value of such a possession, to a new institution, which the report supposes ought to have "proceeded gradually, growing with the growth, and strengthening with the strength of the nation," (page 7) it requires no great financial skill to estimate. It was a sure resource for obtaining the means of extending their business, when that should become expedient, and in the mean time was productive. It was redeemed at par, when the market price was considerably higher. But, passing by this loss on the redemption, the mere circumstance of withdrawing at once thirteen millions of stock, and throwing suddenly upon the bank thirteen millions of money, for which they were to find immediate employment, must have materially, and most injuriously, interfered with their arrangements. There can be no doubt that it led directly to some of those measures (the extension of loans on stock, for instance) which the report most strongly disapproves. But, be that as it may, none can question the advantage of it to the Government. By the redemption of the public debt, and payments of the Government, the public deposites in October, 1817, were reduced to $7,743,899 74. In October last (1818) the Government redeemed a moiety of the Louisiana debt, exceeding five millions of dollars, and this, too, was done through the agency of the bank. Looking back to the period when the bank was established, considering the state of things at the moment when it came into existence, considering how short a time it had been in operation, and the difficulties it had to surmount, the effect is wonderful, and, to all unprejudiced minds, would seem to indicate a steady and faithful attention to all its public duties. Sir, that institution has been a servant, I had almost said a slave, to the public; a faithful servant, always forward, even at some expense to itself, and zealous to promote the public interests, in all their various and complicated relations. This is the spirit in which its affairs have been administered. It still continues to perform all its public duties, without affording just cause, in this respect, either of complaint or of reproach. I might add to this list of benefits, received by the Government and nation, the decided improvement that rapidly followed in the public credit of the country, both at home and abroad. If gentlemen doubt, let them consult the price current of stock here and in England. The only allegation, indeed, of anything even approaching to a default in the public duty of the bank, is that contained in page ten of the report, where it is stated "that the amount done under that resolution (to discount notes for those who had revenue bonds to pay) was small," &c. This is certainly a mistake, as has been already shown from the letter of the Secretary of the Treasury, from the evidence of Major Butler, and from the fact that there has been no complaint. Such has been the inclination to censure, that you may rely upon it no well founded cause for it would have been suffered to escape. It is a mistake that arose from the circumstance, acknowledged by a member of the committee, (Mr. Mc H. of R. LANE,) that the inquiry was ex parte. If they had asked for information, they would have learned, that at every discount day the directors had before them a list of the bonds that were coming due, and that they uniformly gave a prefference to those who were to pay them, as far as they could do so consistently with the interests of the bank, of which I beg leave still to say they were the exclusive judges. The next object of inquiry is, how the management of the bank has been conducted in regard to the interests of the stockholders. This is altogether independent of the question of violation of charter, which shall be considered separately hereafter. para In the progress of an institution like the bank, founded and established with a view to certain great public objects, perplexing questions might, and would, occasionally present themselves.The interests of the public might, in some instances, be at variance with those of the stockholders. Which were to yield? If, upon every such occasion, the directors had allowed mount influence to the interests of the stockholders, and had sacrificed the public objects to the profits of the institution, the public would then have had some right to complain. But, if every public duty has been faithfully and fully performed, even beyond any reasonable expectation that could have been entertained, it is certainly a very singular inquiry to be made by Congress, whether the utmost has been done for the interest and profit of the stockholders. That is an investigation that belongs to the stockholders themselves, which they are competent to conduct, with the means in their hands of correcting errors, and removing grievances, by changing their officers. And what is to be the consequence if Congress should be of opinion that the institution has not been well managed for the interests of the stockholders? To alter the charter-to take away the charter-or subject it to the wasting and destructive process of a protracted judicial examination by scire facias? Have the stockholders made any complaint? Have they