and Dublin, Edinburgh and Liverpool? If you are, state your knowledge of them. 22. Are not the exchanges in Europe usually at sight, or af short sight? 23. Are not the exchanges in which the Bank of the United States generally deal, at sixty and ninety days, and four months, and sometimes six months? 24 Does it not give an important advantage to the Bank of the United States, to unite in one operation the business of discounting, brokerage and exchange? 25. Do you not frequently decline purchasing or selling bills of exchange, when the course of exchange is unfavorable? 26. Is not the business of buying bills on Europe in the south, and selling them in the north, highly advantageous to the Bank of the United States? 27. Will you state the highest or lowest rates at which the bank has purchased bills of exchange in New Orleans upon England, in the year 1831, and the highest and lowest rates at which you have sold the same bills of exchange in Philadelphia and New York? 28. Does not the difference between the purchase of foreign bills in Charleston, Savannah, Mobile and New Orleans, and the sale of the same in the north, constitute the profit of the bank on such operations? 29. Cannot the bank, by curtailing its discounts, produce a temporary scarcity of money, deprive traders of the means of making remittances, and thereby depress exchange when it wishes to purchase; and can it not, on the other hand, discount liberally, and raise exchange when it desires to sell? 30. Has not the bank repeatedly raised and depressed foreign exchange one per cent. in a week, and sometimes in less time? 31. Do not the exchange operations of the Bank of the United States, tend to diminish the number of those who deal in exchange, and consequently to diminish that competition which ultimately equalizes exchange in all countries where trade and confidence exist? 32. Suppose the bank was restricted to buying and selling domestic exchange at par, deducting the interest only, (according to the practice of the banks of Scotland,) would it not continue to discount bills at two, three, or four months, between different parts of the Union, as it now does ? 33. What would be the effect of limiting the discounts of a National Bank entirely to domestic exchanges on such a plan? 34. What was the average amount of capital employed in buying and sel· ling foreign and domestic exchange, and what was the aggregate amount of profit on that business in 1831? Examination of the President of the Bank of the United States on the subject of branch bank notes and drafts. 1. Since you began to issue branch drafts, t appears that your circulation has increased many millions-do you think it would have increased so rapidly if you had continued to issue none but notes signed by the President of the bank? 2 Does not issuing branch drafts and notes redeemable at your interior offices, enable you to sustain in circulation, a larger amount than could be sustained if your notes were issued and redcemable principally at the offices on the Atlantic? 3. What was the amount of notes issued from the offices at Baltimore, Philadelphia, New York, and Boston, which were in circulation on the 1st of January last, and what the amount for all the other offices? 4. When overtrading occur from whatever cause, does it not draw into the large revenue ports on the Atlantic a large amount of these interior bank notes and drafts, which press severely upon the offices at Baltimore, Philadelphia, New York, and Boston? 5. You have stated to the committee that the parent bank redeemed $5,398,800, and that the branch bank at New York, redeemed $13,219,635 of branch notes and drafts during the last year? is it your opinion that the branch at New York would have been able to redeem thirteen millions of the notes of other branches in one year, if any circumstance had occurred to exexcite alarm? 6. If the offices at Philadelphia, New York, and Boston, found it difficult to pay their notes in specie, and receive these branch notes for revenue in 1819, when the whole circulation of the bank was about six millions, would it not have been, under similar alarm, more difficult in January last, with a circuJation amounting to near twenty five millions? 7. When too large an amount of these branch notes press upon the offices here and in New York, is not the bank compelled to curtail its facilities to southern and western traders? 8. So long as the bank continues to enlarge its circulation through its interior offices, and the branch at New York is bound to receive the whole of these branch notes, if presented, in payment of revenue bonds, must there not be, periodically, a pressure on that branch, which must re act on all the offices in towns or cities trading with New York? 9. Dces not such a plan of general circulation inevitably tend to disturb the regular course of trade, by occasionally obliging the bank and its branches to curtail its discounts at some points, and enlarge them at others, and by transferring funds between branches, not according to the wants of trade, but the necessities of the bank and its branches? 10. Will you explain what substantial difference there is between the present plan of circulation and redemption of the branch bank notes, and an obligation on the part of a bank in Philadelphia to redeem the notes of all the country banks in the State of Pennsylvania? 