might lose as much more. He hoped the Bank stock would be sold.

[May, 1796

if they were at liberty to do it. He believed, in that case, he should be in favor of selling the six per cent stock; but the most important objectionwas (as had been stated by the gentleman from South Carolina, Mr. W. SMITH) that these funds were pledged by law for a particular purpose. He did not rise to reply to the observations of his col league, as they had been completely answered by the gentleman from South Carolina, but to give it as his opinion that the dividends arising from the Bank stock were expressly appropriated, and could not be diverted on any account.

Mr. S. SMITH hoped the question would be taken on the amendment of the Senate. If he understood that amendment, it went to give unlimited power to the Commissioners of the Sinking Fund to sell the Bank stock, whilst they were prohibited from selling the six per cent stock under par. Some gentlemen, indeed, seemed willing to sell it at any price. Gentlemen said any other bank would lend Government money; he believed this would be foun lan error. He knew several banks whose constitution forbade the lending of their Mr. GALLATIN did not intend to have troubled money to Government; and others, he believed, the Committee again, but he found it necessary would refuse on other ground. It was not a very to notice some observations which had been pleasant circumstance to a bank to have their made. He meant not to run over all the argu names brought up in that House, as being distress-ments which had been used; he would only aded for want of money. What did the Bank of vert to the question whether, setting aside the the United States ask? They asked the payment policy of the measure, they had a right to sell the of money which was due. But gentlemen had Bank stock or not? He would not go to the report said merchants could replace notes when due, by of the Secretary of the Treasury for the construcother notes. They did not seem to understand tion of an act, but recur to the act itself. He this business. If he, as a merchant, had a note read the act, and adverting to that clause which due, he could not pay it by another note. This pledged the faith of the United States that the was an unfair calculation. If the credit of a mer- moneys or funds therein enumerated shali inviochant was bad indeed, a bank might perhaps lend lably remain appropriated," &c., he insisted that him a part of the money, from a wish to take him the meaning of the act was to pledge a certain out of the bank in the best manner they could. amount of money, and not a certain fund. It was By their large advances to Government the Bank not said that the whole fund should be approprihad been obliged to strike off one-third of their ated to such a purpose, but so much only as was customers, who had been obliged to go to the necessary to discharge such and such debts. k brokers, and pay three per cent. for discounts. was, therefore, the money arising from such a Gentlemen had said that the Bank had de-source and not the thing itself which was meant. manded the whole sum of five millions. They He did not believe it was the intention of the Lehad said, it was true, they would be glad to have gislature to mortgage the funds; it was meant it, that they might accommodate their customers. that the money arising from such a source, to such Whence, he asked, was the profit of banks de- an amount, should be appropriated for such a purrived? From their credit, from the deposites pose; and that if one sum was taken away, another made with them, which enabled them to discount must be provided. He therefore believed it was largely and to make large dividends. But he, as fully in their power to appropriate the Bank a merchant, finding the Bank pinched for money, stock to whatever purpose they pleased. And and that he could not get well served with dis- when they did it, it would become their duty to counts, took his deposites away. And where would appropriate a sum equal to the amount of the divihe then go? To the Bank of Pennsylvania. He dend which arose from the Bank stock, to the did not mean to say that this was the wish of purpose for which it was heretofore appropriated. gentlemen from Pennsylvania, but if deposites were taken from this Bank, they would go to that Bank, or the Bank of North America. If this were not the case, the Bank of the United States would divide twelve, instead of eight per cent.

He had said so much from his knowledge of the direction of banks. He believed, if they had said to the Bank that they would pay two millions at present, and desired the rest to have remained, they would have taken it. He hoped they should not sell the Bank stock, but sell two millions of the six per cent. stock, at the best price which could be got for it.

