authority to appoint, and to him is given the authority to remove, the directors on the part of the Government, (sec. 8.) A much more important sanction is the power given to the Secretary of the Treasury, by section sixteen, to withdraw the public deposites, laying before Congress his reasons for so doing. The interests of the stockholders, which form the remaining branch of this great national concern, were intended to be left to the care of the stockholders themselves, as their best and safest guardians-their natural guardians; and it is the right of the stockholders to delegate the authority to such directors as they may think proper. This right is enforced and secured by the power of election. Their servants are accountable to them, precisely as we are to our constituents. If, upon a review of our conduct here, they are not satisfied with our efforts to serve them, they elect us no more, but devolve the honorable trust of representing them in the councils of the nation, upon others, whom they think more worthy of their confidence.

These provisions, thus arranged and distributed, are of sufficient efficacy for all the purposes that were designed to be accomplished. Thus arranged and distributed, they are in harmony with each other; and, while every interest is guarded by its appropriate sanction, they all co-operate to secure the common result-a faithful administration of the bank.

If this be a correct exposition of the terms of the charter, our inquiry ought, properly, only to be, what alone it can be effectually, whether the charter has been violated. Any other course will inevitably lead us into difficulty. If we undertake to examine the general administration of the affairs of the bank, or to investigate the conduct of particular directors, we are involved at once in the danger of an interference with the Executive. To that department it belongs to decide whether the public duty has been performed. The officer at the head of the Treasury must always be well qualified to decide. None but a citizen of distinguished talents will be placed in that high and responsible station; and, when there, his official occupations, the habitual tenor of his studies and reflections-his daily acquaintance with the management of the bank, in all its relations to the fiscal concerns of the nation, as well as his repeated inspection of the statements exhibited, will enable him, better than any other person, to judge how far its concerns are faithfully administered towards the public. Are we not in danger, too, of involving ourselves in collision with the Judiciary? We are here entertaining a mixed inquiry, partly of expediency and partly of charter right, mingled in such a way that, in deciding whether the charter has been violated, we make no distinction between errors, or, if you please, misconduct, in the management, and such offences of the corporation as would work a forfeiture of the charter. Indeed, the distinction, obvious as it is, seems scarcely to have been noticed, either in the report of the committee, or in the debate that has taken place. The great stress of objection has rested, not so much upon

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the specific violations of the charter, alleged to have been committed, as upon the more comprehensive ground of mismanagement in the exercise of indisputable charter-rights. Suppose, then, that, under the impression of considerations like these, you send this corporation to the Judiciary, there to receive its trial; you may send it there with all the weight of prejudice arising from a vote of Congress; you may, and you will, in some degree, pre-occupy the public mind, always deeply affected by the judgments of their representatives; and you may, and probably will, more or less impair the chance of a fair and impartial trial. But, when this trial shall come; when the corporation shall appear at the bar of a judicial tribunal, there will be an end to every question except the naked question of forfeiture; there will be an end to every consideration that is foreign to that precise inquiry, and then the consequence will be, that, following a different rule of judg ment, the judicial tribunal will probably arrive at a different result. You are thus in direct collision. Different departments of the Government are placed in a state of hostility towards each other, the public mind is irritated, and that harmony which we all know to be of so much importance in the structure of our Government, is uselessly endangered.

Sir, we interfere, to a most alarming extent, with the just power of the stockholders. They are the exclusive judges of whom they will have for directors. They are the best judges. That sure instinct, "that keen, steady, and, as it were, magnetic sense of their own interest," which every man feels and obeys, in his own concerns, is the best security to be relied upon for a careful and prudent selection. It is the right of the stockholders, by the charter, and it is almost the only right they have reserved. To the Government they have conceded much; for themselves they have retained only the power in question, to be exercised under such modifications and restrictions as Congress thought fit to prescribe. Upon the faith of an undisturbed and free enjoyment of this republican right of choosing their own representatives, they have embarked their property in the institution; and would you, can you, without doing unjust violence to the compact you have made with them, impair or disturb the exercise of the power that belongs to them of judging for themselves whom they will have for directors? Sir, I will put to you what may, at this moment, perhaps, be deemed the strongest case. Suppose they choose to elect a broker, or a speculator-can you say they shall not? Have you the power to tell them what shall be the occupation, what the character of the men whom they are to employ? You may think their selection unwise or imprudent, but they will answer you that they know their own interests, and are able to take care of them. That, in the very instances you object to, though the individuals may be obnoxious to the imputation of being speculators or brokers, and you, on that general ground, may think them exceptionable, yet they, the stockholders, have the means of knowing their

individual characters, from various sources inaccessible to you, and feel the fullest confidence in their intelligence and fidelity to the institution. I do not now touch the question of elections; it belongs to a different part of the inquiry.

