at public auction? If they were, every man who had money might become a bidder at the verdue; or, if the Bank would give a small latitude of time in the payment, it would make an immense difference in the price. The gentleman from Maryland said, the Bank did only the same with Government that it did with merchants when their notes were due. But did not that gentleman know how one note was replaced by another? The Bank thus accommodate the merchants; but to Government they say, Pay us the debt, at whatever loss you do it, immediately. They have never said so to the whole body of merchants collectively, which alone could resemble the case in point. And while so much was said about the service which the Bank had done to the United States, had the Government done nothing for the Bank? Was the act of charter of no service to it? Were not fortunes made by it? Did they derive no advantage from the deposites made, and from the circulation given to their paper, by the Government? Did the Bank lend the money for the Algerine peace in cash, or was it not in stock, by which the public lost ten per cent. on the capital? Such repeated losses, he said, would be like the constant dropping of water upon a stone-would wear it out at last. [H. OF R. a resolution to make an inquiry of the Bank whether they required payment of the whole five millions. In answer to which inquiry, the Directors had declared they must be paid, and bad requested that the whole Debt might be extinguished. It must be observed, however, that, in fact, it was not to pay the Debt of the Bank that they wanted money, but to pay the expenses of Government; for the probable receipts of the present year were already appropriated to pay the Bank. By this bill, it was proposed that the Commissioners of the Sinking Fund should borrow money to discharge that De t, so as to relieve the current revenues, that they might be applied to pay the current expenses of Government. And, however painful it was to give more than six per cent. for money, they must do it, if it could not be got for less, in order to satisfy the demands of their creditor. Mr. G. then asked for the reading of the letter from the Bank. It was read. At this point, the Committee rose, and had leave to sit again. Mr. TRACY, from the Committee cf Claims, reported a bill to indemnify the estate of the late Major General Greene for a certain bond given in the late war; which was twice read and ordered to be committed to a Committee of the Whole to-morrow. Adjourned. TUESDAY, May 24. He was sorry to differ in opinion with the gentleman from Maryland, but they never differed more than upon the present question, when the gentleman supposed public credit would not suffer by this operation. He would ask the gentleman Mr. NICHOLAS, from the committee appointed if he had bought stock last night at 17s. 6d. in the to confer with a committee of the Senate on the pound, and five millions of new stock was unex-subject of their amendments to the bill from the pectedly to be created to-day, and sold, whether it would not alarm him, as likely to diminish the current value? Senate for the relief of persons imprisoned for debt, reported that it was the opinion of the joint committee that the House of Representatives should recede from their amendments, and that the bill should pass with certain other amend Where, he asked, besides, were the new funds for public creditors to rely on? The Debt was increasing on all sides, but the revenue stood still.ments. He was neither for giving a law to the Bank, nor for receiving one from it. He was for paying them, but in such a mode as was calculated to do it with sufficient promptness, and without so great loss to the public. Mr. KITTERA said they were all agreed, and therefore he could see no ground for debate. A message was received from the Senate informing the House that they had receded from their amendments to the bill respecting the erection of new ports of entry, &c.; that they had agreed to the bill for the relief and protection of American seamen; and that they had resolved that the bill authorizing the PRESIDENT to cause to be surveyed Mr. GALLATIN said, that though they seemed to the post road from Portland in Maine, to Savanbe agreed in their disagreement to the amendment nah in Georgia, do not pass. The Senate insist of the Senate, they appeared to have different ends on their disagreement to the amendment of this in view. They owed the Bank of the United House to the bill sent from the Senate, entitled States a sum of money, which they had expected" An act to regulate the compensation of clerks," the stock agreed to be created would discharge; but they were now informed it would not pay the whole, as the stock would not sell at par. The Senate, therefore, proposed that the stock should be sold for the best price which could be got for it. The gentleman from Maryland [Mr. S. SMITH] agreed that the 'Debt must be paid, yet disagreed with the Senate, and seemed to suppose that the Bank would be contented to receive two-and-ahalf millions at present. Mr. G. said, he had all along wished to pay the Bank, if they demanded payment; and, in order to know to a certainty, (for they had then no official paper before them,) he had brought forward and to which this House has insisted. The Senate also agree to the conference desired by this House on the subject-matter of the amendments depending between the two Houses to the bill, entitled An act to ascertain and fix the Military Establishment of the United States." and have appointed managers at the same on their part. DEBTS OF THE UNITED STATES. The order of the day was then entered upon on the bill providing for certain debts of the United States, and the House formed itself into a Committee of the Whole on the business. Mr. W. SMITH proposed to strike out the Se nate's amendment, authorizing the Commissioners of the Sinking Fund to sell the Bank stock and to introduce the sale of six per cent. stock under par to two millions. This amendment