Part 2

But in the conduct of the bank may be found other reasons, very imperative in their character, and which require prompt action. Developments have been made from time to time of its faithlessness as a public agent, its misapplication of public funds, its interference in elections, its efforts by the machinery of committees to deprive the Government directors of a full knowledge of its concerns, and, above all, its flagrant misconduct as recently and unexpectedly disclosed in placing all the funds of the bank, including the money of the Government, at the disposition of the president of the bank as means of operating upon public opinion and procuring a new charter, without requiring him to render a voucher for their disbursement. A brief recapitulation of the facts which justify these charges, and which have come to the knowledge of the public and the President, will, he thinks, remove every reasonable doubt as to the course which it is now the duty of the President to pursue.

We have seen that in sixteen months ending in May, 1832, the bank had extended its loans more than $28,000,000, although it knew the Government intended to appropriate most of its large deposit during that year in payment of the public debt. It was in May, 1832, that its loans arrived at the maximum, and in the preceding March so sensible was the bank that it would not be able to pay over the public deposit when it would be required by the Government that it commenced a secret negotiation, without the approbation or knowledge of the Government, with the agents for about $2,700,000 of the 3 per cent stocks held in Holland, with a view of inducing them not to come forward for payment for one or more years after notice should be given by the Treasury Department. This arrangement would have enabled the bank to keep and use during time the public money set apart for the payment of these stocks. After this negotiation had commenced, the Secretary of the Treasury informed the bank that it was his intention to pay off one-half of the 3 percents on the 1st of the succeeding July, which amounted to about $6,500,000. The president of the bank, although the committee of investigation was then looking into its affairs at Philadelphia, came immediately to Washington, and upon representing that the bank was desirous of accommodating the importing merchants at New York (which it failed to do) and undertaking to pay the interest itself, procured the consent of the Secretary, after consultation with the President, to postpone the payment until the succeeding 1st of October.

Conscious that at the end of that quarter the bank would not be able to pay over the deposits, and that further indulgence was not to be expected of the Government, an agent was dispatched to England secretly to negotiate with the holders of the public debt in Europe and induce them by the offer of an equal or higher interest than that paid by the Government to hold back their claims for one year, during which the bank expected thus to retain the use of $5,000,000 of the public money, which the Government should set apart for the payment of that debt. The agent made an arrangement on terms, in part, which were in direct violation of the charter of the bank, and when some incidents connected with this secret negotiation accidentally came to the knowledge of the public and the Government, then, and not before, so much of it as was palpably in violation of the charter was disavowed. A modification of the rest was attempted with the view of getting the certificates without payment of the money, and thus absolving the Government from its liability to the holders. In this scheme the bank was partially successful, but to this day the certificates of a portion of these stocks have not been paid and the bank retains the use of the money.

This effort to thwart the Government in the payment of the public debt that it might retain the public money to be used for their private interests, palliated by pretenses notoriously unfounded and insincere, would have justified the instant withdrawal of the public deposits. The negotiation itself rendered doubtful the ability of the bank to meet the demands of the Treasury, and the misrepresentations by which it was attempted to be justified proved that no reliance could be placed upon its allegations.

If the question of a removal of the deposits presented itself to the Executive in the same attitude that it appeared before the House of Representatives at their last session, their resolution in relation to the safety of the deposits would be entitled to more weight, although the decision of the question of removal has been confided by law to another department of the Government. But the question now occurs attended by other circumstances and new disclosures of the most serious import. It is true that in the message of the President which produced this inquiry and resolution on the part of the House of Representatives it was his object to obtain the aid of that body in making a thorough examination into the conduct and condition of the bank and its branches in order to enable the executive department to decide whether the public money was longer safe in its hands. The limited power of the Secretary of the Treasury over the subject disabled him from making the investigation as fully and satisfactorily as it could be done by a committee of the House of Representatives, and hence the President desired the assistance of Congress to obtain for the Treasury Department a full knowledge of all the facts which were necessary to guide his judgment. But it was not his purpose, as the language of his message will show, to ask the representatives of the people to assume a responsibility which did not belong to them and relieve the executive branch of the Government from the duty which the law had imposed upon it. It is due to the President that his object in that proceeding should be distinctly understood, and that he should acquit himself of all suspicion of seeking to escape from the performance of his own duties or of desiring to interpose another body between himself and the people in order to avoid a measure which he is called upon to meet. But although as an act of justice to himself he disclaims any design of soliciting the opinion of the House of Representatives in relation to his own duties in order to shelter himself from responsibility under the sanction of their counsel, yet he is at all times ready to listen to the suggestions of the representatives of the people, whether given voluntarily or upon solicitation, and to consider them with the profound respect to which all will admit that they are justly entitled. Whatever may be the consequences, however, to himself, he must finally form his own judgment where the Constitution and the law make it his duty to decide, and must act accordingly; and he is bound to suppose that such a course on his part will never be regarded by that elevated body as a mark of disrespect to itself, but that they will, on the contrary, esteem it the strongest evidence he can give of his fixed resolution conscientiously to discharge his duty to them and the country.