I will make but one observation more upon this branch of the subject. It is essential to the interests of the stockholders, and it is no more than just to the directors that the latter should be free while they are performing the duties that are assigned to them; that they should be free, not only from all restraints except those to which the law subjects them, but that they should be free from the apprehension of an unlimited and undefined accountability. Many things are exclusively confided to them, and must be so confided. Their own judgment, fairly applied, their own discretion, is what must guide them. Who will undertake an office like this, if he is to act under the terror of an investigation that may put the worst construction upon well meant efforts; that may even expose his best acts to censure, and which, governed by no known rule in its course, and limited by no measure in its result, is calculated to confound all distinction between the officer and the individual, between error and misconduct, and, by a hasty sentence, to inflict the keenest punishment that an honorable man can endure? And this, too, upon what a member of the select committee has termed, and properly termed, an ex parte inquiry, where the accused has not an opportunity either of explanation or defence, and where the first notice he receives is in the heavy condemnation going forth against him, under the respected authority of a committee of this honorable House.

H. or R.

I will now proceed to consider the subject, under the two aspects in which it is presented by the committee.

I. As regards the general management of the institution.

II. As regards the alleged violations of the charter.

1. We all of us remember distinctly the state of things that existed when the law passed for incorporating the subscribers to the Bank of the United States. We had a currency, or rather, to speak more accurately, we had currencies, local in their circulation, and variously depreciated in different parts of the Union; in some quarters of the country as much as twenty per cent. We had no general currency-none that would circulate freely everywhere. The evil effects were already very manifest, and threatened to increase. To say nothing of the obstructions and difficulties that were thrown in the way of domestic commerce and exchange, nor of the continual irritation that was occasioned by the changes in value that took place at every step, taken by what was called money in its progress, either with travellers or traders, through different parts of the Unionto say nothing of the effect upon the credit of the country-but passing these by as evils that were familiarly known and felt, there still remained one great source of grievance and public mischief which it peculiarly became the duty of the Government of the United States to endeavor to remove. The revenue of the Government was received in the paper of the State banks-its debts were paid in the same paper. What was the consequence? Its funds were not tranferable from place to place, according to its wants, but confined Sir, other objections will readily present them in their use to the local limits which bounded selves to such an inquiry. We have no rule or the circulation of the paper in which they happrinciple to direct us, no more than one man pened to be paid. There was nothing like uniwould have in judging whether another man-formity in the payments made to the Government. aged his estate to the greatest advantage. If the inquiry were simply whether the charter had been violated, we should have a comparatively easy duty. There might, and from what has occurred, I think it probable there would, be difference of opinion. Still, we should differ only about the application of established rules, and should be relieved from the most unpleasant part of the present inquiry.

But I know well that every public body, however constituted, listens with reluctance and with some displeasure to any argument or suggestion that tends to bring in question its own power. I do not mean, for it is no longer material, to question the power of this House in its immediate application to the business in hand. It is too late. Still less do I mean to avoid the full examination of all the grounds of complaint and censure that are displayed in the report of the committee. But I have thought it right to submit, with candor and freedom, such observations as occurred to me, upon the general nature of the authority possessed by this House, chiefly with a view to expose the mischiefs that might result from transcending it. Every member will allow to them weight as he thinks they deserve, and no more.

A merchant in Boston, owing precisely the same nominal amount, paid twenty per cent. more than a merchant in Baltimore. There was the same inequality in the disbursement as in the receipt of the revenue. The public creditor, who had the good fortune to receive his money at Boston, received twenty per cent. more than the creditor who was obliged to receive it at Baltimore or Washington. In addition to all the inevitable evils that belong to such a state of things, (sufficient surely, if allowed to continue, to have endangered the well-being of the Union,) there was one, perhaps, also inseparably incident, that began to manifest itself. I allude, sir, to the power it gave to those who were intrusted with the collection and disbursement of the public moneys. They had the opportunity of benefiting themselves, and of favoring their friends, at the expense of the Treasury and at the expense of the public creditor. The very possibility of such an abuse was a sufficient ground of suspicion. At the period we are speaking of, an officer of the Government found it necessary to ask of this House an investigation of his conduct, in order that he might vindicate himself from certain injurious rumors circulated against him, upon no

