Thirty Years' View (Vol. I of 2)

On the subject of the removal of the Indians, the message said:

"I am happy to inform you, that the wise and humane policy of transferring from the eastern to the western side of the Mississippi, the remnants of our aboriginal tribes, with their own consent, and upon just terms, has been steadily pursued, and is approaching, I trust, its consummation. By reference to the report of the Secretary of War, and to the documents submitted with it, you will see the progress which has been made since your last session in the arrangement of the various matters connected with our Indian relations. With one exception, every subject involving any question of conflicting jurisdiction, or of peculiar difficulty, has been happily disposed of, and the conviction evidently gains ground among the Indians, that their removal to the country assigned by the United States for their permanent residence, furnishes the only hope of their ultimate prosperity.

"With that portion of the Cherokees, however, living within the State of Georgia, it has been found impracticable, as yet, to make a satisfactory adjustment. Such was my anxiety to remove all the grounds of complaint, and to bring to a termination the difficulties in which they are involved, that I directed the very liberal propositions to be made to them which accompany the documents herewith submitted. They cannot but have seen in these offers the evidence of the strongest disposition, on the part of the government, to deal justly and liberally with them. An ample indemnity was offered for their present possessions, a liberal provision for their future support and improvement, and full security for their private and political rights. Whatever difference of opinion may have prevailed respecting the just claims of these people, there will probably be none respecting the liberality of the propositions, and very little respecting the expediency of their immediate acceptance. They were, however, rejected, and thus the position of these Indians remains unchanged, as do the views communicated in my message to the Senate, of February 22, 1831."

The President does not mention the obstacles which delayed the humane policy of transferring the Indian tribes to the west of the Mississippi, nor allude to the causes which prevented the remaining Cherokees in Georgia from accepting the liberal terms offered them, and joining the emigrated portion of their tribe on the Arkansas; but these obstacles and causes were known to the public, and the knowledge of them was carried into the parliamentary, the legislative, and the judicial history of the country. These removals were seized upon by party spirit as soon as General Jackson took up the policy of his predecessors, and undertook to complete what they had began. His injustice and tyranny to the Indians became a theme of political party vituperation; and the South, and Georgia especially, a new battle-field for political warfare. The extension of her laws and jurisdiction over the part of her territory still inhabited by a part of the Cherokees, was the signal for concentrating upon that theatre the sympathies, and the interference of politicians and of missionaries. Congress was appealed to; and refused the intervention of its authority. The Supreme Court was applied to to stay, by an injunction, the operation of the laws of Georgia, on the Indian part of the State; and refused the application, for want of jurisdiction of the question. It was applied to to bring the case of the missionaries before itself, and did so, reversing the judgment of the Georgia State Court, and pronouncing one of its own; which was disregarded. It was applied to to reverse the judgment in the case of Tassells, and the writ of error was issued to bring up the case; and on the day appointed Tassells was hanged. The missionaries were released as soon as they ceased their appeals to the Supreme Court, and addressed themselves to the Governor of Georgia, to whom belonged the pardoning power; and the correspondence and communications which took place between themselves and Governor Lumpkin showed that they were emissaries, as well as missionaries, and acting a prescribed part for the "good of the country" – as they expressed it. They came from the North, and returned to it as soon as released. All Georgia was outraged, and justly, at this political interference in her affairs, and this intrusive philanthropy in behalf of Indians to whom she gave the same protection as to her own citizens, and at these attempts, so repeatedly made to bring her before the Supreme Court. Her governors (Troup, Gilmer, and Lumpkin,) to whom it successively belonged to represent the rights and dignity of the State, did so with firmness and moderation; and, in the end, all her objects were attained, and the interference and intrusion ceased; and the issue of the presidential election rebuked the political and ecclesiastical intermeddlers in her affairs.