Mr. SITGREAVES said, he had heard for the first time, to-day, that it was ill usage for a creditor to ask for his money. There was no doubt about the money's being due. and all seemed inclined to pay it; the only difficulty was in what way it should be paid. One of the methods proposed was, to sell the Bank stock. He was not satisfied that it would be for their interest to do this,

It was not form, but substance, to which they were to attend. Their contract with the creditors was, that the money was to be paid; and so long as they were paid, they would have no reason to complain. In fact, there was no real want of the appropriation, except for the payment of the inte rest of the loan; yet, for fear of any mistake on the subject, he had no objection to include both. And if public faith was not violated by the sale of Bank stock, he saw no reason which ought to prevent them from selling of it.

One of the gentlemen from South Carolina [Mr. SMITH] seemed to think there was an advantage to Government in their being stockholders, and had charged him, Mr. G., with inconsistency. As to the conduct of the Bank, it was literally as he had reported it; nor had he been inconsistent with himself. In the first place, they had a bill to fund five millions. He objected to it, because the Bank had not then demanded that sum. When he was accused of a breach of faith, in not paying that

MAY, 1796.]

Debts of the United States.

[H. of R.

Mr. NICHOLAS controverted the opinion of the gentleman last up, with respect to the dividends being pledged in the way he mentioned, and was confident there was no good ground for objecting to the sale of the Bank stock on that pretence.

money, he brought forward a resolution of inqui- the Secretary of the Treasury to learn the con ry, as he had before stated. In answer to this struction of the law. Let him, then, look into the the Bank had passed the resolution now on their Journals of the House: it would be found that table, asking for the whole of the money, and he a question had been solemnly debated whether then had withdrawn his opposition. The bill had this fund should not be so tied up as not to be ap accordingly passed this House. To say that the propriated to any other purpose, and the yeas and Bank had required immediate payment for the nays taken upon it, and decided in the affirmative. whole, was not matter of conversation. It was With respect to what had been said about the officially communicated. He wished to know, willingness of the Bank to receive two millions when we asked our creditor whether he would for the present, he believed gentlemen had mis continue a part of his loans, and the answer was taken the meaning of the Directors. He believed that he requested the whole debt to be extinguish- two millions were wanted for immediate relief; ed, whether that was not a positive answer? In but that the Bank were content that the remaingiving this answer they consulted their own in-der should not be sold under par. Their wish was, terest, and that alone. Mr. G. said he had already undoubtedly, to have the whole five millions paid, been blamed for speaking his sentiments on this but knowing the great disadvantage to which it occasion, and he might be blamed again. What might put Government, they were willing to redid the gentleman from South Carolina [Mr. ceive only that sum for the present. SMITH] mean when he said he did not expect to hear the Bank blamed for loaning Government money for the purpose of suppressing the insurrection? He did not blame them for anything except for refusing to continue a part of the anticipations on loan, when they were conscious the United States had a right to their indulgence, from the advantages they drew from Government, and from the temporary embarrassments in which they were thrown by the sudden and unexpected demand of the whole. It seemed he was not mistaken, for, though not officially, it now appeared, from gentlemen who pretended to know the wishes of the Bank, that they were willing to receive a On motion, the report of the committee appointpart only. He wished they had done this at first. ed to confer with the Senate on the subject of their It was, however, in conformity to the answer re-disagreement with respect to the amendments proceived from them that the bill was now framed. posed to the bill for the relief of persons imprisoned If they had since varied their determination, no for debt, was taken up and agreed to. [As the bill one but themselves were to be charged with now stands, the plan of accommodating the laws inconsistency. of the United States to the State in which an action should be brought is done away, and an uniform plan is adopted throughout the Union, which allows no man to be imprisoned for debt, who surrenders his property and swears or affirms he is not worth more than thirty dollars. By leaving this sum it is meant that a man should not be deprived of his tools, &c., so as to render him unable to earn his future living.]

Mr. G. added, that according to the ideas he had mentioned, he would move an amendment to the amendment of the Senate, in these words:

"And such of the revenues of the United States heretofore appropriated for the payment of interest on such debts (as shall be paid with the moneys proceeding from the sale of Bank stock) shall be, and the same is hereby, pledged and appropriated towards paying the interest and the instalments of the principal which shall hereafter become due on the loan of two million of dollars obtained from the Bank of the United States, for the purpose of paying the shares of Bank stock belonging to the United States, and directed by this section to be sold."