11. What would be the condition of such a bank in Philadelphia, should the country banks issue an extraordinary amount of bank notes? 12. Was not the branch bank at New York compelled to receive about seven millions of the notes of other branches in the last five months of the last year, and was not its specie, in the same months, reduced from $2,226,429 81 to $664,686 64? 13. What is your opinion of the expediency of making all the notes issued by the Bank of the United States payable at one place? 14. Would it not tend to diminish the aggregate circulation of the bank, and prevent any extraordinary or sudden increase of circulation, and would not the bank have greater power in regulating the amount of its general eireulation? Examination of the President of the Bank of the United States, on its investments in public debt in 1824 and 1825; and the ability of the 2 bank to make loans to Government. 1. I perceive that, between June 1824 and June 1825, the bank increased its investment in funded debt from about ten to twenty millions-do you think that the bank can aid Government with long and large loans with safety? 2. If the bank had not employed its funds in Government loans, (without the power to sell the stocks,) would it not have been better prepared to meet the crisis you have referred to, growing out of the speculations in 1825? 3. Would the bank have been compelled to resort to the expedient, as you have stated, of procuring a temporary loan from a private source in 1825? 4. Had the same investment been made during war, would not the bank have been compelled either to sell its stock at once, or suspend specie pay. ments? 5. Is there not a material difference between originally investing the capital of a bank in funded debt, and subsequently attempting to make loans to Government? 6. After a bank is in operation, its capital invested, and its notes in circulation, how can it make long loans to Government without curtailing its discounts, increasing its capital by a new subscription, or by augmenting its paper money? 7. How can a bank continue to hold such loans, and make dividends, without increasing its paper, depreciating the currency, forcing specie abroad, and suspending its payments in gold and silver? 8. When a bank takes a loan from Government for the purpose of selling it to fund-holders, is it any thing better than a mere speculator upon Government? 9. So long as the Government holds an interest in the stock of the bank, does it not effectually secure a monopoly of every Government loan which Congress authorizes it to contract for? 10. Would not competition among banks and fund-holders secure loans to Government at the lowest rate of interest? 11. In case of war, will you explain how the Bank of the United States can efficiently aid Government with loans, without inevitably suspending specie payments, and substituting a paper for a metallic currency? Examination of the President of the Bank of the United States on the influence of the operations of the Bank upon trade. 1. Since 1816, have we not experienced reactions in 1818-19, 1825-26, 1829 30; and has not the demand for money been increasing since October last? 2. Are not such reactions in trade usually attended with stagnation of industry, bankruptcies among traders and manufacturers, and distress among laborers thrown out of employment? 3. In every such reaction, does not a large amount of property pass from the active and enterprising to the wealthier classes? 4. Are not countries where a large paper circulation is substituted for a metallie currency most liable to these distressing fluctuations? 5. Does not this arise, in a great degree, from the tendency of prices where such a currency exists to rise higher and fall lower, than in countries where the price of labor and the value of property are more uniform through an unchanging and sound currency? 6. Independent of the various incidental causes which may agitate trade at any time and in all countries, are not some of the fluctuations in the value of property of all kinds exclusively attributable to changes in the revenne laws, and do not the most violent arise from sudden alterations of the currency, or from too abrupt an expansion or contraction of bank loans and circulations? 7. If a bank or a government adds ten millions suddenly to an existing paper currency, and as suddenly loans it to trade, will it not injuriously affect both your trade and your currency? 8. Is there any substantial difference between issuing ten millions of a new paper currency, not representing capital, and arbitrarily adding that amount to the value of your metallic currency by increasing its value by law, except in degree, as to the suffering of the community? 9. Was not the distress of 1818 and 19 caused, or its severity much increased, by the proceedings of the Bank of the United States between January, 1817, and October, 1818, in too rapidly loaning more than forty millions of dollars, and in increasing our general circulation upwards of ten millions. in bank notes? 10. Was not the distress much increased by a sudden contraction of its loans and circulation, between July, 1818, and May, 1819? 