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Condition of the Bank of the United States and State Banks.

[23d Cong. 1st Sess,

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moment the currency shall be issued as a final.cial resource, paper currency which may be advanced upon such pledge. d-preciation will tollow, and all the relations of sr ciely Frauds will be practised by pledging property which is will be dis urbed. If the Government of the nation in encimbered, which it would be extremely difficult to de. which a paper currency has been established, shall be tect. The Government will be involved in endless litigadeeply impressed with this truth, will it not be restrained tion with individuals who are interested in the encumfrom ihe apprehended abuse? Currency of every kind is brances by which its rights to the property pledged is liable to great abuses. The history of the cuinage of every embarrassed. In such contests, the interest of the Gov. ration whose annals are known, is little more than a de. ernment is always endangered, even where right is on its tail of the frauds which have been practised by Govern. side. It is not qualified to enter into such litigations with ments upon the people. Until the twentieth year of the an equal chance of success. The feelings of the commureign of Edward III of England, a pound troy of silver of nity are always, except in flagrant cases of fraud, upon slandard fineness, and a pound sterling, were synoriymous the s'de of an inilividual, supposed to be struggling with terms: twenty shillings sterling being, in fact, a pound the overwhelming influence of authorilyBesides, in all troy of standard silver. Change followed change in rapid conlesis of this nature, someiling of the respect for the succession, until, in the reign of Elizabeth, a pound iroy Government, which ought to be cherished by ihe citizens, of standard silver was direcied to be coined into sixty-two especially of a free state, will be lost. The situation is shillings. This immense change in the value of the cur- invidious, and ought not voluntarily to be assumed by a rency was effected in tlie space of about two centuries. Government jealous of its dignity and purity of character. In other modern states, durmg the same period, changes It is, therefore, believed that a national currency cannot not less important occurred in the coinage. Frequently, be issued with safety, with a reasonable prospect of sucthese changes were effc c!ed by deteriorating the standard cess, and with sufficient security against redundancy, but fineness of the coin. For more than a century past, the in exchange for gold and silver of a definite standard, or coinage of the civilized world has undergone no material for the public stock at certain fixed rales. When issued change with a view to the practice of fraud upon the peu- in exchange for them, and for them alone, there is, though ple. Whether this furbearance is to be attributed to an not the same, yet perhaps an equal security against reimprovement in the morality of modern Governments, or dundancy, as in the case of a metallic currency. When to a more correcl understanding of the principles of cur it is issued in exchange for coin, there is no addition made rency, and of the consequences that must result from to the currency. When it is issued in exchange for public every change by which the relations of society are affect stock, commanding, previously to the exchange, its par ed, it furnishes just ground of expectation that they will value in coin, the party who acquires the currency parts not hereafter be aitempted. Nothing more is necessary with that which was equal to specie, and is deprived of to secure an unalterable adherence to the maxims upon the annual interest which it produced. Unless the interest which it is manifestly necessary that a paper currency of the currency resulting from its scarcity should exceed must be founded in order to preserve a uniformity of that paid upon the stock, it would not be demanded in value, than the same morality and the same intelligence. exchange for the stock. In either case, the danger of reWithout assuming the principle of the perfectibility of dundancy is extremely remote. By the exchange of specie human nature, the hope may be indulged, that the nature for currency, the active capital of the country will be inof currency will continue to command the aitention of creased to the amount of the currency; and the capacity slatesmen, and that the abuses which have resulted from of the nation to redeem it, whenever it shall, by any cir. improper changes in ihe currency will not again occur in cumbiance whatever, become expedient, will be unques. the same degree.

tionable. 4. When the currency is melallic, no addition can be But it may be doubled whether, under such conditions, made to it without giving an equivalent. It is indispen- a paper currency ever can be put in circulation. Under sable that this condition should be annexed to the acquisi- a Government firmly established, conducted by upright tion of the paper currency, preliminary to its entering into and enlightened councils, and possessing absolute power circulation. If it can be put in circulation, only on pays over the currency, it is believed there is no just reason to ing its nominal amount in that which has a general and apprehend a dishculty of ibat nature. If, in such a Gov. fixed value, determined by the consent of other nations, ernment, banks existed, deriving iheir powers from it, the it will continue to preserve that value during the time it specie in their possession would be gradually exchanged circulares, unless the relation which it bore at the time of for the paper currency which would become the basis of its issue to the quantity of articles, the exchanges of which their operations. Not only the specie which they posit is destined to perform, shall be varied.