Mr. W. SMITH observed, that by selling the Bank stock, they would apply money to one object which was expressly appropriated by law to another. [Mr. S. read the clause of the act.] It was taking away a fund which produced a certain and considerable income, and replacing it with something very uncertain. It was giving a claim upon the general revenues, after all the expenses of Government were paid, and if there should be no surplus there would be no substitute. For his part, he did not believe there would be any surplus.

The gentleman from Pennsylvania [Mr. GALLATIN] had said he should not go to the Report of 4th CoN.-47

The question was put and carried on the amendment, and then the Senate's amendnient was agreed to as amended.

The Committee then rose and reported the amendments, and the House adjourned.

WEDNESDAY, May 25.

The House resolved itself into a Committee of the Whole to indemnify the estate of the late Major General Greene, from the payment of a certain bond, for £11,297, which was said to be given on account of Government. After a few observations, it was agreed to, read a third time, and passed.

DEBTS OF THE UNITED STATES.

The House took up the amendments agreed to in a Committee of the Whole yesterday, in the bill providing for the payment of certain debts of the United States.

Mr. W. SMITH said, he wished to propose an amendment. They had agreed to the provision of the bill, he said, by which the Commissioners of the Sinking Fund were prevented from selling the six per cent. stock under par; but no provision had been made to prevent Bank stock from being sold for less than its value, which was 133 per

cent. But, as the bill now stood, the Commissioners might sacrifice the interests of the United States by selling the Bank stock at a much lower price. Indeed, there appeared an inconsistency on the face of the bill by limiting the sale at par in one case, and not in the other. If they were determined the six per cent. stock should not go under par, they ought also to determine that the Bank stock should not be sold under its value. He had made some observations yesterday, he said, upon the violation of the public faith, by selling the Bank stock; but, if the House were determined not to listen to those arguments, he trusted they would attend to the pecuniary interests of the country. At present, he said, the Bank stock yielded an income of eight per cent., and he was confident, if they were to make provision for the payment of their debt to the Bank, it would produce ten or twelve per cent. Was it then proper, he asked, was it prudent, to proceed to sell this stock at the price which he feared it would sell at? For he considered that, bringing two millions of this stock into market at once, would lower the price considerably. In order, therefore, to guard the interests of the United States, and for the sake of appearing consistent, he should move an amendment to the following effect, to follow after that of the Senate:

“Provided, That it should not be lawful for the said Cominissioners to sell any share or shares of Bank stock at a less ra.e or price than 333 per cent. advance thereon."

[MAY, 1796.

He did not think it necessary to limit the price of Bank stock. He believed the present price was 27 per cent. above par. He did not, therefore, think the price would be materially affected by the sale of the Government shares, as it was more in demand, proportionably, than any other kind of stock.

When the Bank of the United States saw the mode of payment determined upon for them, he was of opinion that, rather than lose the Government as a partner in the Bank, they would take the stock at par, which could be done without loss to them, as he was persuaded they could get that price for it, allowing time in the payment.

He had been charged, he said, with an appearance of jealousy, with respect to the Commissioners of the Sinking Fund; but he would as soon commit the Bank stock to their care as the other stock, because he was sure no sale could take place under par. The United States might buy in again Bank stock when they chose, and therefore, when he considered the whole, he could not help concluding that it would be most advisable to sell the Bank stock; and he was against limiting the Commissioners of the Sinking Fund to any particular rate of advance upon it. His arguments, he said, were founded on his zeal for public credit, and he was desirous that nothing should go out of that House which should have a tendency to injure it.

insisted that it would be a great disadvantage to the United States to sell the Bank stock, as, when this money shall have been paid, the stock would produce at least ten per cent.