better foundation than that I have mentioned. The investigation took place; the result was satisfactory; and I refer to it only to bring into view one of the many kinds of mischief that grew out of the disordered condition of the currency. Whether the State institutions would of themselves have corrected the evil I do not think it necessary to inquire. The Government of the United States had no direct controlling power over them; and if they had so far sacrificed their own interests, in deference to the public good, as to restrict their business, and, of course, their profits, it must have been from a voluntary submission to motives of a higher character than ordinarily govern the conduct of individuals or bodies. But this I will say, that, if they were to be brought back by anything deserving the name of coercion, it could not have been by a gentler coercion than that which has been employed by the Bank of the United States. Sir, when this subject was before Congress, at the time of passing the act of incorporation, it was thought by many that the destruction of the State institutions would rapidly follow the establishment of a National Bank. I confess myself to have been one of those who were influenced by this apprehension. I thought the new institution would press heavily upon the old, and through them would press severely upon the community. I did not then see how the great public views were to be realized, without departing from that course of lenity towards the State banks which the interests of the community seemed most imperiously to require.

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less, indeed, he has employment for his dollar at New Orleans, in which case it may be worth more or less to him, according to circumstances. We might as well pretend to make a bag of cotton worth as much upon the plantation where it is produced, as in the warehouse at New York, or in the manufactory at Philadelphia. But this part of the subject has already been fully and ably handled by the gentleman from South Carolina, (Mr. LOWNDES,) who has shown conclusively that the currency afforded by the Bank of the United States approaches nearer to uniformity throughout the whole extent of this great country, than has been attained by nations possessing at least equal advantages, and operating within much narrower limits.

Neither was it understood or expected that the bank would be able to place, and to keep in circulation, everywhere, as much as in each particular quarter of the Union might be wished or wanted. This is impracticable in regard to States and districts of country, as it is with respect to individuals. A parent may give to a child a fortune adequate to his support, and suited to his circumstances, but he cannot prevent him from wasting or parting with it, unless he imposes restrictions upon its use. The very phrase, a uniform currency, implies a currency that will pass everywhere-that will flow everywherewithout any obstruction but what arises from the expense of conveyance; of equal value everywhere, and, for that very reason, in unequal quantities. It is the precise distinction between the paper of the Bank of the United States, and the paper of the State banks; which, having no currency beyond certain local limits, remains within them in greater abundance than is necessary. It is the same distinction which exists between either kind of paper, when not redeemable, and gold and silver. We may illustrate it more clearly by an instance: A merchant in the State of Ohio makes a sale in Ohio, in order that he may be able to buy in Baltimore, or he sells in Baltimore that he may buy in New York. He wishes, in either case, to receive what will pay for his purchase in Baltimore or New York, and he carries from the place of sale to the place of purchase the amount that he has received. It has happened to most of us to have some experience of the nature of this distinction. merly, there was great complaint by travellers in some parts of New England, that the money, or rather the paper, they received in one town would not pass in another. There, I believe, the Among these the most interesting, and in every grievance has ceased. But in other parts of the point of view the most important that which country we experience it every day, being obliged chiefly induced the passage of the law, was the continually to inquire whether the paper put into introduction of an uniform currency, in sufficient our hands in one place will be taken in payment quantity to answer the purposes of circulation, in another, and feeling instantly the inconveniso far, at least, as to enable the Government to ence, if, by mistake, we carry it beyond the limcollect and disburse its revenue. I mean a cur-ited bounds of its circulation. rency as nearly uniform as the nature of things did admit. It cannot be supposed to be within the power of any government, or of any bank, to make a dollar at New Orleans worth as much to a merchant in Boston, as a dollar in Boston; un

The objects to be attained were thus immense: the interests to be conciliated were of the highest importance, and at the same time apparently irreconcilable. The task was a fearful one, and the manner in which it has been executed, when it comes to be fairly developed, will seem little short of marvellous. If proof were necessary of what was generally thought at the time, of the burden the bank had assumed, and of its capacity to bear that burden, we might refer to the history of the subscription at the opening of the books. Great doubts were entertained whether it would be filled; in fact it was not filled during the twenty days prescribed by the law. There re mained unsubscribed above three millions of dollars, nearly the whole of which was taken by one individual at Philadelphia.

I will now proceed to show what the bank has done; considering, first in order, the National objects it was designed to accomplish.

For

Where the currency has the quality I have mentioned, that is, of uniform value, or nearly uniform, the quantity that will remain at any given place depends upon the course of trade; the quality depends upon its solidity; it is only

FEBRUARY, 1819.

Bank of the United States.

