Thirty Years' View (Vol. I of 2)

The four gentlemen then state their opinions of their rights, and their duties, as government directors – that they were devised as instruments for the attainment of public objects – that they were public directors, not elected by stockholders, but appointed by the President and Senate – that their duties were not merely to represent a moneyed interest and promote the largest dividend for stockholders, but also to guard all the public and political interest of the government in an institution so largely sharing its support and so deeply interested in its safe and honorable management. And in support of this opinion of their duties they quoted the authority of Gen. Hamilton, founder of the first bank of the United States; and that of Mr. Alexander Dallas, founder of the second and present bank; showing that each of them, and at the time of establishing the two banks respectively, considered the government directors as public officers, bound to watch over the operations of the bank, to oppose all malpractices, and to report them to the government whenever they occurred. And they thus quoted the opinions of those two gentlemen:

"In the celebrated report of Alexander Hamilton, in 1790, that eminent statesman and financier, although then impressed with a persuasion that the government of the country might well leave the management of a national bank to 'the keen, steady, and, as it were, magnetic sense of their own interest,' existing among the private stockholders, yet holds the following remarkable and pregnant language: 'If the paper of a bank is permitted to insinuate itself into all the revenues and receipts of a country; if it is even to be tolerated as the substitute for gold and silver, in all the transactions of business; it becomes, in either view, a national concern of the first magnitude. As such, the ordinary rules of prudence require that the government should possess the means of ascertaining, whenever it thinks fit, that so delicate a trust is executed with fidelity and care. A right of this nature is not only desirable, as it respects the government, but it ought to be equally so to all those concerned in the institution, as an additional title to public and private confidence, and as a thing which can only be formidable to practices that imply mismanagement.'

"In the letter addressed by Alexander James Dallas, the author of the existing bank, to the chairman of the committee on a national currency, in 1815, the sentiments of that truly distinguished and patriotic statesman are explicitly conveyed upon this very point. 'Nor can it be doubted,' he remarks, 'that the department of the government which is invested with the power of appointment to all the important offices of the State, is a proper department to exercise the power of appointment in relation to a national trust of incalculable magnitude. The national bank ought not to be regarded simply as a commercial bank. It will not operate on the funds of the stockholders alone, but much more on the funds of the nation. Its conduct, good or bad, will not affect the corporate credit and resources alone, but much more the credit and resources of the government. In fine, it is not an institution created for the purposes of commerce and profit alone, but much more for the purposes of national policy, as an auxiliary in the exercise of some of the highest powers of the government. Under such circumstances, the public interests cannot be too cautiously guarded, and the guards proposed can never be injurious to the commercial interests of the institution. The right to inspect the general accounts of the bank, may be employed to detect the evils of a mal-administration, but an interior agency in the direction of its affairs will best serve to prevent them.' This last sentence, extracted from the able document of Secretary Dallas, developes at a glance what had been the experience of the American government and people, in the period which elapsed between the time of Alexander Hamilton and that immediately preceding the formation of the present bank. Hamilton conceived that 'a right to inspect the general accounts of the bank,' would enable government 'to detect the evils of a mal-administration,' and their detection he thought sufficient. He was mistaken: at least so thought Congress and their constituents, in 1815. Hence the inflexible spirit which prevailed at the organization of a new bank, in establishing 'an interior agency in the direction of its affairs,' by the appointment of public officers, through whom the evils of a mal-administration might be carefully watched and prevented."

The four gentlemen also showed, in their memorial, that when the bill for the charter of the present bank was under consideration in the Senate, a motion was made to strike out the clause authorizing the appointment of the government directors; and that that motion was resisted, and successfully, upon the ground that they were to be the guardians of the public interests, and to secure a just and honorable administration of the affairs of the bank; that they were not mere bank directors, but government officers, bound to watch over the rights and interests of the government, and to secure a safe and honest management of an institution which bore the name of the United States – was created by it – and in which the United States had so much at stake in its stock, in its deposits, in its circulation, and in the safety of the community which put their faith in it. Having vindicated the official quality of their characters, and shown their duty as well as their right to inform the government of all mal-practices, they entered upon an examination of the information actually given, showing the truth of all that was communicated, and declaring it to be susceptible of proof, by the inspection of the books of the institution, and by an examination of its directors and clerks.

"We confidently assert that there is in it no statement or charge that can be invalidated; that every one is substantiated by the books and records of the bank; that no real error has been pointed out in this elaborate attack upon us by the majority. It is by suppressing facts well known to them, by misrepresenting what we say, by drawing unjust and unfair inferences from particular sentences, by selecting insulated phrases, and by exhibiting partial statements; by making unfounded insinuations, and by unworthily impeaching our motives, that they endeavor to controvert that which they are unable to refute. When the expense account shall be truly and fully exhibited to any tribunal, if it shall be found that the charges we have stated do not exist; when the minutes of the board shall be laid open, if it shall be found the resolutions we have quoted are not recorded; we shall acknowledge that we have been guilty of injustice and of error, but not till then.