sessed would be thus exchanged, but exertions would, 5. As a paper currency is issued upon the national cred. from time to time, be made to acquire the sums necessary it, the whole property of the nation is pledged for its re- to support their banking operations. Specie would be demption, whenever, by any circumstance, it may become imported even at an expense, for the purpose of being the interest of the community that it should be redeemed. exchanged. Whilst specie formed the basis of the operaIt is, therefore, manitest that it should not issue upon the tions of banks, its importation could not fail to be procredit of any individual, or association of individuals. A ductive of loss. Each importation not only produced the part can never be equal to the whole. The credit of any necessity of additional importations, but at an increased individual, or association of individuals, cannot be equivo expense. But, when importations shall be made for the alent to that of the nation of which they form a part. purpose of being exchanged for the currency, the exporte But, it may be said that, although the credit of individuals ation of the specie thus imported will not affect the opis not equivalent to the credit of the nation, yet an equiv. erations of the banks. It is only when the funding of the alent for a particular portion of that credit may be found currency sball commence, that they will be admonished in the pledge or mortgage of property of equal or greater to desist from further importations. Individuals and banks value than the currency issued upon it. This may be true; would likewise exchange public stock at the rates prebut the value of property has been continually fluctuating: scribed by the system for the paper currency. Whenever it will continue to fluctuate, after giving to the advocates the demand for currency should be such as to raise the of a paper currency full credit for the superior stability inlerest of money considerably above that produced by whichi, they suppose, will attend its substitution for gold the public slock, it would by banks and individuals be and silver as the standard of value. But this is not the given in exchange for the currency. But the facility which only objection to the acceptance of property as a pledge ihe existence of a public debt furni-hes in procuring the for the payment, by individuals, of an equivalent for the paper currency, is courterbalanced by the difficulty of

23d Cong. 1st Sess.]

Condition of the Bank of the United States and State Banks.

complying with the public engagement to discharge such The currency, upon being fundet, should be invariably debt in a metallic currency. Aller a paper circulation cancelled. Under a System of this kind, if no oiher peper sliall be substituted for kold and silver, they will be found was permitted to circulale, than ihe national currency, a in the country only in the quantity demanded for manufac. redundancy which would affect its value could only occur tures, and for such branches of commerce as are entirely by a temporary diminution of the articles which were lo dependent upon them. A considerable demand for gold be exchanged through its instrumentality. In that event, and silver by the Government, to meet its engagements the price of the ariicles would be enhanced, so as to re. previously contracted, would raise their price in the mar- quire a greater amount of currency to effect their ex. ket, and render the ublization to discharge those engage change. Should the price not be enhanced, in proportion menis, in ihe precious metals, not cnly extremely onerous, to the diminution in the quantity of the articles, that porbut perhaps sometimes impracticable. In such a state, a tion of the currency which would, under such circumcompromise with the public creditors would seem to be stances, be left without employment, would be funded. a preliminary measure. This, wider any circumsances, A just relation between the amount of currency, and the would be a measure of great delicacy and difficuliy, and, demand for it, would be promptly restored without affectin some cases, would probably be ulterly impracicable. ing, injuriously, the relations between individuals. On

6. Whenever, from any cause, the currency should be the other hand, should a gr-ater quanlity of exchangeable come redundant, the redundancy may be funded at a rale articles be producel, the demand for currency would exof interest a fraction below the rate of legal interest. ceed the supply, and lead immerliately to additional issues,

