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judge whether the public deposits in the Bank of the United States were entirely safe; but that as his single powers might be inadequate to the object, I recommended the subject to Congress as worthy of their serious investigation, declaring it as my opinion that an inquiry into the transactions of that institution, embracing the branches as well as the principal bank, was called for by the credit which was given throughout the country to many serious charges impeaching their character, and which, if true, might justly excite the apprehension that they were no longer a safe depository for the public money. The extent to which the examination thus recommended was gone into is spread upon your journals, and is too well known to require to be stated. Such as was made resulted in a report from a majority of the Committee of Ways and Means touching certain specified points only, concluding with a resolution that the Government deposits might safely be continued in the Bank of the United States. This resolution was adopted at the close of the session by the vote of a majority of the House of Representatives.
Although I may not always be able to concur in the views of the public interest or the duties of its agents which may be taken by the other departments of the Government or either of its branches, I am, notwithstanding, wholly incapable of receiving otherwise than with the most sincere respect all opinions or suggestions proceeding from such a source, and in respect to none am I more inclined to do so than to the House of Representatives. But it will be seen from the brief views at this time taken of the subject by myself, as well as the more ample ones presented by the Secretary of the Treasury, that the change in the deposits which has been ordered has been deemed to be called for by considerations which are not affected by the proceedings referred to, and which, if correctly viewed by that Department, rendered its act a matter of imperious duty.
Coming as you do, for the most part, immediately from the people and the States by election, and possessing the fullest opportunity to know their sentiments, the present Congress will be sincerely solicitous to carry into full and fair effect the will of their constituents in regard to this institution. It will be for those in whose behalf we all act to decide whether the executive department of the Government, in the steps which it has taken on this subject, has been found in the line of its duty.
Sixth Annual Message-Andrew Jackson
Twenty-third Congress, 2d Session
DECEMBER 1, 1834.
[Source: James D. Richardson, A Compilation of the Messages and Papers of the Presidents, Vol. 2, pp. 1327-1331]
Circumstances make it my duty to call the attention of Congress to the Bank of the United States. Created for the convenience of the Government, that institution has become the scourge of the people. Its interference to postpone the payment of a portion of the national debt
that it might retain the public money appropriated for that purpose to strengthen it in a political contest, the extraordinary extension and contraction of its accommodations to the community, its corrupt and partisan loans, its exclusion of the public directors from a knowledge of its most impotrant proceedings, the unlimited authority conferred on the president to expend its funds in hiring writers and procuring the execution of printing, and the use made of that authority, the retention of the pension money and books after the selection of new agents, the groundless claim to heavy damages in consequence of the protest of the bill drawn on the French Government, have through various channels been laid before Congress. Immediately after the close of the last session the bank, through its president, announced its ability and readiness to abandon the system of unparalleled curtailment and the interruption of domestic exchanges which it had practiced upon from the 1st of August, 1833, to the 30th of June, 1834, and to extend its accommodations to the community. The grounds assumed in this annunciation amounted to an acknowledgment that the curtailment, in the extent to which it had been carrier, was not necessary to the safety of the bank, and had been persisted in merely to induce Congress to grant the prayer of the bank in its memorial relative to the removal of the deposits and to give it a new charter. They were substantially a confession that all the real distresses which individuals and the county had endured for the preceding six or eight months had been needlessly produced by it, with the view of affecting through the sufferings of the people of the legislative action of Congress. It is a subject of congratulation that Congress and the country had the virtue and firmness to bear the infliction, that the energies of our people soon found relief from this wanton tyranny in vast importations of the precious metals from almost every part of the world, and that at the close of this tremendous effort to control our Government the bank found itself powerless and no longer able to loan out its surplus means. The community had learned to manage its affairs without its assistance, and trade had already found new auxiliaries, so that on the 1st of October last the extraordinary spectacle was presented of a national bank more than one-half of whose capital was either lying unproductive in its vaults or in the hands of foreign
To the needless distresses brought on the country during the last session of Congress has since been added the open seizure of the dividends on the public stock to the amount of $170,041, under pretense of paying damages, cost, and interest upon the protested French bill. This sum constituted a portion of the estimated revenues for the year 1834, upon which the appropriations made by Congress were based. It would as soon have been expected that our collectors would seize on the customs or the receivers of our land offices on the moneys arising from the sale of public lands under pretenses of claims against the United States as that the bank would have retained the dividends. Indeed, if the principle be established that anyone who chooses to set up a claim against the United States may without authority of law seize on the public property or money wherever he can find it to pay such claim, there will remain no assurance that our revenue will reach the Treasury or that it will be applied after the appropriation to the purposes designated in the law. The paymasters of our Army and the pursers of our Navy
may under like pretenses apply to their own use moneys appropriated to set in motion the public force, and in time of war leave the country without defense. This measure resorted to by the bank is disorganizing and revolutionary, and if generally resorted to by private citizens in like cases would fill the land with anarchy and violence.