was objected to as not in or der, and a pretty long debate took place, chiefly on a point of order, which was at length decided by the SPEAKER, in his place, pointing out a mode of procedure, which would give an opportunity for the sense of the Committee to be fairly taken, which was by striking out certain words, so as to admit of any words being added which might be moved. Mr. GALLATIN said, the amendment proposed by the Senate authorized the Commissioners of the Sinking Fund to sell the Bank stock belonging to the United States. He had no objection to give this power to the Commissioners of the Sinking Fund, nor did he think it would be attended with any violation of public faith. There were two laws which the gentleman from South Carolina [Mr. W. SMITH] had supposed would be violated the first of these was the act which had appropriated the moneys received for dividend on the Bank stock, the property of the United States, to the payment of interest on certain loans obtained from the Bank. To remove any objection on that head it would be sufficient to make a new appropriation, to wit: of the funds relieved by the payment of that debt (which it was proposed to discharge with the proceeds of a sale of the Bank shares) to the payment of the interest of the loans alluded to, and he meant to move an amendment to that purpose. Indeed, it must strike every member of the Committee that, as they were creating no new debt, there could be no increase of interest. But another objection was made, viz: that, by the act establishing the Sinking Fund, they had pledged not only the amount of certain funds, but they had also pledged the funds themselves in such a manner as not to have a power to change those funds and substitute others in their place. In order to show where this doctrine would lead, he observed that not only Bank dividends, but the proceeds of the impost and excise duties were made, by that act. component parts of the Sinking Fund. If, said he, we cannot substitute another fund of equal amount to the dividends of Bank stock, neither can we substitute other funds instead of the revenue accruing from impost and excise, and, therefore, we cannot repeal, modify, or alter in the least any of the existing duties on imported merchandise or distilled spirits. It goes to say these duties are out of our power, so that we can neither diminish nor increase them; and the moment any alteration should be proposed in any of those acts, the gentleman from South Carolina would say, "This is a violation of public faith, for these duties are pledged to certain purposes." He believed no member of that House could seriously say that the Legislature who passed this law had ever any such int ntion as this. The creditors of the public would certainly have no reason to complain if funds to the same amount were given; and, in this case, there was in fact only a [MAY. 1796. change of form, for the amount of debt was not changed. The policy of selling Bank stock was objected to by some gentlemen. others approved of it. Whether it was sold or not would not depend apon them, but upon the Commissioners of the Sinking Fund, who were to sell it only if they thought it more advantageous to the United States than to sell the six per cent. stock. And he thought there could be no risk in leaving this power with those gentlemen. But whether it was desirable to keep their shares in the Bank of the United States was another question. If gentlemen thought it would be advantageous to keep them, he should be glad if they would inform the Committee in what those advantages consisted, and then they should be enabled to judge for themselves. On a former occasion, when the question was before them, he had given it as his opinion that no good could arise to Government from the connexion. He wished it might be recollected that he did not say a single syllable against the Bank, but acknowledged that they had done service to the Government by lending them money upon oc asions of emergency. Until he was assured that they demanded payment of the whole five millions, it was true he was against funding that sum, because he knew it was the worst possible time to borrow money; but now they have said they must have it, he was willing and desirous it should be paid them, notwithstanding that he could not help observing at that time that he did not think it was perfectly good treatment to come forward at such a time and demand, not a part, but the whole of the money advanced from time time in anticipation of the revenues of the United States. He thought, in doing this, they showed less indulgence to Government than they did to their customers in general, who obtained from time to time what answered to our loans; and he believed the Bank was not in the habit of withdrawing at once the whole amount of the discounts they had been used to make for any of their good customers. To Government they had not shown the same kind treatment-they had demanded the whole of their debt. He was told now they had changed their mind, and would take less than the whole. The letter which had been read to them did not, however, speak of a part but the whole. He was convinced the Bank wanted money, and he was willing to pay them what they wanted: but since they were asking at once the whole amount of what was due them, for his own part he saw no advantage Government had from being a stockholder of the Bank. As for the future, Mr. G. said, if the Bank had money to lend, they would lend it to Government when they could spare it, but, when scarce, they would ask for it back. They could not have requested payment at a worse time than now, although Government were a stockholder, and, therefore, they would lose nothing by selling their shares. Mr. HARPER was in hopes this discussion would have been gone through without any censure be ing thrown upon the institution of the Bank, or philippic against its Directors; but this had been done, and, believing the charges unfounded and undeserved, he would make a few