In determining the rale at which it may be funded, die until the necessary supply should be obtained. regard should be paid to the rate of interest previously But, in a state where banks already existed, which deexisting in the state. The rate of interest, it is conceived, rived their charters from the sovereignty that regulated ought not to depend, and, where a metallic currency pre: the currency; where ihe people were accustomed tu bank vails, does not dt penil, solely upon the amount of cuir n. notes, and in the habit of receiving them, the agency of cy necessary to perform, wiih iacility, the exchanges re- these institutions might be admilled in supplying a porquired by the wants and convenience of society. In a new tion of the currency. They might be permitted to issue country, where there is but a slight accimulaijon of cap- their notes, payable on demand, in the national currency. ital, the interest of money will be high, not withstanding Their notes would, of course, be issued on personal sethere may be even a redundancy of currency beyond what curiiy. In this case, the currency might become redun. is necessary to effect its changes. In such a country, all dant by the issues of the banks. Whenever this should the objects upon which capital may be employed, except happen, the national currency would be demanded of those of the most simple kind, are unoccupied. The cur. them for the purpose of being funded; the banks would rency necessary to effect the exchanges of its properly, be compelled to curtail their discounts, to relieve them. moveable and immoveable, will be entirely insuflicient to selves from the pressure, and the amount of the currency satisly the demand for capital for those objects. If it should would be promptly reduced to the legitimale demand. be multiplied so as to equal that demand, it would exceed Wherever the agency of banks should be employed in the demand for the necessary exchanges of society, and, furnishing part of the circulation, a refusal, or omission, consequently, depreciate. such, in fact, it is believed, to discharge their notes on demand, in the national curwould be the consequence of issuing the currency upon rency, should be treated as an act of bankruptcy. The individual credit, or upon a pledge of property, at a rate national currency being a legal tender in the payment of of interest below that which previously existed in the debts to individuals and to the Government, would, in restale. Any change of the interest of money by law, prelation to the banks, perform the functions of specie, where vious to iis having taken place in individual transactions, bank noies are convertible into coin. But, in order to in consequence of the accumulation of capital, would be impose a salutary check against excessive issues of bank unjus', and could not fail to produce serious inconvenience notes, the national currency should alone be receivable to the community. Armitting the rate of interest, in a in all payments to the Government, state about to make the experiment, to be six per cent, In an attempt to trace the probable results of a paper then the currency should be issued only in exchange for currency, founded upon the principles which have been specie or six per cent. stock, or other stock according 10 developed in the preceding pages, the influence which it that ratio. If the currency should, when, by any means, will have upon foreign exchange requires investigation, a redundancy existed, be fundable at five and a half per The want of stability, morality, and intelligence in the cent. interest, the u'most depreciation to wbich it could Government which may undertake to substitute a paper be subject would be eight and one-third per cent. But for a metallic currency, are the objections which have it is probable that the real depression in its value would already been considered. To these, according to come not, at any time, be more than half that amount, B-fore mon opinion, is to be added the injurious effect which, it funding would commence, the public stock, receivable is supposed, it will bare upon foreign exchange. In a in exchange for the national currency, would be above the country where the currency is metallic, an unfavorable rates at wbich it was receivable. Its issue upon the ex. stale of foreign exchange will probably have the followchange of stock would, therefore, have ceased. There ing effects: are, in every community, capitalis:s who would prefer 1st. To raise the price of exportable articles as much lending to the Government ai five and a half per cent., above that which they onght to bear, as the premium paid than to individuals at six. The funding of the currency upon foreign biils, until it exceeds the expense of exportwould, therefore, begin before the redundancy would offer ing specie to the foreign market. any general inducement to that made of reducing it. The 21. When this rise exceeds the expense of such exportvariation to which its value would be subject, would there. ation, the price of exportable articles will fall gradually fore be less than eight and one-third per cent. It would below what they ought to command, to the extent of that be the interest of ihe Government to reserve the right of excess. redeeming the stock created by funding, at its par value; 3. Until this fall in their price shall be effected, specie under t've condition, however, of redeeming it according will be exported; after which, it will cease. to the order of time in which it was created. Connected 4ih. This fall in their price, by increasing their conwith this system should be a permission to the banks to sumption in the foreign markets, ultimately provides for purchase public stock, but not to dispose of it, except to the return of the specie which had been exported. the Government, at its par or current value, when onder 5th. During the second and third stages of this process, par, unless the Government should decline the purchase. I the price of all articles not exportable is affected in a

Con lit on of the Bank of the Un ted States and State Banks.