A new state of things has, however, arisen since the close of the last session of Congress, and evidence has since been laid before the President which he is persuaded would have led the House of Representatives to a different conclusion if it had come to their knowledge. The fact that the bank controls, and in some cases substantially _owns_, and by its money _supports_ some of the leading presses of the country is now more clearly established. Editors to whom it loaned extravagant sums in 1831 and 1832, on unusual time and nominal security, have since turned out to be insolvent, and to others apparently in no better condition accommodations still more extravagant, on terms more unusual, and some without any security, have also been heedlessly granted.

The allegation which has so often circulated through these channels that the Treasury was bankrupt and the bank was sustaining it, when for many years there has not been less, on an average, than six millions of public money in that institution, might be passed over as a harmless misrepresentation; but when it is attempted by substantial acts to impair the credit of the Government and tarnish the honor of the country, such charges require more serious attention. With six millions of public money in its vaults, after having had the use of from five to twelve millions for nine years without interest, it became the purchaser of a bill drawn by our Government on that of France for about $900,000, being the first installment of the French indemnity. The purchase money was left in the use of the bank, being simply added to the Treasury deposit. The bank sold the bill in England, and the holder sent it to France for collection, and arrangements not having been made by the French Government for its payment, it was taken up by the agents of the bank in Paris with the funds of the bank in their hands. Under these circumstances it has through its organs openly assailed the credit of the Government, and has actually made and persists in a demand of 15 per cent, or $158,842.77, as damages, when no damage, or none beyond some trifling expense, has in fact been sustained, and when the bank had in its own possession on deposit several millions of the public money which it was then using for its own profit. Is a fiscal agent of the Government which thus seeks to enrich itself at the expense of the public worthy of further trust?

There are other important facts not in the contemplation of the House of Representatives or not known to the members at the time they voted for the resolution.

Although the charter and the rules of the bank both declare that "not less than seven directors" shall be necessary to the transaction of business, yet the most important business, even that of granting discounts to any extent, is intrusted to a committee of five members, who do not report to the board.

To cut off all means of communication with the Government in relation to its most important acts at the commencement of the present year, not one of the Government directors was placed on any one committee; and although since, by an unusual remodeling of those bodies, some of those directors have been placed on some of the committees, they are yet entirely excluded from the committee of exchange, through which the greatest and most objectionable loans have been made.

When the Government directors made an effort to bring back the business of the bank to the board in obedience to the charter and the existing regulations, the board not only overruled their attempt, but altered the rule so as to make it conform to the practice, in direct violation of one of the most important provisions of the charter which gave them existence.

It has long been known that the president of the bank, by his single will, originates and executes many of the most important measures connected with the management and credit of the bank, and that the committee as well as the board of directors are left in entire ignorance of many acts done and correspondence carried on in their names, and apparently under their authority. The fact has been recently disclosed that an unlimited discretion has been and is now vested in the president of the bank to expend its funds in payment for preparing and circulating articles and purchasing pamphlets and newspapers, calculated by their contents to operate on elections and secure a renewal of its charter. It appears from the official report of the public directors that on the 30th November, 1830, the president submitted to the board an article published in the American Quarterly Review containing favorable notices of the bank, and suggested the expediency of giving it a wider circulation at the expense of the bank; whereupon the board passed the following resolution, viz:

_Resolved_, That the president be authorized to take such measures in regard to the circulation of the contents of the said article, either in whole or in part, as he may deem most for the interest of the bank.