asked from us any relief? Not at all; on the contrary they implore us to abstain. You have upon your table a memorial to that effect from Boston, a memorial from New York, and an exceedingly well-reasoned memorial from Richmond, which deserves the attentive perusal of every member of the House. If their interests have been injuriously affected, they have, on that account, a stronger claim upon us. After we had gained so many objects of great national importance at their expense, would it not be iniquitous, yes sir, a national iniquity, now to deprive them, by a wanton exercise of unjust power, of all the hopes of an equivalent, founded upon the public faith, pledged to induce them to embark their property in this concern? Can you restore them to the state in which you found them? Will you return that part of the bonus which has by this time become due, and I presume been paid?— Will you restore to them their stock and coin? Will you, finally, indemnify the subscribers, and the purchasers, who have bought upon the assurance of the charter, for the losses they will sustain? A gentleman from Virginia, a member of the committee, (Mr. TYLER,) seems to have intended to anticipate some of those inquiries, by saying that the bank, after paying all its debts, could now return to every stockholder "dollar for dollar." A most honorable concession, undoubtedly, as it respects the management of the bank, and one that goes far to answer every complaint against it. For, if the public service has been punctually performed, and the bank (after dividing eighteen per cent. in two years and a half) could now wind up its concerns, and pay every stockholder "dollar for dollar," no man who has the slightest acquaintance with the matter can deny, that it must have been well managed. But how long would it require to gather the funds that have been scattered over the United States, so as to be able to restore them to the stockholders? Seven years have elapsed since the charter of the late bank expired; its concerns were much less extensive in amount, as well as in the space through which they were spread; it expired, too, under circumstances highly propitious for drawing in its resources; and the management of its affairs has been uncommonly able and faithful. I believe they are not yet closed. How long, then, I repeat, would it be, before this "dollar for dollar" would be restored to the stockholders? It is matter of conjecture-but still, with so much of certainty belonging to it, that no prudent man would give a stockholder anything like "dollar for dollar" for his share of the proceeds. Sir, I cannot reflect upon the mighty wreck, without astonishment at the coolness with which even the possibility of it seems to be contemplated. The organization destroyed, the fragments scattered over the whole United States, no longer obedient to any power but the power of time and chance, which, like the winds and the waves, may drive them to the shore, or may drive them where they can never be reached or collected. The first topic of complaint is the too great liberality towards the State banks. As a charge of error, it may not be wholly without foundation. But it answers, fully and authoritatively, and I hope that the sequel will show, satisfactorily, one of the heaviest charges that has commonly been made throughout the country against the bank-the charge, I mean, of having acted with oppressive rigor towards the State institutions. I am glad the committee have cleared away this ground of accusation. At most, however, it proves only a mistake; a mistake on the right side, and a mistake that was almost inevitable. To bring about the payment of specie, within any reasonable period, and at the same time to avoid a severe pressure upon the State banks, and through them upon the community, it was indispensably necessary to treat those banks with the most indulgent liberality, where ever they manifested a sincere intention to return to the payment of specie. This was the inducement to the compact of the 31st January, FEBRUARY, 1819. 1817. Without such indulgence, the paper of the United States Bank, and that of the State banks, could not have circulated together. A good and a bad currency, or, if you please, a good and a better currency, can never associate in circulation. They must associate upon terms of equality, or approaching to equality, or they cannot associate at all. The Continental money banished gold and silver. When assignats were used in France, specie disappeared. When, by excessive issues, or from whatever other cause, the State bank paper was depreciated, coin was no longer used. Where it is now, from the same cause depreciated, (as in some parts of the Western country,) gold and silver, or notes of the Bank of the United States, equivalent to gold and silver, are not to be found. They will not be found there until either the better currency shall obtain the entire ascendency, by banishing the State bank paper from circulation, or, by a removal of the causes that have occasioned depreciation, the latter shall be restored to an equality in value with the former, which is on every account most to be desired. The next subject of