[23d Cong. Ist Sess.

greater degree; enterprise is damped, and distress pre. unfavorable, continue to command higher prices than vaily.

when the exchange is favorable. This increased price Such are the necessary effects of an unfavorable state of will encourage industry and enterprise, and constantly foreign exchange where the currency is metallic. As the tend to augment the productive energies of the commu. vital principle of commerce is gain, it is probable that, nity. This effect cannot fairly be attributed to any depregenerally, the price of exportable articles would, in faci, ciation in the currency. That will continue to bear near. be rather higher than is slated in the preceding (educ. ly the same proportion to the exchangeable articles of the tions; the tiinid might export specie, before the premium state, as when toreign exchange was favorable. It is probupon exchange excet ded the expense of its exportation; able even that is relation to those articles will be chan. but timidity is not the predominant characteristic of com- ged, so as to produce an appreciation of the currency; and mercial enierprise. On the other hand, the sanguine and that this appreciation will be perceived, in a slight de. enterprising, relying upon the chance of beller markets, gree, in the depression of the value of all articles not exwould give higher prices, rather than submit to certain portable. The effects of this appreciation will, however, lo s upon the exportation of specie or the purchase of be diminished by the impulse given to industry and enterbills above par.

prise, by the increased price of all articles which can be In a country where a paper currency has been adopted, exported. and the principles by which a red ndancy may be pre These are conceived to be the effects which a weil. vented have been enforced, an unfavorable state of for regulated paper currancy will have upon the foreign ex. eign exchange will probably have the following effects: changes, and npon the domestic industry of the country

1st. The effect of raising the price of exportable arti- which may adopt it. If the value of currency depends, cles as much above what they ought to bear, as equals like that of all other articles, upon the quan:ity compared the premium upon foreign bills. But, in this case, gold with the demand, the idea of its depreciation in raising and silver being exportable articles, will raise in the saine the price of articles in the case which has been consider. proporlion as all other articles.

ed, must be rejected. That this position is incontroverti. 20. When the price of all articles is raised so high that ble, seems to have been admilled by all writers upon the a loss will be incurred by their sile in foreign markets, subject. This admission is founded in the reports which those who have no remittancrs to make will withdraw have been made to the British Parliament; in the evidence from ihe competition. If profitable investments in other upon which those reports have been founded; and in the enterprises cannot be made, a portion of the currency al essays of those who have opposed the paper system in that their disposition will be withdrawn from circulation, by country, since the year 1797. The objection to the paper being converted into funded stock; competition will, in system, as it existed in England, was the absence of all this manner, be diminished; the price of articles for ex- restraint upon the issue of paper, and the supposed ime portation will be reduced by the reduction of the curren. possibility of imposing any efficient restraint. In fact, no cy, and by diminished competition among the purchasers. attempt has been made to impose such restraint in that It is not probable, however, that the price will fall so low country, unconnected with the convertibility of bank as to admt of a profit in foreign markets, as long as the notes into the precious metals So far as this restraint is premium upon exchange continues above the ordinary limited to the convertibility of bank notes into bullion, at commercial profit upon exported articles. But exporla. any given rale, it is rather an attempt to regulate foreign tion will not be continued at a certain loss longer than the exchange through the instrumentality of the bank, than discharge of debts previously contracted renders indi-pen. 10 confine the issie of bank notes to the sound demand sable; foreign articles will not be imported, when the loss for currency. The restraint imposed seems to rest upon upon remitiances, whether made by bills of exchange, or the idea that an unfavorable state of foreign exchange by the exportation of commodities, is equal to the profit must be the result of a redundant currency. Nothing can upon importation; the high price given for exported ar- be more incorrect than this hypothesis. Considering the Licles will increase their production, and restore foreign vitiated stale of the currency of England for more than exchange to a favorable state. The balance of trade, and twenty years past, it is not surprising that this idea should the rate of foreign exchange, which have given so much there be entertained. During that period, the unfavoratrouble to statesmen for two centuries past, when left to ble rate of foreign exchange which generally prevailed, the laws by which they will be governed, in despite of was, if not directly, at least indirecily, a tributable to the humand-vices, as invariably regulate themselves, as fluids, depreciation of their currency. But, in this interval, a when unrestraineil, find their common level. They will, favorable rate of foreign exchange more than once occur. probably, more prompily conform to these laws in a state red. To what could this favorable exchange be attribu. where a well-regulated paper currency prevails, than ted? Certainly not to the depreciation of their currency. where it is metallic. In the latter, the currency is ex. But it would be as unjust to attribute every unfavorable ported to make up any lemporary deficiency, and by that state of foreign exchange to the depreciation of the curmeans provides against the recurrence of the evil, by in- rency, as to ascribe to that currency the credit of any fadirectly causing an increase of the exportable articles of vorable state of such exchange. The truth is, that fucthe state, and diminishing the importation vf foreign arti- tations in the exchange, between two countries having a cles. Until the capacity to purchase these by the ex. metallic currency, continually occur, and depend upon change of articles shall be restored in the former, as the principles wholly unconnected with the idea of a depre. currency cannot be exported, the importations will be ciated currency. more prompily reduced to the capacily of the country to If these views be correct, the only obstacle to the estab. purchase, whilst the increase of its exportable articles lishment of a piper currency, by a Government having a will be the direct, instead of the indirect consequence of govereign right to establish it, is the danger of the instaa temporary incapacity to pay for previous importations. Ibility and want of integrity and intelligence of the Gov.

