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6th. Building houses to rent or sell, and the smaller denomination, which was not 'acted erecting other structures in aid of that object. upon.'

On the first ground, the president of the The president states the , “ application was bank refers us to a statement marked G, and again renewed, and a select committee of the says it will “explain the only cases to which House of Representatives, reported in favor of this description might be considered applicable, allowing the appointment of signers, on the two of them being cases in which the board 27th of February, 1823; but there war no acrepaid the amount considered over charged, tion of the House upon it." And he refers us and in regard to the third, no application has to “pamphlet, vol. viii. No. 11. been made for any change in the form of the On the first of December, 1826, the Presioriginal loan." See said statement marked dent was instructed to endeavor to procure the No. 1.

necessary change. He says, “ he reported on To a question asked the president, whether the 27th of February, -1827, that no action on any cases of disguised loans, and domestic bills the subject would take place at that session of exchange, had come to the knowledge of of Congress, and, accordingly, the matter was the parent bank, in which the branches had referred to the committee on the offices." See received usurers interest? He replied he had Doc. 3.c. never heard of any, but made a further state He adds, " the opinion of Mr. Binney, Mr. ment, marked No. 2, in which he states that the Webster, and Mr. Wirt, the Attorney General, usual custom is to charge upon domestic bills of was taken on the subject of issuing branch exchange, the rate of interest and the rate of drafts." See Doc. 3. c. exchange, and if the sums united should ex On the 6th of April, 1827, the following comceed six per cent. it is not usury; and gives an munication was made to the board of directors: explanation in said statement.

“ The committee on the offices, to whom was On the second ground, the committee referred, on the 23d of February last, the report will submit document Number 3, and its of the president of the bank, stating the unsucinclosures, in which the cause and

origin of cessful result of the application to Congress for branch drafts will be fully seen. The presi- an alteration of the charter, which would authodent states “ the inability of the bank to fur- rize the signature of notes by other persons nish the amount of circulating medium, which than the president and cashier, report that, in it was created to supply, became apparent at an various parts of the Union, but more especially early period. In a year after its organization, the southern and western sections, there is a the directors presented a memorial to Con- constant and unceasing demand at the offices gress, dated 9th January, 1818, requesting that for the smaller denominations of notes, which it an alteration might be made in the charter, so is impossible to supply." They therefore sugo as to authorize the president and cashiers of the gest that the “discount officers should be inseveral branches, to sign the notes issued by structed to draw checks on the cashier of the those branches." See copy of the memorial hank for smaller sums than they have hitherto marked 3 A, in which it is stated " that, inas- been in the habit of furnishing: In order to much as the act to incorporate the subscrib- save the labor of preparing such checks at the ers to the Bank of the United States,' requires offices, as well for the greater security of the that the bills or notes which may be issued by bank and the community, it has been deemed order of the said corporation, -shall be signed best to prepare the blank forms of a uniform by the president, and counsersigned by the appearance, and to distribute them from the paprincipal cashier, it has been found impractica- rent bank. Such forms have been accordingly, ble to supply, in any reasonable degree, the reo devised, and are now submitted to the board quired circulation from the hank and its numer- with the recommendation of the committee, that ous offices of discount and deposite,” it is, the experiment be tried, and, if found useful to therefore, asked of Congress to permit the pre, the community, be permanently adopted.” See sitlents and cashiers of branch banks to sign and Doc. 3. c. issue bills. The application was not granted. The The document marked 4, d, is a correspond. president states the subject was resumed by an ence between the president of the bank and the other memorial, dated November 24th, 1820. See Secretary of the Treasury, on the character of copy of the memorial marked 3, 6, in which it these bank drafts, which has already been is stated, “under the charter it has been doubt-printed and submitted to Congress. ed whether the bank has power to authorize The paper marked 5, E, contains instructions the issuing of notes not signed by the president, to the branch banks as to the issue of branch and countersigned by the cashier. The labor orders. On'the 21st of April, 1827, the cashier and the time necessary to sign notes for the of the parent bank writes a circular to the re.. bank and all its branches, are much greater spective branches informing them, among other than either of those offices can bestow upon things, that the directors have “deemed it best that object; and hence the bank has been una- that blank forms of an uniform appearance ble to put in circulation a sufficient amount of should be prepared with skill and care at the notes of the smaller denominations, which the parent bank, and thence distributed to such of public most want, and which are best calculat- the southern and western offices as seem to ed to serve the interest of the bank." It then stand most in need of them, or to be able best requests that power be given to the parent bank to employ them usefully Enclosed I send you to appoint one or more persons to sign notes of a specimen of the 5 and $10 blank drafts adopt