complaint and censure is the resolution of the 28th November, 1816, for paying the dividends of foreign stockholders in London, at the par of exchange. I shall assume, for the purpose of treating this subject, a single maxim of justice, which every man will assent to as the only fair and reasonable rule of human judgment. It is, that, where an act is right in itself, the motives or reasons are not to be inquired into as a ground of crimination. They may strip the act of its claim to merit, but they can never expose it to criminal imputation. Charity, indeed, common charity, between man and man, that which the infirmity of our nature demands to be continually exercised towards each other, adopts and applies a much more comprehensive and benevolent rule-that, even where the act is wrong, yet it may be exempt from censure, if the motives were just and good. Sir, without deciding whether that resolution was right or wrong in itself, and admitting that it was one of those "general and abstract subjects to which the resolution of the House did not direct their attention," the report condemns it as a measure adopted with a view to speculation, that is, upon what they suppose to be bad motives. It is true, they take, also, another ground, which I will examine presently, namely, the possible loss to the American stockholders and Government. But they do not deny, and I think they most clearly admit, that the directors had a right to make the arrangement. If it had been the policy of Congress to prevent foreigners from becoming stockholders in the bank, they would have expressed it by a prohibition in the charter. The matter was not overlooked; it was considered and discussed in this House, when the law was passed. If it was the policy of Congress to permit foreigners to become proprietors of the stock-and certainly the refusal to prohibit amounted to an invitationwould the directors have been justified in adopt FEBRUARY, 1819. Bank of the United States. H. OF R. ing measures to thwart and counteract that pol- would stipulate to receive the remittance of his icy? It was their duty to execute the law in its dividends. For, we must recollect that it was a spirit-to effectuate its intentions-to subserve, mutual contract, binding upon both parties. The and not defeat, the policy of the Government. bank would pay abroad upon no other terms but If, substituting their own conceptions of what those that were prescribed. It cannot be denied was politic, for the rule given to them by the that the directors had a right to arrange the terms. law, they had pursued a different system, they Dealing in exchange is one of their legitimate would have made themselves justly obnoxious powers, expressly given by the charter; and, as to censure and reproach. Now, sir, the resolu- there is nothing which restricts them to succestion in question had two objects-1. The pay- sive unconnected instances, there can be no valid ment, in London, of the dividends to foreign objection to such an exercise of the authority as stockholders-2. The payment at the par of ex- is now the subject of discussion. There can be change. The first of these the report does not no doubt, therefore, of their right to "compel the much object to. It was done by the late Bank American stockholders to contribute to the pubof the United States, as to its own dividends. lic loss" (Report, page 8,) upon exchange operaThat bank also remitted to foreigners their inter- tions; and there can be none of its expediency est upon the public debt of the United States, I and propriety, provided there was a well-grounded believe, free of charge. This is powerful evi- probability of profit instead of loss. The direcdence that it was advantageous to the institution, tors had before them the experience of the past. for now that the whole history of the bank is From two tables before me, I can say that, from before us, its life and its death, I suppose no one the year 1791 to the year 1817, inclusive, the will deny that it was very fairly and skilfully average of exchange has been greatly in favor of managed. We have the example, too, of the this country. The first of these is a statement Government, in the instances of the French and from the Treasury, of the annual gain and loss Dutch loans. Why was the interest stipulated upon remittances for payment of the Dutch loan, to be paid abroad? Because it was favorable to from 1791 to 1809. The gain is $409,197 20; the credit of the country; it enabled the Govern- the loss is $103,377 06. The clear gain upon the ment to obtain loans which it could not other- whole of the remittances, is $305,820 14. The wise have had, or to obtain them upon better other is a statement of the annual gain and loss by terms. The mere inconvenience to the stock- exchange, under the operations of the Commisholder, the freedom from charges of receipt and sioners of the Sinking Fund. There is an uninremittance, when he has his interest sent to him, terrupted annual gain, amounting, altogether, to instead of being obliged to send after it, is a con- $482,361 20, with only an apparent exception in sideration of great moment-the same considera- the years 1815 and 