3d. During the whole process of restoring a favorable ernmen'. There is, certainly, just reason to apprehend state of exchange, in a country where a well-regulated that emergencies may arise in the affairs of every nation, paper currency prevails, the price of all articles, not ex. in which their stability may be menaced by foreign force por able, will suffir no material variation. The funding or domestic insurrection. In such an event, a panic might of the currency, which will probably take place, will not ensue, and the credit of the currency be utterly annihila. be, immediately, carried so far as to reduce the price otted. How far the receni examples which have been ad. exporiable arlicies so as to command a profit in foreign verted to in other states-how far the influence of public markes. They will, so long as the rate of exchange is opinion over the conduct of Governments may be relied


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upon as an efficient preventive against evils of such mag. mers throughout the United States. That which is paid nitude, must be determined by those to whom, under tor the public lands, although in some degree drawn from Divine Providence, the prosperity and happiness of na- every part of the Union, is principally paid by the cititions are committed. The subject involves all the com zens of the West and of the South. The greatest part plicated interests of society, except the enjoyment of of the revenne accruing from the public lands, as well as civil, political, and religious liberty. It ought to be ap- that collected in the Southern States, upon imports, bras proached with more than ordirary circumspection. In been transferred to the Middle and Eastern Siates to be states the best qualified to attempt the change, it is en- expended. The necessity of making this transfer arises vironed with doubis, which can only be dispelled by the from the circumstance that the great mass of the public light of experiment. In the United States these doubis debt is held in those States, or by foreigners, whose are greatly increased by the complex form of the Govern- agents reside in diem; and from the establishment of dock ment. In the division of power between the Fi deral and yards and naval stations in their principal ports. This State Governments, the line of separation is not suffi. iransfer will continue to be necessary until the public ciently distinct to prevent collisions, which may disturb the debt shall be extinguished, and until the other expendibarmony of the system. Collisions have already arisen, kures of the Government can, consistently with the public and in the course of human events, may be reasonably interest, be more equally distributed. if a national cur. expecied to arise, until the line of separation by which rency should be established, the demand for it in the their relative powers and duties are determined, shall be Southern and Western States, for the purpose of trang. distinctly defined by practice, or by explanatory amend- mission, would be incessant; whilst its return, by the ments of the constitution, effected according to the forms ordinary course of trade, especially in the latter, would prescribed in that instrument. Upon no question will be slow and in some degree uncertain. The currency, collision more likely arise than that contemplated by the being every where receivable by the Government, would, resolution under which this report is submitied. No at. for the purpose of remittance, be more frequently detempt to make the change has succeeded. The measure, manded in that section than specie, for the sarre reason when stripped of extraneous difficulties, must be admitted that the notes of the Bank of the United States and its to be of doubttul tendency. Under the most auspicious offices command there, at this time, a premium in specie. circumstances, it may prove abortive. Under circum- As the transfers of the public money are made by the stances in any degree adverse, it must enevitably fail. Bank of the United States, the excitement produced by Any obstacle opposed to its execution, by one or more of the demand for specie, or funds that can be remitted, the State Government:, would be decisive of its fate. consequent upon such transfers, has been directed against Their simple acquiescence in the measure would not be that institution. All the evils which the community, in sufficient to secure to it that issue to which the principles particular parts of the country, has suffered from the sudupon which it might be established would necessarily en decrease of the currency, as well as from its deprecialead. Their active co-operation would be indispensable. lion, bave been ascribed to the Bank of the United The banks which derive their authority from the State States, which, in-transferring the public funds, has been Governments are generally bound by their charters to a passiva agent in the hands of the Governmeni. discharge their notes in specie on demand. From this It is then believed that the evils which are felt in those obligalion it would be necessary to the system to relieve sections of the Union where the distress is most general, them. The obligation to discharge their notes upon de will not be extensively relieved by the establishment of a mand, in the national currency, should be substituted for national currency. The sufferings which have been that of paying them in specie.

