon the right to redeem this amount of stock, which the bank legally sold. Mr. McL. believed the Secretary was wrong; but, be this as it may, the bank, to avoid difficulty, purchased so much stock for the use of the Government. They were, at no period, the absolute owners of the stock. They were the trustees of the United

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6

tinued a member of the corporation. If, then, legal right-the right of lending money, and disthe neglecting to pay by the stockholder would counting in the regular course of banking operanot have forfeited his membership under this tions-no other effect is produced by the discounts charter, the neglect on the part of a majority under the resolution. If it were not illegal to would not have had a greater effect; much less discount to a stockholder, and suffer the applicawould the forbearance, on the part of the direction of the proceeds to be made in payment of tors, to sue in case of a delinquency, or even their the instalment, which could not have been preaiding the payment, work a forfeiture of the char- vented without a resolution, he was at a loss to ter, and dissolve the being of the corporation. It conceive how a resolution to discount could creis by such a course of reasoning that the right of ate the illegality. One distinction is, that, inforfeiture is inferred: for it was said, in the case stead of resolving to discount at the time the of the prosecution against the city of London, paper is offered, the resolution is made before any before adverted to, "that, as every member may application for discount is preferred, and the ob'forfeit that which any member may, the same ject honestly avowed. Another distinction is, ' acts which will forfeit the right of every mem- that the discounter, instead of drawing the speber, separately considered, if done jointly by all cie, merely for form sake, leaves it in the bank the members, will have the same effect, or, in to his credit; in effect, he has deposited so much other words, will be a forfeiture of the existence specie, and his bank book is the certificate of the of the whole corporation." fact; but these are rather distinctions without a If, then, this charter did not mean to forfeit the difference. The honorable gentleman from Virright of any one member, for the non-payment of ginia (Mr. TYLER) has admitted the correctness his instalment, as I contend it did not, neither of this operation, in regard to the third instaldid it design to forfeit the existence of the whole ment; and I cannot perceive any discrimination, corporation, if all the members neglected. But, in point of principle, between the third and the sir, said Mr. McL., the bank was authorized to second. Mr. McL. said, it should here be rego into operation after the subscriptions should membered that this exercise of the legal right be completed, and before the second instalment did not, in any degree, incapacitate the bank became due; and the second instalment could from performing all the great objects of its innot, therefore, have been considered as necessary corporation, whether as matters of condition or to its operations. In giving this authority, the policy. It has at all times performed them in charter must have authorized all its consequences. good faith; it is yet daily performing them. It The bank did go into operation in the manner has, in no instance, ever refused to pay its notes and at the time prescribed by the charter. Being in specie, on demand; it has essentially contriblegally in operation, it had the legal right to dis-uted to the wants and enterprise of the commucount and lend money to whomsoever it pleased, nity; it was enabled sooner to extend its opera and to any amount, taking the risk of the penal- tions, and diffuse its influence more widely, and ties imposed by the charter. If the directors ex- to act with greater promptitude and more effiercised this right indiscreetly, they violated their ciently; it enabled the State banks to resume trust to the stockholders, but the incorporation specie payments earlier than they otherwise incurred no forfeiture. Suppose, sir, that, with- would have done; it has never failed in any of out passing any of the resolutions referred to in its stipulations with the Government; but, on the report, they had gone on to discount, no one the contrary, has always furnished it with great would censure them for discounting to stockhold- and continued facilities. It was not certain, nor ers, on a pledge of stock. For my own part, I am even probable, at the price specie then bore, that free to declare, that I think loans on stock, if not the withholding of the dividends from the delindisproportionate in relation to the wants and quents would have compelled the prompt paybusiness of the rest of the community, are the ment of the second instalment, and the right of safest and best; nor would they have deserved suing afforded no greater means for this purpose. censure if they had given a preference to the By the mode adopted, the operations of the bank stockholders, which, in fact, would be the neces- were considerably quickened, the interest of the sary consequence of giving preference to stock stockholders advanced, the public good promoted, loans, as the discounting to stockholders was the and the means acquired of certainly compelling necessary effect of lending on stock security at payment in the space of sixty days, by a mere all; neither could it have been incumbent upon sale of the stock. In point of fact, the arrangethe directors, or proper for them, to inquire into ment was executed in good faith; and the investhe application of the proceeds of the discounts. tigation I have made, authorizes me to say that, If, then, they had discounted to stockholders, with very few exceptions, and these to a small which would have been both legal and proper, amount, payment was punctually made as the the persons obtaining the loans would have drawn notes became due. My honorable friend from out the notes of the bank; with these notes they Virginia (Mr. TYLER) has insisted that the bank would also have drawn the specie, and then re- was bound to bring suit, and ought to have done turned it back in payment of the instalments. so. But, sir, I deny that there was any such Such an operation would have been payment; obligation; it would have been strange, indeed, by such an operation the individual stockholder if there had been, since the right to sue, and the would have complied with his engagement, aided, propriety of exercising such right, involves conit is true, by the bank; but, in the exercise of a siderations of great moment, which could not