1816. The exception is only tion which induces an individual to invest his apparent, for it was owing, not to the state of money near to where he lives, though he might exchange, but to the depreciation of the currency take a greater profit by investing it further off. with which the bills were bought. At the very Such an operation, however, was inconvenient time, (and it is a convincing proof,) exchange to the Government, because it was not within in Boston, where a sound currency was mainthe ordinary range of fiscal management; and, tained, was at or about par. Deduct those two therefore, the Government proposed to exchange years, ($129,640 66,) there is still a total gain of the foreign debt for a debt bearing interest, pay- $352,720 54. As far as the past can afford us able to the United States. As an inducement, any light to look into the future, this exhibition they offered to increase the annual interest one- might be relied upon. It was not of a year or half of one per cent. France accepted the offer; years, but an unbroken series of six and twenty the Dutch refused it, estimating the inconve- years in succession. It was not of a period of nience of receiving their interest at home at uniform character, either favorable or unfavormore than the annual one-half of one per cent. able. It embraced the infancy of our GovernSuch an operation, though inconvenient and bur-ment, the arrangement of our finances, years of densome to the Government, is precisely adapted prosperous commerce, and years when commerce to the transactions of a bank, authorized by its was oppressed by formidable restrictions and imcharter to deal in exchange, and having estab-positions abroad, and by prohibitions and embarlished arrangements and credits for that purpose. goes at home. It embraced a long period of It can remit and pay abroad with as much facil- peace, and a short period of war, (a proportion ity as it can pay at home. To my mind, there which I hope our history may always present;) fore, it seems that the measure, so far as it re-it embraced, in short, exactly such a variety of gards the payment abroad, was not only justified circumstances as, in the ordinary course of events, by experience, by example, and by sound calcu- may be expected to happen, and, for that very lation, but that the neglect of it would have reason, exactly such a period as a prudent man betrayed ignorance and want of foresight. I would select for the basis of his calculation. might instance, also, the Louisiana debt, which Experience since, I am informed, has given was taken by a single individual, or a single its sanction to the measure. I do not know the house, and sold at a profit, by stipulating to pay fact, but I am told there has been a gain upon the interest abroad. The second part of the reso- exchange. The committee of directors, who lution regards the rate at which the bank would reported against the measure-who are compliengage to remit, and at which the stockholdermented, and deservedly, too, for their able rea H. OF R. Bank of the United States. FEBRUARY, 1819. looks only at one side of the question. We may sons were, upon general grounds, in favor of it, as the report will show; and gave "able rea-affirm, with equal truth, that, if it was disadvansons," the same which finally decided the board tageous to the American stockholder, it would to adopt it, namely, "the effect which it would depress the market here, and that the depression 'have in reducing the rate of exchange, by in- would affect the market in England. The marducing capitalists to invest their funds in the ket abroad for our stocks is regulated by our own, stock, and thereby facilitating the resumption of rather than our own by the foreign; though, 'specie payments." They were deterred by then doubtless, they do somewhat affect each other. existing circumstances, which are now proved The only question, however, at last, is the one to have been temporary; and probably, among which I have before stated, and I hope satisfacothers, by the doubt whether a sound currency torily answered: Was there a reasonable prospect could or would be very speedily restored. The of gain from this arrangement? But the gentleremittance of the dividends they recommended, man from Virginia, who was one of the select without qualification. We are to recollect, also, committee, (Mr. TYLER,) has advanced an opinthat one of the terms was a delay of six months. ion, not the less extraordinary and unexpected The January dividend was to be paid in the fol- for the explanation of it given by the chairman. lowing July, and the July dividend in January. He thinks that even if there was a gain, it would Supposing three months necessary for making not increase the dividends of the American stockthe remittance, there would remain three months, holder, because, if I understand him correctly, during which the bank might have the use of the remittances would not be made till after the the money, equal at least to one-and-a-half per dividend, and the loss or gain would not till then cent.; and during which, too, the bank would be ascertained. What does he suppose would have the range for selecting the most favorable