H. OF R.

to Baltimore," I am altogether at a loss to understand.

to be obtained by buying or borrowing. The memorial to the Ohio Legislature, or the report of a committee of that body. (I do not know But, considering the diffusion of an uniform which, for I was not in the House when it was currency throughout the United States, in suffiquoted by the gentleman from South Carolina,) cient quantities for public purposes, to have been complains, in substance, that such a currency was an important public object, it will be easy to furnished to them. That is the amount of the show that the imputed error is far from being complaint, for they say they were tempted to censurable. To put in circulation such an uniemploy it in purchasing from the cities to the form currency as has been described, in the maneastward beyond what they ought to have purner most advantageous to the Union, it was nechased. A very singular complaint, indeed, cessary, when the bank was organized, to give a which charges upon others the consequences of preference to those States against whom there their own imprudence. The complaint should existed an unfavorable balance. It would flow be, that they did not keep what was given to from them in payment of their debts, (retaining, them, or at least a portion of it, and use it, as if they were prudent, what was required for loca! they might have done, in the payment of their purposes,) where it ought to go-that is, into the dues to the Government. There is no doubt, creditor States-and thus the creditor States be however, that they have approached, if they have supplied. But what was thrown by the bank not reached, the true cause of their present em-into the creditor States would never find its way barrassments. This currency would not have wandered away, and left them destitute of the means of paying their debts, if their local circulation had not been overcharged with State bank paper, depreciated from its abundance-too easily obtained-supplying the purposes of local exchange, and failing, when it was wanted, for the more extensive exchange, to which the United States Bank paper, from its uniform value, was exactly adapted. The paper and credits afforded by the Bank of the United States were thus banished by the local paper; they were sent off to perform the distant service of buying in the cities at the eastward, and the people of Ohio kept nothing to pay their debts but the paper of the State banks. This was their own fault, imputable to themselves alone. Time, economy, and the industry of the State, employed in producing what will buy money, or, in other words, what may be exchanged with those parts of the Union where the money has gone, will bring all right.

to the debtor States, unless it were in the shape of loans by them, which was not to be expected. If an individual, having a sum of money to lend, was disposed to lend it to one of two persons, each of whom he was equally inclined to serve, and in both of whom he had confidence as to their ultimate ability to repay, if in that case he could lend it only to one, and it so happened that one of them was indebted to the other, would he be most likely to benefit both by lending it to the debtor, or by lending it to the creditor? The answer is obvious: if lent to the debtor, he would be enabled to apply it towards payment of his debt, retaining what might be necessary for more urgent wants, the creditor would receive his money, and both would derive some advantage; if lent to the creditor, none of it would find its way to the debtor. A different course would, perhaps, have been more for the interest of the institution, as it is always better to lend to the rich than to the poor-I mean better for the lender. But, if the object was to distribute an One of the charges made by the committee uniform currency throughout the United States, against the management of the Bank of the there was no error. That such a currency has United States, (and which this is the most fit been introduced, in sufficient quantities to answer place to notice,) is on account of the supposed all the purposes of the Government, cannot be excessiveness of its loans in those States and cities controverted. It is undeniably proved by the against which there was a balance of trade-those fact, that the receipts and payments of the Treawhich, to simplify the idea, were debtors, partic-sury are ever made in a currency of uniform ularly in Kentucky, Ohio, in Baltimore, and Philadelphia. The argument they employ to sustain this charge, namely, that injustice was done to the States and cities which had the balance in their favor, or were creditors, has already been amply and conclusively refuted. It has been shown, indeed it appears from the statement of the report itself, that these loans were in the highest degree beneficial to the creditor States and cities, the money obtained by the borrowers going directly thither, and enabling them to obtain specie from the branches, to be employed in the manner most advantageous to themselves, either by their banks or by individuals. "The effect of these draughts upon the Northern offices, was, to compel the constant remittance of specie there," &c. (Report, p. 4.) How, then, it can be said "that those places were made tributary

value. Neither can it be controverted that such a currency has been introduced into every quarter of the Union in sufficient quantity. If it has not remained in the places where it was introduced, that cannot be chargeable to the bank, for the bank had no power to prevent its migration or transfer. So far, therefore, as respects this great object-an uniform currency-the duty of the bank towards the public has been faithfully and fully performed.

Nearly connected with this subject, was the effort to make the branch notes payable everywhere, without regard to the place of payment indicated upon the face of them. It would undoubtedly have been a great public convenience, but it was more than the public had stipulated for, and more than the public had a right to expect. I think it easily demonstrable that the

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Bank of the United States.