observations upon them; but first he would proceed to consider the amendment itself. [H. OF R. assistance in future you must give us a consider ble part. We do not wish, however, that the Government should be embarrassed on our ace count." And, if this was their language, they were not certainly to blame. league's plan was best. He thought it better to sell stock under par than to pay a larger interest than six per cent. Whether the debt should be paid by one kind The question was in which way they should of stock or another, he would leave to be discusspay the Bank? There were three modes of pay-ed by other gentlemen. He believed his coling the debts: 1. To sell their property in the Bank; 2. To sell the six per cent. stock under par; 3. To create a stock which would sell at par, but which would bear a higher interest than six per cent. He would not stop to consider the comparative merits of these modes, he believed they depended on nice calculation. They had to decide betwixt two principles, viz: whether they would sell their Bank stock or the six per cent. stock to be created? It had been said the conduct of the Bank had been such as to warrant their breaking the connexion between that institution and Government. Mr. CHRISTIE called for the reading of the answer of the Bank Directors to the inquiry made of them by a committee from that House, respecting certain moneys due to the Bank of the United States. He called for the reading of this paper, as he believed it would completely answer every thing which had been said by the gentleman last up. With respect to the amendment of the Senate, he should certainly vote against it. [The paper was read. See ante, page 1295.] And Mr. C. declared it was an answer to all the argu ments used by the gentleman just sat down. What, he asked, had been this bad conduct of the Bank? Was it because it had lent two-thirds of its capital, and now requested to be paid? Mr. W. LYMAN believed that the Bank of the Was it because the Bank refused to lend its whole United States, considered either as a body politic funds at six per cent.? Or was it because the or as individuals, had acted perfectly fair and paBank was not able to make advances beyond two-triotic. He believed they consulted their own inthirds of its capital? He would ask if an indivi- terest, as all persons in business would do; but, dual had lent two-thirds of his capital and ad- notwithstanding this opinion of the Bank, he vances had been increased from time to time, should be for selling the shares which Governand at length pressed upon his debtor for a partment held in it, because he thought their situation of his debt, whether this conduct would have required it. been blameable? Mr. GALLATIN said, he did not blame the Bank for asking for a part, but for insisting upon the whole of the debt. They had been told, that if they sold these shares the public faith would be violated; but he believed they were not so little informed as not to know that they had a right to pay their creditors by what means they pleased. If their creditors got their money, ne inquiry would be made from whence it came. But they were told this fund was pledged solely for a particular purpose; but, he said, since that time the resources of the United States were much increased. It was, indeed, also true that the expenses of Government were increased, but the whole of our resources were pledged to our public creditors. The expenses of Government were only defrayed out of them, and the residue went to pay the interest and principal of the Public Debt; and, as the expenses of Government increased, new resources must be found. It was the spirit, and not the letter of the law, Mr. L. said, which was to be respected. Did the public creditors want more security than the resources of the United States afforded? He believed they were perfectly sat Mr. HARPER observed, it was said that the Bank called upon Government for the whole amount, because they were willing to receive five millions in part of $6,200,000. In what way do they ask this? Do they say, pay us the money? No; they say they will be contented if two millions were paid immediately. This would relieve their present wants; and, for the other three millions, they will sell it at par, or, if sold for more, they will put it to the credit of the United States. Was this conduct to be blamed, or ought it to give offence? It was said, that when they had money to spare, when they had no use for it, they lent it to the United States. But he believed this was not true; he believed the Bank had never refused to lend Government money till they had lent them six-tenths of their whole capital, to its great loss and inconvenience. He thought the Bank was a very valuable connexion for Govern-isfied. ment, and they ought to retain it. Mr. H. said, he did not know what had passed betwixt the Directors of the Bank and the Committee of Inquiry; but he believed the Directors did not express themselves in those peremptory terms which had been made use of by the gentleman from Pennsylvania, [Mr. GALLATIN.] He believed their language was, "If you do not pay us we shall suffer. We do not demand the money; we must, however, have a part or we shall be much injured; but, if you wish us to give you If the six per cent. stock could be sold at par, then the Bank stock would not be sold; but if that stock will not bring par price, the Commissioners of the Sinking Fund will be at liberty to sell the Bank stock to answer the present demand made by the Bank upon Government. When this floating debt shall have been paid the United States would be liberated from it. As to the idea of violating public faith, if they referred to the Report of the Secretary of the Treasury, it would be found he admitted the right of divert ing funds if necessity required it. He had no doubt about the principle, and was glad to see gentlemen disposed to resort to this resource. Mr. SWANWICK said, a great deal of extraneous matter was introduced into the present