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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.
As one of the most serious objections to the Bank of the United States is the power which it concentrates, care must be taken in finding other agents for the service of the Treasury not to raise up another power equally formidable. Although it would probably be impossible to produce such a result by any organization of the State banks which
could be devised, yet it is desirable to avoid even the appearance. To this end it would be expedient to assume no more power over them and interfere no more in their affairs than might be absolutely necessary to the security of the public deposit and the faithful performance of their duties as agents of the Treasury. Any interference by them in the political contests of the country with a view to influence elections ought, in the opinion of the President, to be followed by an immediate discharge from the public service.
It is the desire of the President that the control of the banks and the currency shall, as far as possible, be entirely separated from the political power of the country as well as wrested from an institution which has already attempted to subject the Government to its will. In his opinion the action of the General Government on this subject ought not to extend beyond the grant in the Constitution, which only authorizes Congress "to coin money and regulate the value thereof;" all else belongs to the States and the people, and must be regulated by public opinion and the interests of trade.
In conclusion, the President must be permitted to remark that he looks upon the pending question as of higher consideration than the mere transfer of a sum of money from one bank to another. Its decision may affect the character of our Government for ages to come. Should the bank be suffered longer to use the public moneys in the accomplishment of its purposes, with the proofs of its faithlessness and corruption before our eyes, the patriotic among our citizens will despair of success in struggling against its power, and we shall be responsible for entailing it upon our country forever. Viewing it as a question of transcendent importance, both in the principles and consequences it involves, the President could not, in justice to the responsibility which he owes to the country, refrain from pressing upon the Secretary of the Treasury his view of the considerations which impel to immediate action. Upon him has been devolved by the Constitution and the suffrages of the American people the duty of superintending the operation of the Executive Departments of the Government and seeing that the laws are faithfully executed. In the performance of this high trust it is his undoubted right to express to those whom the laws and his own choice have made his associates in the administration of the Government his opinion of their duties under circumstances as they arise. It is this right which he now exercises. Far be it from him to expect or require that any member of the Cabinet should at his request, order, or dictation do any act which he believes unlawful or in his conscience condemns. From them and from his fellow-citizens in general he desires only that aid and support which their reason approves and their conscience sanctions.
In the remarks he has made on this all-important question he trusts the Secretary of the Treasury will see only the frank and respectful declarations of the opinions which the President has formed on a measure of great national interest deeply affecting the character and usefulness of his Administration, and not a spirit of dictation, which the President would be as careful to avoid as ready to resist. Happy will he be if the facts now disclosed produce uniformity of opinion and unity of action among the members of the Administration.
The President again repeats that he begs his Cabinet to consider the proposed measure as his own, in the support of which he shall require no one of them to make a sacrifice of opinion or principle. Its responsibility has been assumed after the most mature deliberation and reflection as necessary to preserve the morals of the people, the freedom of the press, and the purity of the elective franchise, without which all will unite in saying that the blood and treasure expended by our forefathers in the establishment of our happy system of government will have been vain and fruitless. Under these convictions he feels that a measure so important to the American people can not be commenced too soon, and he therefore names the 1st day of October next as a period proper for the change of the deposits, or sooner, provided the necessary arrangements with the State banks can be made. ANDREW JACKSON.
Report of Secretary of Treasury (R. B. Taney), on Removal of Public Deposits
Twenty-Third Congress, 1st Session
DECEMBER 4, 1833.
[Source: House Doc. 2, 23d Congress, 1st Session, pp. 1–21]
To the Hon. ANDREW STEVENSON,
December 3, 1833.
Speaker of the House of Representatives:
SIR: In pursuance of the power reserved to the Secretary of the Treasury by the act of Congress entitled "An act to incorporate the subscribers to the Bank of the United States," I have directed that the deposites of the money of the United States shall not be made in the said bank or branches thereof, but in certain State banks which have been designated for that purpose; and I now proceed to lay before Congress the reasons which induced me to give this order and direction.
The sixteenth section of the law above mentioned is in the following words: "And be it further enacted, that the deposites of the money of the United States, in places in which the said bank and branches thereof may be established, shall be made in said bank or branches thereof, unless the Secretary of the Treasury shall at any time otherwise order and direct; in which case, the Secretary of the Treasury shall immediately lay before Congress, if in session, and if not, immediately after the commencement of the next session, the reasons of such order or direction."