become of the gain? Would it not go into the moment to buy exchange. Its range for selec- general profits of the bank? He did not recoltion would, indeed, be much more extensive-it lect that, though the remittance would follow one would be almost unlimited; for, as it was author- dividend, it would precede another, through the ized to deal in exchanges, it would always have whole term of the charter. It might with equal funds or credit abroad, to be supplied or drawn correctness be affirmed, and for the same reason, upon, according to the state of the market for that the dividend could not be diminished by a bills. loss on exchange, and then, I suppose, we should arrive at a result exactly right, that the dividends would neither be increased nor diminished. A moment's reflection will convince him of his error. And now, sir, I may be allowed to ask, whether this arrangement is not what every man would have made in his own case? Is it not what every merchant does habitually, and every planter too? Why, then, should we impute it to unworthy motives? If this measure was right to be adopted at all, it was right to be adopted at that time, and precisely for the reason assigned in the letter of Mr. Donnell. If foreigners were to become the owners of stock, it was for the interest of the American stockholder, as well as for the interest of the nation, that the rise should take place before they became purchasers, rather than afterwards. This is a proposition that no one will be inclined to dispute, and of course it cannot, with any color of reason, be denied, that if measures were in the contemplation of the directors, which would have a tendency to enhance the value of the stock, they were bound in duty to adopt them, in the early part of the institution, so that the American stockholder might have the benefit of the rise, and not the foreigner; and the nation have the advantage of the increase of the exchangeable or market value of the stock. The prospect of the enhancement of price was itself an equivalent to the American stockholder for any possible loss on exchange. But, while I agree that paying the dividends in England (which is not objected to) was calculated to raise the price of the stock, for the reasons before stated, I am not satisfied that paying at the par of exchange would necessarily have that effect. If it was likely to be advantageous to the bank, as I believe it was, it was for the same reason likely to be disadvantageous to the foreign stockholder. What the one gained on exchange, the other would lose. The materials for calculation were as open to the one as to the other. The report seems to suppose that it would raise the market in England, and that the rise there would operate upon the market here. The reasoning is incorrect, because it Another, and a heavier charge, in the estima tion of the report, is that which relates to loans on the deposite or pledge of stock of the bank. It is not disputed, and it cannot be disputed, that the directors had a right to lend on any sort of personal security not prohibited by the charter. It is equally beyond dispute that the stock was a good security. The gentleman from South Carolina bas stated, and the gentleman from Virginia has agreed, that, in the event of a dissolu. tion, the stock loans at par would settle themselves. If that be so, the security is unexceptionable. It is demonstrable, further, that, under the circumstances, the loans on stock were judicious, and for the interest of the institution. These loans did not originate in occasional resolutions; they had their origin in the fourth of the by-laws, adopted before the bank went into operation, in the month of December, 1816. The by law is referred to in the report. There were vices in the banking system, as it was then commonly conducted, which the directors of the Bank of the United States were anxious, as far as possible, to correct. Among them, was the use of accommodation, or "credit the drawer" paper. Another, and a very serious one, was the extensive practice of mutual endorsements. A man FEBRUARY, 1819. Bank of the United States. H. OF R. who wished to get a discount was obliged to bor- were thrown into the bank, for which the direcrow the name of a friend, and, by borrowing, tors were to find employment. If they were decame under a well understood obligation to lend sirous to place a part of it upon stock, upon a his own name in return. A connexion was thus good security, bearing some resemblance to that formed that involved both in the fate of either. which had thus been taken from them, rather If one failed, he dragged the other after him; and than hazard it all at once upon personal security, indeed it often happened that, by multiplied en- it was a natural, a prudent, and a commendable tanglements of this sort, the ruin of one man desire, and it was in precise conformity with the injured, perhaps destroyed, the credit of many. original plan of the bank, as well as with the The fourth by-law was intended, and honestly "gradual extension" which the report, in one and prudently intended, to diminish these evils. part, thinks was expedient. It was a desire, neIt provided that