"We have thus endeavored to present to the assembled representatives of the American people, a view of the course which, for nearly a year, the majority in a large moneyed institution, established by them for their benefit, have thought proper to pursue towards those who have been placed there, to guard their interests and to watch and control their conduct. We have briefly stated the systematic series of actions by which they have endeavored to deprive them of every right that was conferred on them by the charter, and to assume to themselves a secret, irresponsible, and unlimited power. We have shown that, in endeavoring to vindicate or to save themselves, they have resorted to accusations against us, which they are unable to sustain, and left unanswered charges which, were they not true, it would be easy to repel. We have been urged to this from no desire to enter into the lists with an adversary sustained by all the resources which boundless wealth affords. We have been driven to it by the nature and manner of the attack made upon us, in the document on which the intended memorial to Congress is founded."

But all their representations were in vain. Their nominations were immediately rejected, a second time, and the seal of secrecy preserved inviolate upon the reasons of the rejection. The "proceedings" of the Senate were allowed to be published; that is to say, the acts of the Senate, as a body, such as its motions, votes, reports, &c., but nothing of what was said pending the nominations. A motion was made by Mr. Wright to authorize the publication of the debates, which was voted down; and so differently from what was done in the case of Mr. Van Buren. In that case, the debates on the nomination were published; the reasons for the rejection were shown; and the public were enabled to judge of their validity. In this case no publication of debates was allowed; the report presented by Mr. Tyler gave no hint of the reasons for the rejection; and the act remained where that report put it – on the absolute right to reject, without the exhibition of any reason.

And thus the nomination of the government directors was rejected by the United States Senate, not for the declared, but for the known reason of reporting the misconduct of the bank to the President, and especially as it related to the appointment and the conduct of the exchange committee. A few years afterwards a committee of the stockholders, called the "Committee of Investigation," made a report upon the conduct and condition of the bank, in which this exchange committee is thus spoken of: "The mode in which the committee of exchange transacted their business, shows that there really existed no check whatever upon the officers, and that the funds of the bank were almost entirely at their disposition. That committee met daily, and were attended by the cashier, and at times, by the president. They exercised the power of making the loans and settlements, to full as great an extent as the board itself. They kept no minutes of their proceedings – no book in which the loans made, and business done, were entered; but their decisions and directions were given verbally to the officers, to be by them carried into execution. The established course of business seems to have been, for the first teller to pay on presentation at the counter, all checks, notes, or due bills having indorsed the order, or the initials, of one of the cashiers, and to place these as vouchers in his drawer, for so much cash, where they remained, until just before the regular periodical counting of the cash by the standing committee of the board on the state of the bank. These vouchers were then taken out, and entered as 'bills receivable,' in a small memorandum-book, under the charge of one of the clerks. These bills were not discounted, but bore interest semi-annually, and were secured by a pledge of stock, or some other kind of property. It is evidently impossible under such circumstances, to ascertain or be assured, in regard to any particular loan or settlement, that it was authorized by a majority of the exchange committee. It can be said, however, with entire certainty, that the very large business transacted in this way does not appear upon the face of the discount books – was never submitted to the examination of the members of the board at its regular meetings, nor is any where entered on the minutes as having been reported to that body for their information or approbation."

CHAPTER XCVI.

SECRETARY'S REPORT ON THE REMOVAL OF THE DEPOSITS

In the first days of the session Mr. Clay called the attention of the Senate to the report of the Secretary of the Treasury, communicating the fact that he had ordered the public deposits to cease to be made in the Bank of the United States, and giving his reasons for that act, and said:

"When Congress, at the time of the passage of the charter of the bank, made it necessary that these reasons should be submitted, they must have had some purpose in their mind. It must have been intended that Congress should look into these reasons, determine as to their validity; and approve or disapprove them, as might be thought proper. The reasons had now been submitted, and it was the duty of Congress to decide whether or not they were sufficient to justify the act. If there was a subject which, more than any other, seemed to require the prompt action of Congress, it certainly was that which had reference to the custody and care of the public treasury. The Senate, therefore, could not, at too early a period, enter on the question – what was the actual condition of the treasury?