A passage in the message startled the friends of the Bank of the United States, and, in fact, took the public by surprise. It was an intimation of the insolvency of the bank, and of the insecurity of the public deposits therein; and a recommendation to have the affairs of the institution thoroughly investigated. It was in these terms:

"Such measures as are within the reach of the Secretary of the Treasury have been taken to enable him to judge whether the public deposits in that institution may be regarded as entirely safe; but as his limited power may prove inadequate to this object, I recommend the subject to the attention of Congress, under the firm belief that it is worthy their serious investigation. An inquiry into the transactions of the institution, embracing the branches as well as the principal bank, seems called for by the credit which is given throughout the country to many serious charges impeaching its character, and which, if true, may justly excite the apprehension that it is no longer a safe depository of the money of the people."

This recommendation gave rise to proceedings in Congress, which will be noted in their proper place. The intimation of insolvency was received with scorn by the friends of the great corporation – with incredulity by the masses – and with a belief that it was true only by the few who closely observed the signs of the times, and by those who confided in the sagacity and provident foresight of Jackson (by no means inconsiderable either in number or judgment). For my own part I had not suspicioned insolvency when I commenced my opposition to the renewed charter; and was only brought to that suspicion, and in fact, conviction, by seeing the flagrant manner in which the institution resisted investigation, when proposed under circumstances which rendered it obligatory to its honor; and which could only be so resisted from a consciousness that, if searched, something would be found worse than any thing charged. The only circumstance mentioned by the President to countenance suspicion was the conduct of the bank in relation to the payment of five millions of the three per cent. stock, ordered to have been paid at the bank in the October preceding (and where the money, according to its returns, was in deposit); and instead of paying which the bank secretly sent an agent to London to obtain delay from the creditors for six, nine and twelve months; and even to purchase a part of the stock on its account – which was done – and in clear violation of its charter (which forbids the institution to traffic in the stocks of the United States). This delay, with the insufficient and illegal reason given for it (for no reason could be legal or sufficient while admitting the money to be in her hands, and that which the bank gave related to the cholera, and the ever-ready excuse of accommodation to the public), could only be accounted for from an inability to produce the funds; in other words, that while her returns to the treasury admitted she had the money, the state of her vaults showed that she had it not. This view was further confirmed by her attempt to get a virtual loan to meet the payment, if delay could not be obtained, or the stock purchased, in the application to the London house of the Barings to draw upon it for the amount uncovered by delay or by purchase.

But the salient passage in the message – the one which gave it a new and broad emphasis in the public mind – was the part which related to the attitude of South Carolina. The proceedings of that State had now reached a point which commanded the attention of all America, and could not be overlooked in the President's message. Organized opposition, and forcible resistance to the laws, took their open form; and brought up the question of the governmental enforcement of these laws, or submission to their violation. The question made a crisis; and the President thus brought the subject before Congress:

"It is my painful duty to state, that, in one quarter of the United States, opposition to the revenue laws has risen to a height which threatens to thwart their execution, if not to endanger the integrity of the Union. Whatever obstructions may be thrown in the way of the judicial authorities of the general government, it is hoped they will be able, peaceably, to overcome them by the prudence of their own officers, and the patriotism of the people. But should this reasonable reliance on the moderation and good sense of all portions of our fellow-citizens be disappointed, it is believed that the laws themselves are fully adequate to the suppression of such attempts as may be immediately made. Should the exigency arise, rendering the execution of the existing laws impracticable, from any cause whatever, prompt notice of it will be given to Congress, with the suggestion of such views and measures as may be deemed necessary to meet it."

Nothing could be more temperate, subdued, and even conciliatory than the tone and language of this indispensable notice. The President could not avoid bringing the subject to the notice of Congress; and could not have done it in a more unexceptionable manner. His language was that of justice and mildness. The peaceful administration of the laws were still relied upon, and if any thing further became necessary he promised an immediate notice to Congress. In the mean time, and in a previous part of his message, he had shown his determination, so far as it depended on him, to remove all just complaint of the burthens of the tariff by effecting a reduction of many millions of the duties: – a dispensation permitted by the extinction of the public debt within the current year, and by the means already provided, and which would admit of an abolition of ten to twelve millions of dollars of duties.

CHAPTER LXXV.