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the charter, and the exceptions which have been pointed out, were rather in obedience to the sound spirit and intention of the provision, than a departure from the words. There were but four instances in which the rate was not strictly ad

have been foreseen, and generally depend upon the state of things existing at the time the right accrues. If the penalty prescribed by the charter failed in its effects, there was no obligation to go farther; it became a matter of sound discretion with the directors, to adopt the course most con-hered to, and enforced: the shares of all the four sistent with the character of the bank and the amounted to three hundred and sixty-five; one state of the community; and if it appeared prob- was the case of a widow, holding but a few shares, able that the penalty would be ineffectual, it was and the others had been prevented from making the part of a wise and prudent foresight to anti-punctual payment to some accidental circumcipate and provide against the evils which might stances, entitling them to a relaxation of the rule. ensue. Suppose the bank, however, to have sued, The object of this provision in the charter, was and to have refused to discount to a stockholder, clearly to compel the payment of the instalments, merely because he was such, (which is indeed a and, like all other human laws, designed to impresumption at variance with the best notions on pose the penalty upon a wilful or corrupt negli the subject,) would a different effect have been gence; so far as this was its object, it was exeproduced, or would the condition of the bank cuted strictly, and in good faith but it could have been improved by the proceeding? The never have been intended to punish a failure upon suits must have been commenced in various parts the part of the unwary, or which was occasioned of the United States, wherever the delinquent by accidents, over which the ordinary human stockholder happened to reside; in some a longer, exertion had no control; for such instances, in in others perhaps a shorter time, but in none less the very nature of the case, a discretion must than eighteen months would have been required have been vested in the great body of the stockto obtain judgment. The diversity of tribunals holders. The provision was introduced, also, for to which the bank would thus have been com- the benefit of the punctual stockholders, and if pelled to resort, would have increased the delay they think proper to waive its benefit, and relax and expense, and multiplied difficulties without the rigor of the words in the case in which there number; and, after all, there could have been no existed no design to evade its provision, it cannot security in the uncertain and embarrassed state be a ground of complaint with any one else. They of things at that time, that, at the end of the race, have waived it by their own act, and they do not the stockholder would have been solvent. In the desire any proceeding on this account. If, indeed, meantime, it would have been the duty of the in point of strict law, this act could be considered bank, with a faithful regard to the interests of the as a violation of the provision, it could scarcely punctual stockholders, and the Government, and be deemed of sufficient magnitude to justify the to the welfare of the community, to have made widespread ruin which would ensue a forfeiture discounts and carried on its operations: by this of the whole incorporation. The interest having means its notes must have gone into circulation, been charged upon the shares until the payment and judgment being obtained in the cases in of the instalments, the difference would be of which suits may be supposed to have been brought, little or no importance. It fully evinces that the defendants would either have gone into court there could have been no evil design to violate with the notes of the bank, and paid the judg- the charter; and surely gentlemen will not conment, or first drawn the specie, and then paid it, tend that it in any degree embarrassed the opera in discharge of the suit. The moment the bank tions of the bank in the attainment of the great went legally into operation, this result was inev- and fundamental ends of the institution. itable; and I cannot perceive how the mode of exercising a legal right can be construed to work" a forfeiture of the incorporation.

The third act of violation consists in paying dividends to stockholders who had not completed their instalments. The facts upon this point being correctly ascertained, there will be no occasion for little, if any argument in regard to it. It is in proof that, according to the regular course of business, "when a stockholder came to pay his 'instalment after the regular period, but before any dividend was declared, interest, at the rate of six per cent. per annum, was paid by him, on 'the amount of his second instalment from the * 1st January, 1817, to the time of his paying up. If he came to pay his second instalment after 'the dividend was declared, viz., 7th July, 1817, the first dividend was considered as forfeited, ' and interest on his instalments was paid from the 1st July, 1817, to the time of his paying up." The general rule of business on this point, was, therefore, in strict conformity with the words of

The fourth act of violation is said to consist in the judges of the first and second elections allowing many persons to give more than thirty votes each, under the pretence of their being attorneys for others, in whose names the shares then stood."

Mr. McL. said he concurred with the unanimous sentiment of the committee in disapproving this act. It could not be disguised, that its effect was to enable the large speculator in stock to control the influence in the management and direction of the bauk, to the exclusion of the small and bona fide stockholder. Yet he could not imagine that it would be deemed, under all the circumstances, a ground of forfeiture. He also begged leave here to remark, that the custom of subscribing for stock in the name of another, and voting as the attorney for that other, had been practised at all times and at all places, in this country, since the first organization of similar institutions, and that what had been universal custom and immemorial usage might almost be