"It was not his purpose to go into a discussion, but he had risen to state that it appeared to him to be his duty as a senator, and he hoped that other senators took similar views of their duty, to look into this subject, and to see what was to be done. As the report of the Secretary of the Treasury had declared the reasons which had led to the removal of the public deposits, and as the Senate had to judge whether, on investigation of these reasons, the act was a wise one or not, he considered that it would not be right to refer the subject to any committee, but that the Senate should at once act on it, not taking it up in the form of a report of a committee, but going into an examination of the reasons as they had been submitted."

Mr. Benton saw two objections to proceeding as Mr. Clay proposed – one, as to the form of his proposition – the other, as to the place in which it was made. The report of the Secretary, charging acts of misconduct as a cause of removal, would require an investigation into their truth. The House of Representatives being the grand inquest of the nation, and properly chargeable with all inquiries into abuses, would be the proper place for the consideration of the Secretary's report – though he admitted that the Senate could also make the inquiry if it pleased; but should do it in the proper way, namely, by inquiring into the truth of the allegations against the bank. He said:

"He requested the Senate to bear in mind that the Secretary had announced, among other reasons which he had assigned for the removal of the deposits, that it had been caused by the misconduct of the bank, and he had gone into a variety of specifications, charging the bank with interfering with the liberties of the people in their most vital elements – the liberty of the press, and the purity of elections. The Secretary had also charged the bank with dishonoring its own paper on several occasions, and that it became necessary to compel it to receive paper of its own branches. Here, then, were grave charges of misconduct, and he wished to know whether, in the face of such charges, this Congress was to go at once, without the previous examination of a committee, into action upon the subject?

"He desired to know whether the Senate were now about to proceed to the consideration of this report as it stood, and, without receiving any evidence of the charges, or taking any course to establish their truth, to give back the money to this institution? He thought it would be only becoming in the bank itself to ask for a committee of scrutiny into its conduct, and that the subject ought to be taken up by the House of Representatives, which, on account of its numbers, its character as the popular branch, and the fact that all money bills originated there, was the most proper tribunal for the hearing of this case. He did not mean to deny that the Senate had the power to go into the examination. But to fix a day now for the decision of so important a case, he considered as premature. Were the whole of the charges to be blown out of the paper by the breath of the Senate? Were they to decide on the question, each senator sitting there as witness and juror in the case? He did not wish to stand there in the character of a witness, unless he was to be examined on oath either at the bar of the Senate, or before a committee of that body, where the evidence would be taken down. He wished to know the manner in which the examination was to be conducted; for he regarded this motion as an admission of the truth of every charge which had been made in the report, and as a flight from investigation."

Mr. Clay then submitted two resolutions in relation to the subject, the second of which after debate, was referred to the committee on finance. They were in these words:

"1st. That, by dismissing the late Secretary of the Treasury, because he would not, contrary to his sense of his own duty, remove the money of the United States in deposit with the Bank of the United States and its branches, in conformity with the President's opinion, and by appointing his successor to effect such removal, which has been done, the President has assumed the exercise of a power over the Treasury of the United States, not granted to him by the constitution and laws, and dangerous to the liberties of the people.

"2d. That the reasons assigned by the Secretary of the Treasury for the removal of the money of the United States deposited in the Bank of the United States and its branches, communicated to Congress on the 3d day of December, 1833, are unsatisfactory and insufficient."

The order for the reference to the finance committee was made in the Senate at four o'clock in the afternoon of one day; and the report upon it was made at noon the next day; a very elaborate argumentative paper, the reading of which by its reporter (Mr. Webster) consumed one hour and a quarter of time. It recommended the adoption of the resolution; and 6000 copies of the report were ordered to be printed. Mr. Forsyth, of Georgia, complimented the committee on their activity in getting out a report of such length and labor, in so short a time, and in the time usually given to the refreshment of dinner and sleep. He said:

"Certainly great credit was due to the committee on finance for the zeal, ability, and industry with which the report had been brought out. He thought the reference was made yesterday at four o'clock; and the committee could hardly have had time to agree on and write out so long a report in the short space of time intervening since then. It was possible that the subject might have been discussed and well understood in the committee before, and that the chairman had time to embody the sentiments of the various members of the committee previous to the reference. If such was the case, it reminded him of what had once happened in one of the courts of justice of the State of Georgia. A grave question of constitutional law was presented before that court, was argued for days with great ability, and when the argument was concluded, the judge drew from his coat pocket a written opinion, which he read, and ordered to be recorded as the opinion of the court. It appeared, therefore, that unless the senator from Massachusetts carried the opinion of the committee in his coat pocket, he could not have presented his report with the unexampled dispatch that had been witnessed."