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ed. After being numbered, registered, and it may be well questioned whether foreign coin
appropriated here to certain offices, a supply of is bullion. The Constitution gives to Congress
them will be forwarded as soon as possible, with the right to regulate its own and foreign coin
instructions to the cashier of each office to have when, therefore, the latter has a value prefixed
every four hundred drafts in succession, and as to it by law and is suffered to be used, with that
they may be wanted, filled in the order of some regulated value, in like manner with our own
one officer of the branch, by whom they must coin, it would seem not to have lost the name
be endorsed lengthwise, and about the middle and character of coin, and is made by force of
of the draft, payable to bearer, before they be law what it would be, if carried through the
signed by the president and cashier. When mint and subjected to the condition of our own
completed, they are to be furnished to the cus- I coin ; and, therefore, to deal in it as a commo-
tomers of the bank, or other persons who may dity, is calculated to disturb its legal value, and
wish to procure them. The entries respecting render at least that portion of the metallic cur-
them, both here and at the branches, are in- rency uncertain and fluctuating.
tended for convenience sake, to be analogous to, If, however, the committee have taken a
those of branch notes. Their receipt under the wrong view of this subject, so far as foreign
denomination of branch drafts, is to be similarly coin is concerned, it seems by the statement of
acknowledged by tne cashier, and in duplicate the president of the bank, to be virtually ad-
through the respective presidents. They are mitted that our own coin is not bullion, and,
besides to be reported on the weekly, state of therefore; does not come within the objects of
the office, as branch draft paper received, trade allowed to the bank by the 9th funda.
pised, and on hand.

mental rule of the charter. By reference to And whenever they may be transiter between the statement of specie sold by the bank, mark. the offices must be so noticed at the foot of the ed No. 24, it will be found that the sum of statement, like other packages.

$84,734 44 of American gold coin has been On the 7th of January, 1831, a resolution parted with. passed the board to issue drafts of the denomi The 4th case is, selling stock obtained from nation of twenty dollars. These branch orders, Government under special acts of Congress. when discharged by the parent bank, are again They have thought it their duty to present the reissued by that bank when it has no small subject to the consideration of Congress. notes of its own. The paper marked 6 F, con It is necessary here to observe, that the char. tains a statement of the amount of branch drafts ter must have intended some meaning in pro-, issued, on hand, in circulation, and the offices hibiting the bank from dealing in stocks. There from whence issued. By this table it will be is, perhaps, no subject so fruitful in speculaperceived that $10,781,635 have issued ; $3,- tions as stocks, and none which is so fluctuating 371,544 are on hand ; and $7,410,090 are in and liable to be influenced by the slightes cau. circulation.

ses, often producing ruin or immense fortunes The foregoing is a succinct history of the is in the most sudden manner. To prevent such sue of branch drafts

. Whether it can be justi- a great moneyed institution then as the bank, fied under the charter of the bank, the com- from dealing in this article, which its vast means mittee will leave to the better judgment of could raise and depress at pleasure, seems to Congress.

have been a wise provision in the charter. The The third case is the selling coin, and parti- right of the bank to acquire or sell stocks, is a cularly American coin. The attention of the special one; it must be done by virtue of a law committee was drawn to this subject by of Congress. The charter itself provided that the fact that the "General Government had, a part of its capital might be paid in the stock on one occasion, to pay the bank two pre of the Government, and such stock, particularly, cent. on ten thousand Spanish dollars, might be disposed of. But the committee which it wanted for the benefit of the navy in suggests whether this will apply to other South America. To an interrogatory put to stocks obtained by virtue of a subsequent law the President on this subject, he replied, "The of Congress, unless that law specially, conbank is authorized to deal in bullion. It buys fers the power to dispose of it. In two imporand sells bullion. All foreign coins are bullion. tant loans obtained from the Government since Their being a legal tender does not make them the charter was granted, the bank has parted the less bullion, and the bank having bought with a valuable stock; and these cases will ilthem at a premium, sells them at premium. lustrate the point now submitted to Congress. The obligation of the bank is, to pay the claims While the committee refer to the transactions of on it in coin, American coin, or legalized coin; the bank in the funded debt of the United and if the foreign coin is worth, intrinsically, or States, for the purpose above mentioned, they commercially, more than the American coin, also have in view the presentation of the subthe difference in value must be worth the dif. ject, to show not only the manner of disposing ference in specie