produced by the efforts that have been made to resume If these obstacles should be removed, that connected and to continue specie payments, bave been great. They with the public debt, wbich has been suggested in a pre- are not terminaled, and musi continue until the value of vious part of the report, would still remain. After the property, and the price of labor, shall assume that relation substitution of the national currency, gold and silver to the precious metals which our wealth and industry, would be imported only in the quantity required for compared with those of other slates, shall enable us to manufactures, and for the prosecution of those branches retain. Until ibis shall be effrcled, an abortive at'empt, of Trade in which they are primary arlicles of crimmerce. by the substirution of a paper currency, to arrest the evils For these purposes, the importations would be sufficient. we are suffering, will produce the most distressing conThey might even be sufficient, and at a reasonable price, sequences. The sufferings that are past will, in such an for the payment of the annual interest of the public debi. event, recur with additional violence, and the nation will But, after the year 1824, when the sum of $10,000,000 again fi.d itself in the situation which it held at the mowould annually be expended by the Commissioners of inent when specie payments were resumed. the Sinking Fund, it is probable that the premium which

I have the honor to be, would be paid upon it would be considerable, until the

Your most obedient servant, debt was extinguished. A compromise, as has already

WM. H. CRAWFORD. been suggested, with the public creditors, would seem The honorable the SPEAKER to be a measure preliminary to any attempt to establish a

of the Ilouse of Representatives. paper currency. It is more than probable that the attempt would not only be unsuccessful, but that it would

In SENATE, February 5, 1834. injuriously affect the public credit.

Mr. Webster, from the Committee on Finance, made It may also be proper to observe that those sections of the following report: the Union where a measure of this kind would be most The Committee on Finance, to whom have been refers likely to be acceptable, would probably derive from it red the report of the Secretary of the Treasury of the 3d the least benefit. In the West and in the South, the December, 1833, on the removal of the public deposites complaints of a deficient currency have been most dis- from the Bank of the United States, and a resolution, tincily heard. In the latter, these complainis are of submitted to the Senate by an honorable member from recent date. In both they proceed in a greater degree Kentucky, declaring that the reasons assigned by the from the disbursement of the public revenue than from Secretary for the removal of the said deposites are unsatany other cause. The great mass of public expenditire islactory and insufficient, have agreed on the following is made to the east of this city. The revenue accruing report: from imports, though principally collected in the Middle The act incorporating the Bank of the United States, and Eastern States, is paid by the great mass of consu- as is justly remarked by the Secretary, is a contract, con

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taining stipulations on the part of the Government and on ject is now before Congress by way of appeal from his the part of the corporation, entered into for full and ade decision; and the question is, whether that decision quale consideration.

ought to stand, or ought to be reversed. The Government became parly to this contract by The power of the Secretary, under the law, is evi. granting the charter, and the stockholders by accepting it. denily but provisional. It is a power which he may ex"!n. consideration,” says the charter, " of the exclusive ercise in the first instance; but the propriety of his conprivileges and benefits conferred by this act on the said duct, in every instance of its exercise, is ultimately refer. bank, the president and directors thereof shall pay to the red to the wisdom of Congress, and by Congress it must United States, out of the corporale funds thereof, one be judged. He is authorized to do the act, but Congress million and five bundred i housand dollars, in three equal is to examine it when done, and to confirm or reverse it. payments;” and, in another section, it declares that The Secretary may change the deposites; but, when * during the continuance of this act, and whenever re. changed, Congress is to decide on the causes of such quired by the Secretary of the Treasury, the said corpo. change, with authority either to sanction the removal, or ration shall give the necessary facilities for transferring to restore the deposites, according to its own judgment the public funds from place to pluce within the United of right and expediency. States, or the Territories thereof, and for distributing the In order to decide whether the act of the Secretary same in payment of the public creditors, without char- ought to be confirmed, it is requisite, in the first place, ging commissions, or claiming allowance on account of dif- to form a just opinion of the true extent of his power unference of exchange; and shall do and perform the seve- der the law; and, in the second place, to consider the ral and respective duties of the commissioners of luans validity of the reasons which he bas specially assigned for for the several States, or any one or more of them, when the exercise of that power in the present case. ever required by law."