BANK OF THE UNITED STATES – DELAY IN PAYING THE THREE PER CENTS – COMMITTEE OF INVESTIGATION

The President in his message had made two recommendations which concerned the bank – one that the seven millions of stock held therein by the United States should be sold; the other that a committee should be appointed to investigate its condition. On the question of referring the different parts of the message to appropriate committees. Mr. Speight, of North Carolina, moved that this latter clause be sent to a select committee to which Mr. Wayne, of Georgia, proposed an amendment, that the committee should have power to bring persons before them, and to examine them on oath, and to call upon the bank and its branches for papers. This motion gave rise to a contest similar to that of the preceding session on the same point, and by the same actors – and with the same result in favor of the bank – the debate being modified by some fresh and material incidents. Mr. Wickliffe, of Kentucky, had previously procured a call to be made on the Secretary of the Treasury for the report which his agent was employed in making upon the condition of the bank; and wished the motion for the committee to be deferred until that report came in. He said:

"He had every confidence, both from his own judgment and from information in his possession, that when the resolution he had offered should receive its answer, and the House should have the report of the agent sent by the Secretary of the Treasury to inquire into the affairs of the bank, with a view to ascertain whether it was a safe depository for the public funds, the answer would be favorable to the bank and to the entire security of the revenue. Mr. W. said he had hoped that the resolution he had offered would have superseded the necessity of another bank discussion in that House, and of the consequences upon the financial and commercial operations of the country, and upon the credit of our currency. He had not understood, from a hasty reading of the report of the Secretary of the Treasury, that that officer had expressed any desire for the appointment of any committee on the subject. The secretary said that he had taken steps to obtain such information as was within his control, but that it was possible he might need further powers hereafter. What had already been the effect throughout the country of the broadside discharged by the message at the bank? Its stock had, on the reception of that message, instantly fallen down to 104 per cent. Connected with this proposition to sell the stock, a loss had already been incurred by the government of half a million of dollars. What further investigations did gentlemen require? What new bill of indictment was to be presented? There was one in the secretary's report, which was also alluded to in the message: it was, that the bank had, by its unwaranted action, prevented the government from redeeming the three per cent. stock at the time it desired. But what was the actual state of the fact? What had the bank done to prevent such redemption? It had done nothing more nor less than what it had been required by the government to do."

The objection to inquiry, made by Mr. Wickliffe, that it depreciated the stock, and made a loss of the difference to its holders, was entirely fallacious, as fluctuations in the price of stocks are greatly under the control of those who gamble in them, and who seize every circumstance, alternately to depress and exalt them; and the fluctuations affect nobody but those who are buyers or sellers. Yet this objection was gravely resorted to every time that any movement was made which affected the bank; and arithmetical calculations were gravely gone into to show, upon each decline of the stock, how much money each stockholder had lost. On this occasion the loss of the United States was set down at half a million of dollars: – which was recovered four days afterwards upon the reading of the report of the treasury agent, favorable to the bank, and which enabled the dealers to put up the shares to 112 again. In the mean time nobody lost any thing but the gamblers; and that was nothing to the public, as the loss of one was the gain of the other: and the thing balanced itself. Holders for investment neither lost, nor gained. For the rest, Mr. Wayne, of Georgia, replied:

"It has been said that nothing was now before the House to make an inquiry into the condition of the bank desirable or necessary. He would refer to the President's message, and to the report of the Secretary of the Treasury, both suggesting an examination, to ascertain if the bank was, or would be in future, a safe depository for the public funds. Mr. W. did not say it was not, but an inquiry into the fact might be very proper notwithstanding; and the President and Secretary, in suggesting it, had imputed no suspicion of the insolvency of the bank. Eventual ability to discharge all of its obligations is not of itself enough to entitle the bank to the confidence of the government. Its management, and the spirit in which it is managed, in direct reference to the government, or to those administering it, may make investigation proper. What was the Executive's complaint against the bank? That it had interfered with the payment of the public debt, and would postpone the payment of five millions of it for a year after the time fixed upon for its redemption, by becoming actually or nominally the possessors of that amount of the three per centum stock, though the charter prohibited it from holding such stock, and from all advantages which might accrue from the purchase of it. True, the bank had disavowed the ownership. But of that sum which had been bought by Baring, Brothers, & Co., under the agreement with the agent of the bank, at ninety-one and a half, and the cost of which had been charged to the bank, who would derive the benefit of the difference between the cost of it and the par value, which the government will pay? Mr. W. knew this gain would be effected by what may be the rate of exchange between the United States and England, but still there would be gain, and who was to receive it? Baring, Brothers, & Co.? No. The bank was, by agreement, charged with the cost of it, in a separate account, on the books of Baring, Brothers, & Co., and it had agreed to pay interest upon the amount, until the stock was redeemed.