Mr. S. SMITH said, the gentleman last up had a very unfortunate mode of supporting public credit. Mr. SWANWICK said, it was obvious, at first sight, He believed he had mistaken the amendment as what an amazing distinction was made between well as the bill. The amendment was, that the the stock of the United States and the Bank stock. Bank stock should not be sold for less than 33 per In one case the stock was proposed to be sold cent, above par. He had said, that it would be under par, and in the other, to be limited at even 33 injurious to the interests of the United States that per cent. above par. If the gentleman from South six per cent. stock should sell under par, and this Carolina had proposed that Bank stock should not provision went to prevent a stock which produced be sold under par or the first cost, he should wil-eight per cent. from being sold under par. Mr. S. lingly have agreed to it; but, when he fixes it at 33 per cent. premium, he calculates upon the profits of the Bank which were liable to great uncertainty. What did this stock cost the United States? It cost par. What the dividends might be, de- Mr. WILLIAMS thought the price of the Bank pended upon various circumstances. The object stock should be limited as well as the six per cent. was to pay our debts. Two millions of dollars stock. He believed there would be no Bank stock must be had; but if the six per cent. be limited at sold, as the Directors would wish the connexion par, and Bank stock be not allowed to be sold for to remain; and if not sold, it mattered not wheless than 33 per cent. above par, it would be sup- ther the price was fixed at 33 or any other sum. posed, perhaps, they had no intention to pay the If much of either kind of stock was to go into the Bank at all. In that case, they might experience market at once, it would lower the price; and if all the difficulties which the gentleman from it went much under par it would be injurious to South Carolina, yesterday, pointed out, if the stock Government-so much as was sold under par beshould not sell. It must be observed that, in making a clear loss to Government. If the amending payment to the Bank, the public must be a loser, because the stocks were low. The question was, in which they should be the greatest losers, whether in selling Government stock or Bank stock? He thought it would be less injury for the Bank stock to sell low, than the six per cents. should sell under par, as he conceived no principle so injurious to a nation as the selling of its own stock under par; when once such a principle obtains in the Government, there is no knowing where it will stop.

ment of the gentleman from South Carolina took place, the whole would work together on a fair principle; but, if the whole Bank stock was brought into the market at once, it would lower the price. If, however, the Bank could not do without their money, a question would arise whe ther they should do justice to the Bank, if the stock did not sell at the price fixed. It was yesterday said, that it was necessary the Bank should be paid; whether the demand arose from their really wanting the money, or from a principle of

MAY, 1796.]

Debts of the United States.

[H. or R.

Mr. BOURNE said, if he believed with the gentleman last up, that the Bank was a dangerous engine of Government, he should wish to sell the Bank stock; but he did not believe this. On the

gain, he knew not. He thought the amendment would put the bill into a preferable situation to that in which it was without it. This put the matter on a fair and honorable footing, and if the Bank wished to continue the connexion with Go-contrary, he was of opinion that this connexion vernment, as heretofore, its Directors would see the necessity of disposing of the six per cent stock

at par.

Mr. VENABLE said, the effect of the present amendment seemed to be intended to defeat the bill altogether. It appeared to him that, since the Bank must be paid, some sacrifice must be made, and the question was, which will be the least? If the whole five millions of six per cent. stock was brought into the market at once, he should not reckon upon its selling for more than seventeen shillings. Gentlemen did not calculate the loss which would be sustained by this; but they calculated the loss on the sale of Bank stock. He said, if Bank stock was sold at twenty per cent. above par, it would be a considerable gain; and was there not much difference betwixt doing this, and suffering the loss which must be sustained by selling the other?

had been very useful to Government; nor did he believe that gentleman could point out any Government which had been carried on without a similar connexion. The only question was, whether it was the intere t of the United States to authorize the Commissioners of the Sinking Fund to sell this stock without limitation. He believed it would not. It was his opinion that it would be more to the interest of the United States to sell the new stock even under par, than to sell the Bank stock at the price proposed. Why, then, should they not fix some price?