It has been settled by repeated adjudications, that a charter granted by a State to a corporation like that of the Bank of the United States is a contract between the sovereignty which grants it, and the stockholders. The same principle must apply to a charter granted by the United States; and consequently the act incorporating the bank is to be regarded as a contract between the United States of the one part, and the stockholders of the other; and by the plain terms of the con
tract, as contained in the section above quoted, the stockholders have agreed that the power reserved to the Secretary over the deposites shall not be restricted to any particular contingencies, but be absolute and unconditional, as far as their interests are involved in the removal. The order, therefore, of the Secretary of the Treasury directing the public money to be deposited elsewhere, can in no event be regarded as a violation of the contract with the stockholders, nor impair any right secured to them by the charter. The Treasury Department being entrusted with the administration of the finances of the country, it was always the duty of the Secretary, in the absence of any legis lative provision on the subject, to take care that the public money was deposited in safe keeping, in the hands of faithful agents, and in convenient places, ready to be applied according to the wants of the Government. The law incorporating the bank has reserved to him, in its full extent, the power he before possessed. It does not confer on him a new power, but reserves to him his former authority without any new limitation. The obligation to assign the reasons for his direction to deposite the money of the United States elsewhere, cannot be considered as a restriction of the power, because the right of the Secretary to designate the place of deposite was always necessarily subject to the control of Congress. And as the Secretary of the Treasury presides over one of the Executive Departments of the Government, and his power over this subject forms a part of the executive duties of his office, the manner in which it is exercised must be subject to the supervision of the officer to whom the constitution has confided the whole executive power, and has required to take care that the laws be faithfully executed.
The faith of the United States is, however, pledged, according to the terms of the section above quoted, that the public money shall be deposited in this bank, "unless the Secretary of the Treasury shall otherwise order and direct." And as this agreement has been entered into by Congress in behalf of the United States, the place of deposite could not be changed by a legislative act, without disregarding a pledge which the Legislature has given; and the money of the United States must, therefore, continue to be deposited in the bank until the last hour of its existence, unless it shall be otherwise ordered by the authority mentioned in the charter. The power over the place of deposite for the public money would seem properly to belong to the Legislative Department of the Government. And it is difficult to imagine why the authority to withdraw it from this Bank was confided exclusively to the Executive. But the terms of the charter appear to be too plain to admit of question. And although Congress should be satisfied that the public money was not safe in the care of the bank, or should be convinced that the interests of the people of the United States imperiously demanded the removal, yet the passage of a law directing it to be done would be a breach of the agreement into which they have entered.
Assuming this to be the true construction of the charter to the bank, it must be the duty of the Secretary of the Treasury to withdraw the deposites of the public money from that institution, whenever the change would, in any degree, promote the public interest. It is not necessary that the deposites should be unsafe, in order to justify the removal. The authority to remove is not limited to such a contin
gency. The bank may be perfectly solvent, and prepared to meet promptly all demands upon it; it may have been faithful in the performance of its duties, and yet the public interest may require the deposites to be withdrawn. And as that cannot be done without the action of this department, the Secretary of the Treasury would betray the trust confided to him, if he did not cause the deposites to be made elsewhere, whenever the change would advance the public interests or convenience. The safety of the deposites, the ability of the bank to meet its engagements, its fidelity in the performance of its obligations, are only a part of the considerations by which his judgment must be guided. The general interest and convenience of the people must regulate his conduct.
This principle was distinctly asserted by Mr. Crawford, when he was the Secretary of the Treasury, soon after the bank obtained its charter. In a postscript to his letter to the President of the Mechanics' Bank, of New York, dated February 13, 1817, he says, "The Secretary of the Treasury will always be disposed to support the credit of the State banks, and will, invariably, direct transfers from the deposites of the public money, in aid of their legitimate exertions to maintain their credit. But as the proposition of the Bank of the United States excludes the idea of pressure on its part, no measure of that nature appears to be necessary at this time." Other passages in the correspondence of Mr. Crawford, with the banks, about the period above mentioned, might be referred to, equally indicating the same opinion; and, at that day, no doubt seems to have been entertained of the power or of the duty of the Secretary, in relation to this subject. It does not appear to have been then even suggested that the right of removal depended on the solvency of the bank, or the safety of the public money committed to its custody; on the contrary, in the passage above quoted, the superior safety of the State banks is by no means regarded as necessary to give him the right to make the transfer to them; for he declares that he will give the deposites to the State banks, on account of their weakness, and to protect them from the Bank of the United States, if, by means of its superior strength, it sought to oppress them. Nor can any distinction be taken between the transfer of a part, and the transfer of the whole sum remaining on deposite. The language of the charter recognises no such distinction; and the principle asserted by Mr. Crawford would have led him to the removal of the whole amount of the public money to the State banks, if a pressure on the part of the Bank of the United States had rendered such a measure necessary, in order to support the State banks "in their legitimate exertions to maintain their credit."
The language of the law, therefore, and the usage and practice of the government under it, establish the following principles:
1st. That the power of removal was intended to be reserved exclusively to the Secretary of the Treasury, and that, according to the stipulations in the charter, Congress could not direct it to be done. 2d. That the power reserved to the Secretary of the Treasury does not depend for its exercise merely on the safety of the public money in the hands of the bank, nor upon the fidelity with which it has conducted itself; but he has the right to remove the deposites, and it is his duty to remove them whenever the public interest or convenience will be promoted by the change.