"The bank being prohibited to deal in such stock, it would be well to inquire, even under the present arrangements with Baring, Brothers, & Co., whether the charter, in this respect, was substantially complied with. Mr. W. would not now go into the question of the policy of the arrangement by the bank concerning the three per cents. It may eventuate in great public benefit, as regards the commerce of the country; but if it does, it will be no apology for the temerity of an interference with the fixed policy of the government, in regard to the payment of the national debt; a policy, which those who administer the bank knew had been fixed by all who, by law, can have any agency in its payment. Nor can any apology be found for it in the letter of the Secretary of the Treasury of the 19th of July last to Mr. Biddle; for, at Philadelphia, the day before, on the 18th, he employed an agent to go to England, and had given instructions to make an arrangement, by which the payment of the public debt was to be postponed until October, 1833."

Mr. Watmough, representative from the district in which the bank was situated, disclaimed any intention to thwart any course which the House was disposed to take; but said that the charges against the bank had painfully affected the feelings of honorable men connected with the corporation, and injured its character; and deprecated the appointment of a select committee; and proposed the Committee of Ways and Means – the same which had twice reported in favor of the bank: – and he had no objection that this committee should be clothed with all the powers proposed by Mr. Wayne to be conferred upon the select committee. In this state of the question the report of the treasury agent came in, and deserves to be remembered in contrast with the actual condition of the bank as afterwards discovered, and as a specimen of the imposing exhibit of its affairs which a moneyed corporation can make when actually insolvent. The report, founded on the statements furnished by the institution itself, presented a superb condition – near eighty millions of assets (to be precise, $79,593,870), to meet all demands against it, amounting to thirty-seven millions and a quarter – leaving forty-two millions and a quarter for the stockholders; of which thirty-five millions would reimburse the stock, and seven and a quarter millions remain for dividend. Mr. Polk stated that this report was a mere compendium of the monthly bank returns, showing nothing which these returns did not show; and especially nothing of the eight millions of unavailable funds which had been ascertained to exist, and which had been accumulating for eighteen years. On the point of the non-payment of the three per cents, he said:

"The Secretary of the Treasury had given public notice that the whole amount of the three per cents would be paid off on the first of July. The bank was apprised of this arrangement, and on its application the treasury department consented to suspend the redemption of one third of this stock until the first of October, the bank paying the interest in the mean while. But, if the condition of the bank was so very prosperous, as has been represented, why did it make so great a sacrifice as to pay interest on that large amount for three months, for the sake of deferring the payment? The Secretary of the Treasury, on the 19th July, determined that two thirds of the stock should be paid off on the first of October; and, on the 18th of July what did the bank do? It dispatched an agent to London, without the knowledge of the treasury, and for what? In effect, to borrow 5,000,000 dollars, for that was the amount of the transaction. From this fact Mr. P. inferred that the bank was unable to go on without the public deposits. They then made a communication to the treasury, stating that the bank would hold up such certificates as it could control, to suit the convenience of the government; but was it on this account that they sent their agent to London? Did the president of the bank himself assign this reason? No; he gave a very different account of the matter; he said that the bank apprehended that the spread of the cholera might produce great distress in the country, and that the bank wished to hold itself in an attitude to meet the public exigencies, and that with this view an agent was sent to make an arrangement with the Barings for withholding three millions of the stock."