It is a constitutional provision "that no money shall be drawn from the Treasury but in consequence of appropriations made by law." The palpable object of this provision is to prevent the expenditure of the public money for any purpose whatsoever which shall not have been first approved by the representatives of the people and the States in Congress assembled. It vests the power of declaring for what purposes the public money shall be expended in the legislative department of the Government, to the exclusion of the executive and judicial, and it is not within the constitutional authority of either of those departments to pay it away without law or to sanction its payment. According to this plain constitutional provision, the claim of the bank can never be paid without an appropriation by act of Congress. But the bank has never asked for an appropriation. It attempts to defeat the provision of the Constitution and obtain payment without an act of Congress. Instead of awaiting an appropriation passed by both Houses and approved by the President, it makes an appropriation for itself and invites an appeal to the judiciary to sanction it. That the money had not technically been paid into the Treasury does not affect the principle intended to be established by the Constitution. The Executive and the judiciary have as little right to appropriate and expend the public money without authority of law before it is placed to the credit of the Treasury as to take it from the Treasury. In the annual report of the Secretary of the Treasury, and in his correspondence with the president of the bank, and the opinions of the Attorney-General accompanying it, you will find a further examination of the claims of the bank and the course it has pursued.
It seems due to the safety of the public funds remaining in that bank and to the honor of the American people that measures be taken to separate the Government entirely from an institution so mischievous to the public prosperity and so regardless of the Constitution and laws. By transferring the public deposits, by appointing other pension agents as far as it had the power, by ordering the discontinuance of the receipt of bank checks in the payment of the public dues after the 1st day of January, the Executive has exerted all its lawful authority to sever the connection between the Government and this faithless corporation.
The high-handed career of this institution imposes upon the constitutional functionaries of this Government duties of the gravest and most imperative character-duties which they can not avoid and from which I trust there will be no inclination on the part of any of them to shrink. My own sense of them is most clear, as is also my readiness to discharge those which may rightfully fall on me. To continue any business relations with the Bank of the United States that may be avoided without a violation of the national faith after that institution has set at open defiance the conceded right of the Government to examine its affairs, after it has done all in its power to deride the public authority in other respects and to bring it into disrepute at
home and abroad, after it has attempted to defeat the clearly expressed will of the people by turning against them the immense power intrusted to its hands and by involving a country otherwise peaceful, flourishing, and happy, in dissension, embarrassment, and distress, would make the nation itself a party to the degradation so sedulously prepared for its public agents and do much to destroy the confidence of mankind in popular governments and to bring into contempt their authority and efficiency. In guarding against an evil of such magnitude considerations of temporary convenience should be thrown out of the question, and we should be influenced by such motives only as look to the honor and preservation of the republican system. Deeply and solemnly impressed with the justice of these views, I feel it to be my duty to recommend to you that a law be passed authorizing the sale of the public stock; that the provision of the charter requiring the receipt of notes of the bank in payment of public dues shall, in accordance with the power reserved to Congress in the fourteenth section of the charter, be suspended until the bank pays to the Treasury the dividends withheld, and that all laws connecting the Government or its officers with the bank, directly or indirectly, be repealed, and that the institution be left hereafter to its own resources and means.