The opinion of the Secretary is, that his power over The section immediately following this provision is in the deposites, so far as respects the rights of the bank, these words: And be it further enacted, that the de. is not limited to any particular contingencies, but is absoposites of the money of the United States, in places in lute and uncondi jonal. If it be absolute and uncondi. which the said bank or branches thereof may be estab- tional, so far as respects the rights of the bank, it must lished, shall be made in said bank or branches thereof, be absolute and unconditional in all other respects; beunless the Secretary of the Treasury shall at any time cause it is obvious, if there be any limitation, that limita. olherwise order and direct; in which case the Secretary tion is imposed as much for the benefit of the bank as for of the Treasury shall immediately lay before Congress, it the security of the country. The bank has contracted in session, and, if not, immediately after the commence for the keeping of the public moneys, and paid for it as ment of the next session, the reasons for such order or for a privilege or benefit. It has agreed, at the same direction."

time, that the Secretary shall possess the power of reIt is not to be denied or doubted that this custody of moval; but then it is also agreed, that whenever this the public deposites was one of the benefits" conferred power is exercised, the reasons therefor shall be reported on the bank by the charter, in consideration of the money to Congress; Congress being thus constituted the final paid, and ihe services undertaken to be performed by judge as well of the rights of the bank, in this particular, the bank to the Government; and to this custody the as of the good of the country. So that, if the Secretary's bank has a just right, unless sich caus:-s have arisen as power be in truth absolute and unconditional, it restrains may have justified the Secretary in giving an order and Congress from judging whether the public good is injured direction for changing that custody. Any order or din by the removal, just as much as it restrains it from judgrection, therefore, issued under the provisions of this law, ing whether the righıs of the bank are injured by the necessarily involves a consideration of the just extent of removal; because the limitation, if any, is equally for the the Secretary's power, and of the righ's of the bank. securily of the bank and of the public.

But Congre-s, in making this provision, unquestionably If the bank be interested in retaining the deposites, had in view the safety of the public funds, and certain then it is interested in the truth or falsity, in the suffiimportant financial objects, as well as the making of a ciency or insufficiency, of the reasons given for tbeir rejust consideration to the bank for the sum paid and the moval. Especially is it so interested, since these reasons services undertaken by it; and with this view, also, it has are to be rendered to a tribunal which is to judge over expressed its will that the deposites shall continue to be the Secretary, and may form a different opinion on the made in the bank until good cause shall arise for ordering validity of these reasons, and may reverse his decision, otherwise. Of this good cause, the Secretary of the It clearly has an interest in retaining the deposites, and Treasury, in the first instance, and Congress, ultimately therefore is as clearly concerned in the reasons which the and conclusively, is constituted the judge. Every order, Secretary may give for their removal. And as he is bound therefore, of the Secretary for changing the deposites, to give reasons, this very circumstance shows that his presents for the exa nination of Congress a quession of authority is not absolute and unconditional; because, bow general political propriety and expediency, as well as a can an appeal be given from the decision of an absolute question of right and obligation to the bank.

power? and how can such a power be called on to.give These questions may be considered together. They reasons for any instance of its exercise? If it be absoare intimately connected; because the right of the bank lule, its only reason is a reference to its own will. to retain the deposites, and to enjoy the advantages to The committee think, therefore, that no absolute and be derived therefrom, cannot be denied, unless a case is unconditional power was conferred on the Secretary; that shown to have arisen within the just power of removal no authority was given him by which he could deprive the vested in the Secretary, and which made it his duty to bank of the custody of the public moneys, without rea. exercise that power. The Secretary is only to remove son; and that, therefore, his opinion is not to be admit. the deposites for reasons. Of these reasons he is to give ted; that, in no event, can any order for removing the an account to Congress. If they be insufficient to justify deposites impair the right secured to the bank by the the removal, the bank has a right to a return of the de. charter. If removed without good cause, the committee posites, and the country has a right also to expect that, think the removal does impair the rigbts of the bank. in that case, the public treasure will be restored to its But the opinion of the Secretary, as to his own powers, former place of safely.

is hardly more limited in respect to the Government and The Secretary having removed the deposites, and hav- lhe country, than in regard to the rights of the bank. ing reported his reasons to both Houses, the whole sub His opinion is, that it is his duty, and within his au.

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