By an entry in the minutes of the bank dated March 11, 1831, it appears that the president had not only caused a large edition of that article to be issued, but had also, before the resolution of 30th November was adopted, procured to be printed and widely circulated numerous copies of the reports of General Smith and Mr. McDuffie in favor of the bank; and on that day he suggested the expediency of extending his power to the printing of other articles which might subserve the purposes of the institution, whereupon the following resolution was adopted, viz--

_Resolved_, That the president is hereby authorized to cause to be prepared and circulated such documents and papers as may communicate to the people information in regard to the nature and operations of the bank.

The expenditures purporting to have been made under authority of these resolutions during the years 1831 and 1832 were about $80,000. For a portion of these expenditures vouchers were rendered, from which it appears that they were incurred in the purchase of some hundred thousand copies of newspapers, reports and speeches made in Congress, reviews of the veto message and reviews of speeches against the bank, etc. For another large portion no vouchers whatever were rendered, but the various sums were paid on orders of the president of the bank, making reference to the resolution of the 11th of March, 1831.

On ascertaining these facts and perceiving that expenditures of a similar character were still continued, the Government directors a few weeks ago offered a resolution in the board calling for a specific account of these expenditures, showing the objects to which they had been applied and the persons to whom the money had been paid. This reasonable proposition was voted down.

They also offered a resolution rescinding the resolutions of November, 1830, and March, 1831. This also was rejected.

Not content with thus refusing to recall the obnoxious power or even to require such an account of the expenditure as would show whether the money of the bank had in fact been applied to the objects contemplated by these resolutions, as obnoxious as they were, the board renewed the power already conferred, and even enjoined renewed attention to its exercise by adopting the following in lieu of the propositions submitted by the Government directors, viz:

_Resolved_, That the board have confidence in the wisdom and integrity of the president and in the propriety of the resolutions of 30th November, 1830, and 11th March, 1831, and entertain a full conviction of the necessity of a renewed attention to the object of those resolutions, and that the president be authorized and requested to continue his exertions for the promotion of said object.

Taken in connection with the nature of the expenditures heretofore made, as recently disclosed, which the board not only tolerate, but approve, this resolution puts the funds of the bank at the disposition of the president for the purpose of employing the whole press of the country in the service of the bank, to hire writers and newspapers, and to pay out such sums as he pleases to what person and for what services he pleases without the responsibility of rendering any specific account. The bank is thus converted into a vast electioneering engine, with means to embroil the country in deadly feuds, and, under cover of expenditures in themselves improper, extend its corruption through all the ramifications of society.

Some of the items for which accounts have been rendered show the construction which has been given to the resolutions and the way in which the power it confers has been exerted. The money has not been expended merely in the publication and distribution of speeches, reports of committees, or articles written for the purpose of showing the constitutionality or usefulness of the bank, but publications have been prepared and extensively circulated containing the grossest invectives against the officers of the Government, and the money which belongs to the stockholders and to the public has been freely applied in efforts to degrade in public estimation those who were supposed to be instrumental in resisting the wishes of this grasping and dangerous institution. As the president of the bank has not been required to settle his accounts, no one but himself knows how much more than the sum already mentioned may have been squandered, and for which a credit may hereafter be claimed in his account under this most extraordinary resolution. With these facts before us can we be surprised at the torrent of abuse incessantly poured out against all who are supposed to stand in the way of the cupidity or ambition of the Bank of the United States? Can we be surprised at sudden and unexpected changes of opinion in favor of an institution which has millions to lavish and avows its determination not to spare its means when they are necessary to accomplish its purposes? The refusal to render an account of the manner in which a part of the money expended has been applied gives just cause for the suspicion that it has been used for purposes which it is not deemed prudent to expose to the eyes of an intelligent and virtuous people. Those who act justly do not shun the light, nor do they refuse explanations when the propriety of their conduct is brought into question.