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system could not be acted upon without great But the manner in which the bank has perinconvenience and loss, and serious danger to the formed its duties towards the Government, the serinstitution. It must be remembered, however, vices it has rendered to the Government and that the practice of the late Bank of the United nation, cannot be more plainly evinced than by a States, whose notes were only payable or receiv- statement extracted from the documents furnished able at the place where they were made payable | by the select committee. The bank commenced on their face, had been strongly (though I agree its operations about the 1st January, 1817, exceptunreasonably) reprobated. It must be remembering a loan to the Government, of $500,000, made ed, too, that many well-informed men believed in in December, 1816. The public deposites, on the the practicability of the plan first adopted by the 31st January, 1817, amounted to $1,147.772 97; present bank; and probably nothing but experi- in the following March they had risen to $11,615,ence (the most authoritative of all teachers) 017 62; the 30th April they were $11,345,796 75; would have convinced them of their error. Un- and on the 29th July, $24,746,641 26. This, sir, der these circumstances the experiment was per- was when the bank had been in operation but six haps necessary to be made, in order that the months. That this immense amount of $24,746,public might be fully satisfied. It was certainly 641 26, was the saving of the revenue received well meant and innocent. "The wants of the during that time, no one will pretend. It was 'country and the interest of the bank (says the the accumulation of revenue previously collected, ' president in his letter of the 4th October, 1817, distributed throughout the United States, in cred'documents, page 28) require an extensive circuits 'lation of its paper; and it is the policy of the 'parent board to encourage the indiscriminate ' use of the notes of the bank, reserving for impe'rious circumstances and inevitable occasions the exercise of the legal right which it possesses of declining to receive or pay, except at the respective places where payment is promised on the face of the notes." The experiment has been made; experience has condemned the attempt. "Imperious circumstances" have compelled the bank to exercise the right it possesses; and I am glad to find that the report of the committee approves the change, and admits that it was made in the manner least exceptionable and inconvenient. There must be an end now to the complaint which has been made about this act of the bank.

I will now ask the attention of the Committee to another branch of the public management of the bank that which regards its duties towards the Government. Of the manner in which these duties have been fulfilled, no one can be better qualified to judge than the Secretary of the Treasury; no one would more promptly feel the inconvenience of the smallest failure, as they are all intimately connected with the fiscal arrangements confided to his care. His testimony therefore ought to be of the greatest weight with the Committee, if indeed it be not quite conclusive. For distrust and suspicion must have acquired a most unreasonable and excessive influence in our deliberations, if they can incline us for a moment to question or doubt the statements of that high and distinguished officer. In a letter of the Secretary, during the last session of Congress, (the words of which I cannot quote, but to which every member may refer on the files of the House,) he expresses, according to my recollection, a general approbation of the conduct of the bank-as having exceeded his expectations. In his letter of the 4th December, 1818, the select committee of this House, (documents, page 95,) he states in detail how the specific duties of the bank towards the Government have been performed. I appeal to that letter to show that they have always been faithfully performed.

of State banks, variously depreciated, and of which the Government could not be said to have the command because they were local, and of course applicable only where they happened to be, and where the public service did not require their expenditure. By this single operation, twenty-four millions were thus converted by the bank from depreciated, local currency, into specie, or, what was equivalent to specie, of universal circulation, and which the Government, through the agency of the bank, might apply, without expense, whenever, and wherever, its wants or its service required.

Another convention took place immediately after, highly advantageous to the Government, and, I must be allowed to add, extremely unfavorable to the bank. With $13,398,438 02, part of the $24,746,641, 26, which had thus been appreciated, and rendered available to the Government, by the assumption of the bank, the Government, on the 31st July, 1817, redeemed, at par, $13,398,438 02 of the public debt, belonging to the bank, which had been paid in by the subscribers. The report speaks, in terms of censure, of what it styles the "unfounded and unnecessary complaint, by the officers of the bank, against this very prudent measure;" meaning the redemption of the debt. That it was the right of the Government to redeem, I do not deny. That the officer at the head of the Treasury, whose first duty is to the Government, was justified in the measure by a proper regard to the interests of the Government, I shall not at all question. I will admit, too, that, as the Government clearly had the right, and chose to exercise it, complaint by the officers of the bank was altogether useless. But, that the operation was prejudicial to the interests of the bank, and might reasonably cause some dissatisfaction in those to whom the interests of the bank was confided, I deem most perfectly evident, and altogether consistent with the zeal for the real welfare of the institution, in which some other parts of the report seem to suppose them to have been wanting. By the origihal plan, a large proportion of the capital was to consist of public debt, bearing an interest, with liberty to sell in small successive portions. The