debate about the Bauk. The simple idea was that they had a debt to pay, and they wished to pay it in the best way. No one would doubt they ought to prefer gain to loss. It was an embarrassing circumstance that the Government appeared debtor and creditor at the same time; for, if they were borrowing money of the Bank, they might be told that it was against their interest to have much of the money of the Bank at six per cent., as more could be made of it by discounting to merchants, and, therefore, their dividends wouid be larger. This system of being debtor and creditor at the same time involved difficulties which could only be understood by men who paid particular attention to the subject; and, except gentlemen on the Committee of Ways and Means, he believed few men in that House were completely acquainted with the state of the public finances. For what gentleman on that floor, he asked, expected to be called upon this session to pay $5,000,000, and that under par; and, indeed, when the bill first passed that House, there was no idea of that kind entertained. It was said to be a violation of public faith to sell the Bank stock at all, and the gentleman from South Carolina [Mr. W. SMITH] complained that there was no restriction laid upon the Commis sioners of the Sinking Fund. He believed it was no violation of public faith to sell the Bank stock; if it were, he believed the Senate, who might be supposed to have as nice a sense of public faith as that gentleman, would not have proposed such a measure; yet they had proposed it, and he thought it was honorable to them that they had done so. [MAY, 1796. ring the recess, gentlemen would consider upon what was best to be done on the subject of taxation, as they found, by the Report of the Secretary of the Treasury, that our expenses this year would probably exceed a million and a half our receipts. Mr. W. SMITH said, as far as the remarks of the gentleman last up related to the advantages of selling Bank stock over six per cent. stock, he should not for the present notice them, but, as they related to public credit, they were entitled to some notice. He did not observe that any gentleman had shown that the public faith was not pledged. [He again referred to the laws which pledged it.] The gentleman from Pennsylvania [Mr. GALLATIN] endeavored to get over the difficulty by saying it was the amount of the funds, and not the funds themselves, which were appropri..ted; but, if he referred to the words of the act, he would find that the funds themselves were specifically pledged to the payment of the Bank, and the redemption of the Public Debt. What, then, will be the consequence, said Mr. S.? You take away the mortgage of the Bank stock, and give the creditors nothing in return. He would ask that gentleman if he had a valuable specific security from another person, and that person were to take that pledge for another purpose, and say to him, though I have taken away the fund that was pledged to you, still my estate in general will be good security for your debt, whether he would be satisfied? He certainly would not. If the Bank stock were taken away the creditor would have to rely only upon the surplus of the revenue after all other prior appropriations were satisfied; and, if there should be no surplus, then there was nothing substituted. Was not this a violation of the pledged faith of the nation? The dividends of the Bank stock, said Mr. S., were expressly and solemnly vested in the ComWith respect to the operation the selling of the missioners of the Sinking Fund for the discharge Bank stock would have to prevent future accom- of the Public Debt, and the public faith pledged módation being given to Government by the that they should so remain till the whole debt Bank, he thought they had no reason to believe was redeemed. How did the gentleman get over there would be any difference in that respect. He this? He said he would provide as much more was of opinion they would not object to leading out of the unappropriated revenues arising from the Government money as usual; but, if they imports, but there might be none. Besides, Mr. S. should refuse to lend Government money as here- said, Government had pledged specifically the tofore he should congratulate the United Stat s dividends of the Bank stock, and it was a violaupon the occasion; because (as he had frequently tion of public faith to withdraw a specific pledge observed) the too great facility in borrowing mo- for an uncertain and precarious fund. He conney was the ruin of all Governments, and be- ceived, therefore, no satisfactory answer had been cause a Government was never so truly respect-given to his objections, and that unless gentlemen able as when its revenues were fully equal to its demands. He himself was not one of the Com mittee of Ways and Means; if he had been upon that committee he might have suggested some ideas that would have been of service. It was in that committee that all the resources of the country originated. Nothing had been done this session for the revenue. They had brought forward, it was true, a system of taxation on stamps, but it had been suffered to sleep in oblivion. The important business which they had before them relative to foreign Treaties, was perhaps a suffi cient apology in part for this; but he hoped, du came forward and produced a specific substitute of equal value. these dividends could not be taken away without violating the public faith. Mr. S. had hoped the gentleman from Pennsylvania [Mr. GALLATIN] would not have charged the Bank of the United States with versatility, when he himself had so frequently changed his opinion on this subject. That gentleman was opposed to paying off the five millions required by the Bank, and spoke two hours to show the propriety of paying only $1,200,000, upon the ground that the Bank ought to continue their anticipations of the $3,800,000. He immediately after MAY, 1796.] Debts of the United States. wards came forward with a motion to appoint a