Mr. Webster, evidently nettled at the sarcastic compliment of Mr. Forsyth, replied to him in a way to show his irritated feelings, but without showing how he came to do so much work in so short a time. He said:

"Had the gentleman come to the Senate this morning in his usual good humor, he would have been easily satisfied on that point. He will recollect that the subject now under discussion was deemed, by every body, to be peculiarly fitted for the consideration of the committee on finance; and that, three weeks ago, I had intimated my intention of moving for such a reference. I had, however, delayed the motion, from considerations of courtesy to other gentlemen, on all sides. But the general subject of the removal of the deposits, had been referred to the committee on finance, by reference of that part of the President's message; and various memorials, in relation to it, had also been referred. The subject has undergone an ample discussion in committee. I had been more than once instructed by the committee to move for the reference of the Secretary's letter, but the motion was postponed, from time to time, for the reasons I have before given. Had the gentleman from Georgia been in the Senate yesterday, he would have known that this particular mode of proceeding was adopted, as was then well understood, for the sole purpose of facilitating the business of the Senate, and of giving the committee an opportunity to express an opinion, the result of their consideration. If the gentleman had heard what had passed yesterday, when the reference was made, he would not have expressed surprise."

The fact was the report had been drawn by the counsel for the bank, and differed in no way in substance, and but little in form, from the report which the bank committee had made on the paper, "purporting to have been signed by Andrew Jackson, and read to what was called a cabinet." But the substance of the resolution (No. 2, of Mr. Clay's), gave rise to more serious objections than the marvellous activity of the committee in reporting upon it with the elaboration and rapidity with which they had done. It was an empty and inoperative expression of opinion, that the Secretary's reasons were "unsatisfactory and insufficient;" without any proposition to do any thing in consequence of that dissatisfaction and insufficiency; and, consequently, of no legislative avail, and of no import except to bring the opinion of senators, thus imposingly pronounced, against the act of the Secretary. The resolve was not practical – was not legislative – was not in conformity to any mode of doing business – and led to no action; – neither to a restoration of the deposits nor to a condemnation of their keeping by the State banks. Certainly the charter, in ordering the Secretary to report, and to report at the first practicable moment, both the fact of a removal, and the reasons for it, was to enable Congress to act – to do something – to legislate upon the subject – to judge the validity of the reasons – and to order a restoration if they were found to be untrue or insufficient; or to condemn the new place of deposit, if it was deemed insecure or improper. All this was too obvious to escape the attention of the democratic members who inveighed against the futility and irrelevance of the resolve, unfit for a legislative body, and only suitable for a town meeting; and answering no purpose as a senatorial resolve but that of political effect against public men. On this point Mr. Forsyth said:

"The subject had then been taken out of the hands of the Senate, and sent to the committee on finance; and for what purpose was it sent thither? Did any one doubt what would be the opinion of the committee on finance? Would such a movement have been made, had it not been intended thereby to give strength to the course of the opposition? He was not in the Senate when the reference was yesterday made, but he had supposed that it was made for the purpose of some report in a legislative form, but it has come back with an argument, and a recommendation of the adoption of the resolution of the senator from Kentucky; and when the resolutions were adopted, would they not still be sent back to that committee for examination? Why had not the committee, who seemed to know so well what would be the opinion of the Senate, imbodied that opinion in a legislative form?"

To the same effect spoke many members, and among others, Mr. Silas Wright, of New-York, who said:

"He took occasion to say, that with regard to the reference made yesterday, he was not so unfortunate as his friend from Georgia, to be absent at the time, and he then, while the motion was pending, expressed his opinion that a reference at four o'clock in the afternoon, to be returned with a report at twelve the next day, would materially change the aspect of the case before the Senate. He was also of opinion, that the natural effect of sending this proposition to the committee on finance would be, to have it returned with a recommendation for some legislative action. In this, however, he had been disappointed, the proposition had been brought back to the Senate in the same form as sent to the committee, with the exception of the very able argument read that morning."

Mr. Webster felt himself called upon to answer these objections, and did so in a way to intimate that the committee were not "green" enough, – that is to say, were too wise – to propose any legislative action on the part of Congress in relation to this removal. He said:

"There is another thing, sir, to which the gentleman has objected. He would have preferred that some legislative recommendation should have accompanied the report – that some law, or joint resolution, should have been recommended. Sir, do we not see what the gentleman probably desires? If not, we must be green politicians. It was not my intention, at this stage of the business, to propose any law, or joint resolution. I do not, at present, know the opinions of the committee on this subject. On this question, at least, to use the gentleman's expression, I do not carry their opinions in my coat pocket. The question, when it arrives, will be a very grave one – one of deep and solemn import – and when the proper time for its discussion arrives, the gentleman from Georgia will have an opportunity to examine it. The first thing is, to ascertain the judgment of the Senate, on the Secretary's reasons for his act."