With these facts before him in an official report from the Government directors, the President would feel that he was not only responsible for all the abuses and corruptions the bank has committed or may commit, but almost an accomplice in a conspiracy against that Government which he has sworn honestly to administer, if he did not take every step within his constitutional and legal power likely to be efficient in putting an end to these enormities. If it be possible within the scope of human affairs to find a reason for removing the Government deposits and leaving the bank to its own resource for the means of effecting its criminal designs, we have it here. Was it expected when the moneys of the United States were directed to be placed in that bank that they would be put under the control of one man empowered to spend millions without rendering a voucher or specifying the object? Can they be considered safe with the evidence before us that tens of thousands have been spent for highly improper, if not corrupt, purposes, and that the same motive may lead to the expenditure of hundreds of thousands, and even millions, more? And can we justify ourselves to the people by longer lending to it the money and power of the Government to be employed for such purposes?

It has been alleged by some as an objection to the removal of the deposits that the bank has the power, and in that event will have the disposition, to destroy the State banks employed by the Government, and bring distress upon the country. It has been the fortune of the President to encounter dangers which were represented as equally alarming, and he has seen them vanish before resolution and energy. Pictures equally appalling were paraded before him when this bank came to demand a new charter. But what was the result? Has the country been ruined, or even distressed? Was it ever more prosperous than since that act? The President verily believes the bank has not the power to produce the calamities its friends threaten. The funds of the Government will not be annihilated by being transferred. They will immediately be issued for the benefit of trade, and if the Bank of the United States curtails its loans the State banks, strengthened by the public deposits, will extend theirs. What comes in through one bank will go out through others, and the equilibrium will be preserved. Should the bank, for the mere purpose of producing distress, press its debtors more heavily than some of them can bear, the consequences will recoil upon itself, and in the attempts to embarrass the country it will only bring loss and ruin upon the holders of its own stock. But if the President believed the bank possessed all the power which has been attributed to it, his determination would only be rendered the more inflexible. If, indeed, this corporation now holds in its hands the happiness and prosperity of the American people, it is high time to take the alarm. If the despotism be already upon us and our only safety is in the mercy of the despot, recent developments in relation to his designs and the means he employs show how necessary it is to shake it off. The struggle can never come with less distress to the people or under more favorable auspices than at the present moment.

All doubt as to the willingness of the State banks to undertake the service of the Government to the same extent and on the same terms as it is now performed by the Bank of the United States is put to rest by the report of the agent recently employed to collect information, and from that willingness their own safety in the operation may be confidently inferred. Knowing their own resources better than they can be known by others, it is not to be supposed that they would be willing to place themselves in a situation which they can not occupy without danger of annihilation or embarrassment. The only consideration applies to the safety of the public funds if deposited in those institutions, and when it is seen that the directors of many of them are not only willing to pledge the character and capital of the corporations in giving success to this measure, but also their own property and reputation, we can not doubt that they at least believe the public deposits would be safe in their management. The President thinks that these facts and circumstances afford as strong a guaranty as can be had in human affairs for the safety of the public funds and the practicability of a new system of collection and disbursement through the agency of the State banks.

From all these considerations the President thinks that the State banks ought immediately to be employed in the collection and disbursement of the public revenue, and the funds now in the Bank of the United States drawn out with all convenient dispatch. The safety of the public moneys if deposited in the State banks must be secured beyond all reasonable doubts; but the extent and nature of the security, in addition to their capital, if any be deemed necessary, is a subject of detail to which the Treasury Department will undoubtedly give its anxious attention. The banks to be employed must remit the moneys of the Government without charge, as the Bank of the United States now does; must render all the services which that bank now performs; must keep the Government advised of their situation by periodical returns; in fine, in any arrangement with the State banks the Government must not in any respect be placed on a worse footing than it now is. The President is happy to perceive by the report of the agent that the banks which he has consulted have, in general, consented to perform the service on these terms, and that those in New York have further agreed to make payments in London without other charge than the mere cost of the bills of exchange.

It should also be enjoined upon any banks which may be employed that it will be expected of them to facilitate domestic exchanges for the benefit of internal commerce; to grant all reasonable facilities to the payers of the revenue; to exercise the utmost liberality toward the other State banks, and do nothing uselessly to embarrass the Bank of the United States.