Events have satisfied my mind, and I think the minds of the American people, that the mischiefs and dangers which flow from a national bank far overbalance all its advantages. The bold effort the present bank has made to control the Government, the distresses it has wantonly produced, the violence of which it has been the occasion in one of our cities famed for its observance of law and order, are but premonitions of the fate which awaits the American people should they be deluded into a perpetuation of this institution or the establishment of another like it. It is fervently hoped that thus admonished those who have heretofore favored the establishment of a substitute for the present bank will be induced to abandon it, as it is evidently better to incur any inconvenience that may be reasonably expected than to concentrate the whole moneyed power of the Republic in any form whatsoever or under any restrictions.
Happily it is already illustrated that the agency of such an institution is not necessary to the fiscal operations of the Government. The State banks are found fully adequate to the performance of all services which were required of the Bank of the United States, quite as promptly and with the same cheapness. They have maintained themselves and discharged all these duties while the Bank of the United States was still powerful and in the field as an open enemy, and it is not possible to conceive that they will find greater difficulties in their operations when that enemy shall cease to exist.
The attention of Congress is earnestly invited to the regulation of the deposits in the State banks by law. Although the power now exercised by the executive department in this behalf is only such as was uniformly exerted through every Administration from the origin of the Government up to the establishment of the present bank, yet it is one which is susceptible of regulation by law, and therefore ought so to be regulated. The power of Congress to direct in what places the Treasurer shall keep the moneys in the Treasury and to impose restrictions upon the Executive authority in relation to their custody and
removal is unlimited, and its exercise will rather be courted than discouraged by those public officers and agents on whom rests the responsibility for their safety. It is desirable that as little power as possible should be left to the President or the Secretary of the Treasury over those institutions, which, being thus freed from Executive influence, and without a common head to direct their operations, would have neither the temptation nor the ability to interfere in the political conflicts of the country. Not deriving their charters from the national authorities, they would never have those inducements to meddle in general elections which have led the Bank of the United States to agitate and convulse the country for upward of two years.
The progress of our gold coinage is creditable to the officers of the Mint, and promises in a short period to furnish the country with a sound and portable currency, which will much diminish the inconvenience to travelers of the want of a general paper currency should the State banks be incapable of furnishing it. Those institutions have already shown themselves competent to purchase and furnish domestic exchange for the convenience of trade at reasonable rates, and not a doubt is entertained that in a short period all the wants of the country in bank accommodations and exchange will be supplied as promptly and as cheaply as they have heretofore been by the Bank of the United States. If the several States shall be induced gradually to reform their banking systems and prohibit the issue of all small notes, we shall in few years have a currency as sound and as little liable to fluctuations as any other commercial country.
Annual Report, Secretary of Treasury (Levi Woodbury)
Twenty-Third Congress, 2d Session
DECEMBER 4, 1834.
[Source: House Doc. 3, 23d Congress, 2d Session, pp. 6-8, 16-18]
The revenue from bank dividends has been estimated at somewhat less than heretofore, in consequence of the sales of our bank stock, under the act of July 10, 1832, for the investment of the accruing income of the Navy Pension and Hospital funds having already amounted to $656,600, and on which the Treasury can now receive no dividends applicable to general purposes. It might, perhaps, be advisable to deduct a still further sum to meet any contingency like that of the present year, in which the United States Bank, without the consent of this department, or the sanction of Congress, and without any forewarning of its intention, seized on about $170,041 of the estimated revenue from this source, and has since withheld it from the public Treasury.
Copies of the opinions of the Attorney General, and the whole correspondence on this subject between the Department and the Bank, which took place previously to the request for these opinions, are an