Mr. GALLATIN said, he knew nothing of what the Senate would do, nor was he afraid of the Bank with respect to the Government. The Bank might have an influence over individuals, but he was not afraid of its influencing Government. The amendment proposed to-day involved two questions, viz-whether it was proper to limit the sale of Bank stock to its real value; and, if proper, to determine what is that real value?

Upon the first question, the gentleman from Virginia [Mr. VENABLE] had certainly put it upon true ground. The object of the mover of the present amendment might be to prevent the Bank stock from selling low; but he believed its effect would be to prevent its being sold at all; and by doing so, defeat the purpose of the bill, and the Bank would remain unpaid; for the mover himself said, that if they gave power to the Commissioners of the Sinking Fund, to bring into market their five thousand shares of Bank stock, they would be likely to fall in price. Was not this as much as to acknowledge that they would not even bring 27 per cent. advance, which was the present price at market? And if, in the opinion of that gentleman, the very act to bring them to market, was to sink thein below 27, how could he expect that a single one could be sold at 33?

Gentlemen seemed to think the Bank had done Government a great favor by admitting it as a partner for two millions-but he believed the charter was worth the whole money to the Bank. and therefore the favor lay on the other side. If this amendment took place, the Bank stock would not be sold; and some new project must be hit upon. As it stood at present, part of the Bank stock and part of the six per cent. stock might have been sold. If any price was fixed upon the Bank stock, let it be a market price; the one now proposed was known to be considerably above it. If they meant to pay the debt, he believed they must sell Bank stock under the present rate, or new stock below par. Mr. W. LYMAN said, he had no hostility against the Bank he believed, as he said yesterday, they were not blameable for doing what they had done. They had said they could not do without the money; we must, therefore, said he, take measures to pay them; for they had a right to demand, and it was our duty to pay. But, added he, we are to consult our own interest about the way in which we will pay them. If this amendment took place, they would get nothing. Would they then be satisfied? No. This amendment, he said, was intended to defeat the amendment of yesterday. Which, he asked, was the best? He was at no loss to determine. He thought the plan which proposed the sale of the Bank stock, without limi-lions of the six per cent. stock at any price which tation of price, was the best. If he was a stockholder in the Bank of the United States, a gen tleman had said, he would get out of it as soon as possible; and if it was the interest of individuals to get out of it, it was not less the interest of the United States to do so. This was an additional motive for selling that stock. He believed Banks were very useful to commerce; but he feared them as dangerous engines of Government, and wished to get rid of the connexion. There was no fear of the price falling, as the present holders would purchase, in order to keep up the price, and they should sell their shares to advantage.

It had been represented to them that the six per cent. stock would not bring par; if it would have done so all would have been well, but the Bank had written a letter, declaring that it would not, and, therefore, that the mode proposed for their relief would not have the effect. When this letter was produced, what was then done? An amendment was introduced to sell two and a half mil

could be obtained; but, on receiving information from a gentleman who seemed to be acquainted with the wishes of the Bank, [Mr. S. SMITH,] that two and a half millions would satisfy them for the present, the amendment had been withdrawn, as, in case the six per cent. did not bring par, the Bank stock would produce the sum mentioned; keeping the same object in view all along, viz:-the paying of the Bank whatever they demand, and in the way most beneficial to the United States. If the amendment was agreed to, it would defeat the bill, for the provision to sell the Bank stock contemplated that case where the new-created stock

could not bring par; and if it so happened, Bank stock would be low in proportion, and, by the amendment, could not be sold. On the contrary, the indefinite power to sell that stock would tend to raise the price of the six per cent.

He thought this perfectly clear, and he took only what gentlemen had themselves said. If the two millions of Bank stock was brought to market, it would have an effect to lower its price, and it would become the interest, not only of the Directors of the Bank, but of all persons holding stock to prevent such an operation. How could this be done? By purchasing six per cent. at par. Take off that inducement, said he, and you take off the inducement which all stockholders and moneyed men would have to purchase six per cent. stock.

[MAY, 1796.

moneyed interests, which tended to prevent the people from having one common interest. Indeed. he thought it unconstitutional.