The motion of Mr. Watmough to refer the inquiry to the Committee of Ways and Means, was carried; and that committee soon reported: first, on the point of postponing the payment of a part of the three per cents, that the business being now closed by the actual payment of that stock, it no longer presented any important or practicable point of inquiry, and did not call for any action of Congress upon it; and, secondly, on the point of the safety of the public deposits, that there could be no doubt of the entire soundness of the whole bank capital, after meeting all demands upon it, either by its bill holders or the government; and that such was the opinion of the committee, who felt great confidence in the well-known character and intelligence of the directors, whose testimony supported the facts on which the committee's opinion rested. And they concluded with a resolve which they recommended to the adoption of the House, "That the government deposits may, in the opinion of the House, be safely continued in the Bank of the United States." Mr. Polk, one of the committee, dissented from the report, and argued thus against it:

"He hoped that gentlemen who believed the time of the House, at this period of the session, to be necessarily valuable, would not press the consideration of this resolution upon the House at this juncture. During the small remainder of the session, there were several measures of the highest public importance which remained to be acted on. For one, he was extremely anxious that the session should close by 12 o'clock to-night, in order that a sitting upon the Sabbath might be avoided. He would not proceed in expressing his views until he should understand from gentlemen whether they intended to press the House to a vote upon this resolution. [A remark was made by Mr. Ingersoll, which was not heard distinctly by the reporter.] Mr. P. proceeded. As it had been indicated that gentlemen intended to take a vote upon the resolution, he would ask whether it was possible for the members of the House to express their opinions on this subject with an adequate knowledge of the facts. The Committee of Ways and Means had spent nearly the whole session in the examination of one or two points connected with this subject. The range of investigation had been, of necessity, much less extensive than the deep importance of the subject required; but, before any opinion could be properly expressed, it was important that the facts developed by the committee should be understood. There had been no opportunity for this, and there was no necessity for the expression of a premature opinion unless it was considered essential to whitewash the bank. If the friends of the bank deemed it indispensably necessary, in order to sustain the bank, to call for an expression of opinion, where the House had enjoyed no opportunity of examining the testimony and proof upon which alone a correct opinion could be formed, he should be compelled, briefly, to present one or two facts to the House. It had been one of the objects of the Committee of Ways and Means to ascertain the circumstances relative to the postponement of the redemption of the three per cent. stock by the bank. With the mass of other important duties devolving upon the committee, as full an investigation of the condition of the bank as was desirable could not be expected. The committee, therefore, had been obliged to limit their inquiries to this subject of the three per cents; the other subjects of investigation were only incidental. Upon this main subject of inquiry the whole committee, majority as well as minority, were of opinion that the bank had exceeded its legitimate authority, and had taken measures which were in direct violation of its charter. He would read a single sentence from the report of the majority, which conclusively established this position. In the transactions upon this subject, the majority of the committee expressly say, in their report, that 'the bank exceeded its legitimate authority, and that this proceeding had no sufficient warrant in the correspondence of the Secretary of the Treasury.' Could language be more explicit? It was then the unanimous opinion of the committee, upon this main topic of inquiry, that the bank had exceeded its legitimate authority, and that its proceedings relative to the three per cents had no sufficient warrant in the correspondence of the Secretary of the Treasury. The Bank of the United States, it must be remembered, had been made the place of deposit for the public revenues, for the purpose of meeting the expenditures of the government. With the public money in its vaults, it was bound to pay the demands of the government. Among these demands upon the public money in the bank, was that portion of the public debt of which the redemption had been ordered. Had the bank manifested a willingness to pay out the public money in its possession for this object? On examination of the evidence it would be found that, as early as March, 1832, the president of the bank, without the knowledge of the government directors, had instituted a correspondence with certain holders of the public debt, for the purpose of procuring a postponement of its redemption. There was, at that time, no cholera, which could be charged with giving occasion to the correspondence. When public notice had been given by the Secretary of the Treasury of the redemption of the debt, the president of the bank immediately came to Washington, and requested that the redemption might be postponed. And what was the reason then assigned by the president of the bank for this postponement? Why, that the measure would enable the bank to afford the merchants great facilities for the transaction of their business under an extraordinary pressure upon the money market. What was the evidence upon this point? The proof distinctly showed that there was no extraordinary pressure. The monthly statements of the bank established that there was, in fact, a very considerable curtailment of the facilities given to the merchants in the commercial cities.