11. Was not the distress of 1825 and '26, much increased by the change in our revenue laws in 1824, by the increased loans of the Bank of the United States-by an addition to its circulation between the 1st of January, 1824, and the 1st of July, 1825, of five millions of dollars, and by too rapidly increasing its investment in funded debt, from June, 1824, to June, 1825, from ten to twenty millions of dollars? 12. Supposing the speculations and reaction of 1825, '26, to have originated in England, should we not have been less affected by it, had not the circulation and funded debt of the bank both been suddenly doubled? 13. Was not the distress among our manufacturers in 1829, '30, partly attributable to our tariff of 1828, and to the banks increasing its circulation four millions, and its total investments five millions, from June, 1828, to June, 1830? 14. To what other cause than the operations of the Bank of the United States can you attribute the demand for money which began in October last, and has continued to the present time? 15 Was it not the natural consequence of the bank's rapidly increasing its bank note circulation from the 1st of January, 1829, to the 1st of January, 1831, ten millions, and its total discounts in thirteen months, to the 1st of January last, from forty-one to sixty-six millions of dollars? 16. Was it not probable that an increase of loans, and bank notes, corresponding with that made in 1817, '18, might, in 1832, be followed by consequences similar to those realized in 1819? 17. Was not a rapid addition of twenty five millions to the discounts of the bank, and a sudden transfer of loans from Government to trade, calculated inevitably to produce general overtrading? 18. Did not the sudden addition of ten millions to our bank note circulation affect our currency unfavorably, and force our specie abroad? 19. Did not the Bank of the United States lose, between the 1st of July and the 1st of January last, five millions of its specie? 20. Had the directors of the Bank of the United States become alarmed, as in July, 1818, and resolved to curtail their loans extensively, or had any political or commercial event occurred to produce a sudden contraction of the expanded circulation and loans of the bank, should we not have seen the same demand for its specie, and the same commercial distress which the bank brought upon itself and the country in 1819? 21. Did not the President and directors of the Bank of the United States, on the 7th of October last, direct a circular to be addressed to the cashiers of all the offices, instructing them to curtail their business, and to favor the offices at New York and Philadelphia, as much as possible; and will you insert a copy of that circular in your answer? 22. Were not similar instructions given in October, November, December, January, and February; and did not the demand for money, which the circular states to have been "active," on the 7th October last, continue to increase? 23. Was not the pressure on Louisville and Cincinnati so severse, that, on the 3d of March, orders were given not to insist on the proposed reduction, but to proceed to accomplish the object they had in view in as gentle a manner as possible, under circumstances so distressing? 24. Did not the President of the bank (Mr. Cheves) inform the Secretary of the Treasury, in April, 1819, that the bank could not pay the Louisiana debt of three millions, without negotiating a loan in Europe; was not two millions actually borrowed in Europe; and did not the President ask other indulgencies of Government? 25. Has not the bank asked Government to postpone the redemption of the three per cents. from July to October; and has it not assumed the payment of one quarter's interest, being substantially equivalent to a loan of six or seven millions for three months, made by the Government to the Bank of the United States? 26. Had your loans and circulations been gradually increased; had not near twenty millions been added to our bank note circulation since 1824; and had not your facilities to trade been extended in the four years preceding the first of January last, from thirty-three to sixty-six millions of dollars; do you think the bank would have found any difficulty in transferring sufficient funds abroad to redeem that portion of the three per cents. which is held in Europe, and which might not have been re invested in this country? 27. When an institution, with investments amounting to seventy-five millions, commanding the foreign and domestic exchanges of the country, and monopolizing the Government deposites, cannot, at the moment when we are exporting our annual crop of cotton, amounting to twenty millions, transfer a few millions of its funds abroad without embarrassing its operations, and seriously distressing traders; is there not reason to believe that its business has been too much and too rapidly extended? 28. Can any bank, confining itself to the legitimate business of a banker, which never forces its loans upon trade, or its notes into circulation by extraordinary means, ever be compelled to curtail its loans, or to ask indulgence from its creditors? 29. Do you not consider the resolutions of the board of directors, in 1830 and '31, to make long loans at reduced rates of interest, on pledges of stock, as a species of forced loan; and the expedient of issuing branch |