accommodation paper should not vertheless, however prudent, not likely to be gratibe discounted; and, to limit as much as practica- fied. The stock was then rising, and reached ble the evil of mutual endorsements, it invited somewhere about $140, as appears from the table persons applying for discounts to deposite per- of prices exhibited by the committee. They sonal security instead of endorsers. The subse- were not to expect stock to be deposited at par, quent resolutions of the board, (excepting that of when its market price was $140. On the conthe 25th August, 1817, which shall be distinctly trary, with a rising market, there would be a conconsidered.) were evidently adopted only to carry stant tendency to escape from the deposite, and to the fundamental by-law into execution, by ex-disappoint the wish of the directors, which was tending it to the branches, and by declaring the to increase and not to diminish this kind of serates and other terms upon which the several curity. It was under the influence of views like kinds of stock should be received in pledge or these, I should suppose, (as stated by the late deposite. They were thus, by a very obvious President, in his examination, among the docureference to the original source, freed from the ments) that the resolution of the 26th of August suspicion of having been produced by occasional was adopted, combining the two kinds of loanmotives of speculation, and placed upon their on personal security, and on stock, in order to intrue foundation; which no one, I think, will decrease the quality of the latter. I repeat that I do ny, is solid enough to sustain them. Such was the character of the resolutions of the 18th December, 1816-(Documents, page 65,) and of the 25th July, 1817. not approve of this resolution, and for this simple reason, that, as, in the discounts upon stock, they regarded only the security, and not the person, or the amount, I do not see how the two kinds of loan could thus be combined, without the temptation to lend more to individuals upon the personal security, than was either prudent or proper; inasmuch as the loan upon the personal security was always to bear a fixed proportion to what was considered as lent upon the stock. But the question is, whether it was sincerely adopted, for the reasons given, and not to promote a scheme of stockjobbing. The board soon put an end to its active existence, which must be regarded as some evidence at least of sincerity. The resolution of the 25th August, 1817, authorized the loan of $125 upon stock, with two approved endorsers, who, as the report explains it, were only to be security for the 25 per cent. excess beyond the par value of the stock deposited. This resolution, I have no hesitation to say, I do not approve, for reasons, however, very different from those stated in the report. Sir, the directors themselves did not long approve it. The resolution was acted upon but a very short time, not more than a week or ten days, and the amount loaned under it appears, from the documents, to. What are the objections made to this kind of have been small. Let us now for a moment ex- discount? Not that they were insecure or imamine the operation of these measures. The prudent, or unprofitable. No. To the whole of amount of discounts on stock remaining unpaid the loans on stock it is objected, that they inflated on the 30th July, 1817, was $5,221,267 60-(Doc- the price of the stock; in the language of the uments, page 60.) The total amount of discounts, report, "kept it constantly advancing, until it then, was $25,770,120 59. So that there were reached a point where it exploded and fell," loaned on personal security about $20,000,000, (page 11.) The first point to be established, in and on stock about $5,000,000, which no one can order to support this position, is, that the stock affirm to have been an undue proportion. If the ever has been inflated beyond its real value. original by-law, and the resolutions made in pur- What is its real value? Sir, it is (within certain suance of it, were right, there was now additional limits) matter of opinion, matter of conjecture, motive for desiring to extend their operation-depending upon a thousand considerations, and, that is, to increase the loans on stock. It was originally designed, as I have already stated, that the capital of the bank should be composed in part of public debt, bearing interest, and to be gradually converted into active capital. The whole of it, exceeding thirteen millions, and including two millions which the bank had endeavered to convert into specie, for the benefit of the country, was redeemed at par on the 31st July, 1817, and in place of it thirteen millions of money among the rest at the present moment, depending upon the decision of the House. What will it rise to hereafter? No one can tell. It is an institution of great resources, calculated, I believe, if supported by the public confidence, to be a blessing to this nation, in peace a bond of union, a sinew of strength in war. But what, at any given time, will be the price of its stock, I will not venture to predict. Have purchasers been injured? That depends upon what the price |