committee to inquire whether the Bank demanded the money, because, if they demanded it, he would have them paid the whole. He was now opposing the sale of the stock under par, if necessary, which the Bank required. Yet, though he was himself so inconsistent, he was ready to blame the Bank for the same kind of conduct. [H. or R. the insurrection was quelled without bloodshed? He knew the gentleman from Pennsylvania [Mr. GALLATIN] thought differently; that gentleman had said the Army was not necessary on that occasion; but Congress had approved of the measure, and, moreover, had authorized the PRESIDENT to keep an Army stationed in the country. This was no proof that the PRESIDENT was not deemed justifiable in having marched the Army, and he could not have done it without the aid of the Bank. Mr. S. concluded with observing, that no satisfactory answer had been given to his argument of much rather both the Bank and the Government the public faith being violated, and that he would should suffer greater inconvenience than that a violation of their plighted faith should ever take place. The gentleman from Pennsylvania seemed but he must own that this proposition of theirs to shelter himself under the conduct of the Senate, had somewhat diminished his confidence in that branch of the Government. The Bank, Mr. S. said, had always advanced money liberally to Government, whenever it was wanted. Five millions were now due. They now What was the conduct of the Bank with respect say to Government," We cannot go on any fur- to the Algerine negotiation? They lent $800,000 ther, except you pay a part of what you owe us; towards the million loan. Indeed, they had gone we wish to have the whole, but a part is indispen-on lending to Government, until they had injured sably necessary." To raise a part of this money themselves by it; they had done it to their wrong. immediately, it had been proposed to sell two They had been obliged, by their excessive admillions of the six per cent. stock under par, if vances to Government, to abridge their discounts, necessary; this the gentleman was opposed to, which had dissatisfied their best customers, and and, as a substitute, the Bank stock which Govern- raised them up many enemies. He, therefore, ment held, was proposed to be sold at any price; thought them perfectly justifiable in requiring among other reasons, to dissolve the connexion payment of what was due to them, and that any between the Bank and the United States. He animadversion upon their conduct was altogether did not expect objections to the connexion beunjustifiable. tween the Government and the Bank of the United States from a gentleman who thought so well of and had patronised the connexion between the State of Pennsylvania and the Bank of that State. He could not see any difference betwixt the two cases. It was well known that the State of Pennsylvania held considerable property in the State Bank. The funds of that State were in a very flourishing condition, and it was thought, by some. to be partly owing to that circumstance. But, gentlemen say, the Bank of the United States had behaved improperly, and, therefore, they would have no further connexion with it. It had been Mr. VENABLE hoped the amendment would be for many years fashionable to abuse the Bank. He retained, as it would give the Commissioners of himself had formerly held some shares in it; he the Sinking Fund a greater latitude than they had been a Director; but he had long ago sold his otherwise would have, as they had disagreed to shares, and resigned his seat as a Director, and the other amendments of the Senate. As to the would have no more to do with the institution, conduct of the Bank, he thought the treatment because it was deemed by some so heinous a crime; they had shown to Government was not that kind but, when he knew that the Bank had rendered of treatment which they showed to other customuseful and great services to the United States, ers, and any man being so treated would break at a crisis when. but for the timely assistance. his connexion with it; for he was told that bankthe prompt aid of the Bank, the Government ers never discontinued the whole of their dismight have been prostrated, he could not consist-counts to merchants; and he believed that a treatently with his duty, and with his feelings of grati- ment like that which had been used with respect tude, complain, when they informed Government to Government, might destroy the most respectathey could advance no more until a part at least ble merchant in Philadelphia. of the debt was reimbursed. When the gentleman from Pennsylvania said that the Bank had demanded the money in such terms as, "We will be paid, we must be paid," he put into the mouths of the Directors a disrespectful language, with which they had never insulted the Government. They had done no more than barely state their situation. He saw no use in thus perverting their language, unless it were designed to prejudice the House against them. He wished gentlemen would review the conduct of this institution towards Government. What was their conduct when an insurrection had broken out in the country, and when the Government had not the means of suppressing it? Did not the Bank enable Government to raise a force by which When inquiry was made whether the Bank required the whole of the five millions, or whether a part would answer their present purpose, they answered they must have the whole; but now gentlemen say that two and a half millions will do for their immediate purpose. This seemed as if they were conscious of having done wrong in demanding the whole. He believed if they were to pay the Bank five millions to-day, they would lend Government half of it to-morrow. It was their business to lend money. Why did gentlemen tell them that the Bank was always doing Government favors? The United States lost $90.000 upon the $800,000 which they had lent them on account of the Algerine peace, and in paying them in six per cent. stock under par they |