Mr. GILES was of opinion, that if the present proposition was agreed to, it would defeat the object of the bill. As the bill stood at present, it would be the interest of stockholders who wished a continuance of the connexion betwixt the Government and the Bank to remain, to advance the price of the six per cent. stock, so as to do away the necessity of selling any part of the Bank stock.

He was not one of those, Mr. G. said, who thought the Bank had treated the Government rudely; he believed they had treated them politely. He believed they would continue to do so, because he looked upon the Bank as the usurer, and the United States as the spendthrift; and, whenever the Government became largely in their debt, and involved in difficulty, the Bank would come forward, and say-"You owe the money, and you must pay it."

But, if they were to fix the price below which the Bank stock should not be sold, they ought not to fix it at 33; upon the mover's own principles, it was not worth it. In fixing the price thus, he calculated upon 6 per cent. stock selling at par, and Bank stock producing eight per cent., being He wished, therefore, to see the connexion beworth in proportion to the increase of interest; twixt the Government and the Bank dissolved; but this was not a just calculation. It was true, for he believed every prediction of its evil tendenthe additional interest made the stock more valu-cy had been fully verified. He would rather sell able, but not in that proportion. That rule of cal- the Bank stock at a loss, than create new stock; culating value of stock by the rate of interest and he saw no difference, with respect to its lewould apply only to a perpetual and irredeemable gality, betwixt selling the Bank stock and our annuity. On the principle of the gentleman, six back lands, or any other property belonging to per cent. stock should be worth twice as much as the United States. three per cent. Bank stock might be considered as an annuity redeemable at the expiration of its charter, at the end of fifteen years.

Gentlemen must have seen that they must either go on borrowing money, or determine to lay taxes. He believed some permanent fund must

If the six per cent. stock, irredeemable for twen-be laid hold of. He was glad they could no longer ty-three years, was not worth more than par, an eight per cent. stock, irredeemable for fifteen years, was not worth 133 per cent.

He should be against the amendment, because no evil could arise from the bill remaining in its present form, as he had confidence enough in the Commissioners of the Sinking Fund that they would not sacrifice the interests of the United States by selling the Bank stock on lower terms than the market price, except the Bank was in a situation that required,and would justify it; whilst, on the other hand, should the amendment prevail and the Bank stock not bring 33 per cent. advance, they would have no means of affording the Bank that relief which they had demanded.

Mr. Corr hoped this discussion would not consume much more time. He thought the proposed amendment would make the bill uniformly bad, and the end of the bill would be frustrated.

Mr. GILES said, he was against this proposition, because it would prevent the sale of the Bank stock. Mr. G. said, he had always been an enemy to the institution from its commencement, and he grew more and more so. He was not actuated by motives which he was afraid to avow. He apprehended evil from the institution to the Government; and he thought gentlemen needed only to take a view of the connexion between the Bank and Government for the last six months, to be convinced of its being a dangerous political engine. He thought, also, that it was a union of

borrow money in Holland; and, he believed, the present embarrassment would eventually be useful to the United States. The petty excise taxes which they had been engaged in bringing forward, would never be sufficient to answer their purpose; it was necessary, therefore, to turn their attention to some object of taxation which would prove more productive, and do now what wisdom ought to have told them to have done long ago.

Mr. W. SMITH said, whether or not the Bank had acted the part of a usurer, was to be determined; but, were the House to disagree to the present amendment, he believed they would be justly charged with being spendthrifts.

The gentleman last up, and some others, had said the Commissioners would doubtless sell the Bank stock for the market price. But these gentlemen had no confidence in the Commissioners on the former question. He believed the six per centum stock would sell for nineteen shillings, which would only be a loss of five per cent. But what was likely to be the loss on the Bank stock? He believed it probable that there would be a loss of 33 per cent., for he did not think, when the two millions should be brought into the market, it would sell above par; besides which, they should lose by the sale of it a probable increase of income of sixty or eighty thousand dollars a year. Was this circumstance not to be attended to? Were they to run this risk, because they had an antipathy to the Bank? He hoped not.