, and there seems no reason of that stock, but whether it was not contrary why the bank should sell its bullion any more to the express understanding with the Governthan its bills of exchange, at less than their va- ment at the time of obtaining the stocks. For lue." He then refers the committee to a cor. the loan of $4,000,000 of 5 per cents. made in respondence, marked No. 4.

1821, and the $5,000,000 of 4! per cents, made Although the bank acted under legal advice, in December, 1824, there was strong individual

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competition, at a premium for a part or the mentioned with feelings of pride, that such is the
whole, against the bank; yet, the bank had a high credit of the Government, its stock is better
preference over the individual offers, upon the than specie, and would be to the bank, in any
principle that it would be more advantageous to emergy, precisely the same.
give it to the bank at a reduced rate, and parti The committee proceed to mention the 5th
cipate as a partner, than to give it to indivi- case, which is making donations for roads, ca-
duals at a premium. This was confirmed at nals, and other objects, the amount of which is,
the Treasury. The president of the bank, in a $4,620 00, as will appear by document No. 7.
letter dated 15th December, 1824, which will Two of the largest of these items, amounting
be found among the documentary testimony, to three thousand dollars, are for turnpike
after saying he had taken the whole of the roads made, too, after the General Government
$5,000,000 loan at par, says, “and since we had declined to make appropriations for simi-
have taken the loan at par, on the distinct lar objects.*
ground of our having the means of doing it, it A question would naturally arise, whether
would be advisable, in every point of view, not the public funds in the bank, for that institu-
to sell any of the Florida loan in Boston." By tion, is expressly founded upon the principle
a statement of the amount of funded debt sold that it is necessary to, and constitutes a part
by the bank, marked No. 6, it will be seen that, of the Treasury of the United States, can be
as early as June and July, 1825, the year after appropriated to objects indirectly, by the of
it was taken, the bank began to sell this stock, ficers of that institution, when the Go-
and continued to do so, sometimes at a premium vernment directly refuses to expend its re-
and sometimes at a loss, up to the 27th day of venues on the very same objects. The com:
November, 1829, on which day they had dis- mittee have looked in vain for any authority in
posed of all but $93,925 92, and that too at a the charter to give away. the money of the
loss of $4,443 34, notwithstanding offers were stockholders. If the charter contains the pow-
made by individuals for a large amount, at a ers by which the bank is to act, and they are to
premium, and rejected by the Government, up- be strictly pursued, there is then no grant to
on the principle before stated.' The same do- make gratuities for any object whatever.
cument shows that there was, between Februa The consequences of the exercise of such a
ry, 1829, and October of the same year, sold of right, might be fraught with very great injury
the $5,000,000 Florida loan, $1,742,261, at a to the stockholders; certainly of dangerous in-
loss of $17,661 09. For this loan, the commit- terference in the rival trade of different sec-
tee are not aware of there being any offers by tions of the country, and of pernicious infla-
individuals at a premium. The same document ence upon the operations of Government.
shows, that, between February, 1826, and Fe The committee approach the last ground,
bruary, 1832, the whole of the $4,000,000 loan which is the building houses to rent or sell,,
of 5 per cents. of 1821, has been disposed of at and erecting other structures in aid of that ob-
a premium of $136,789 25. The premium paid ject. They will merely present the fact and
for which, at the time it was taken, was pro- the law, and leave the House to place their
vided for in a semi-annual appropriation of own construction upon the case.
$60,000, in the report of the 1st of July, 1821, By an extract from the minutes of the board
befored adverted to. By these operations, it of directors, communicated to the Senate on the
will be obviously perceived, that, if the bank is 12th day of March last; the following facts ap-
allowed to sell stocks acquired by special agree-pear, viz:
ments with the Government, it can secure, by “ The committee on the offices, to whom
speculations, all the advantage which the Go-was, this day, referred a letter to the president,
vernment might possess, in putting up its loans from George W. Jones, agent, dated May 23d,
to the highest bidder. It not only destroys recommending to the bank the construction of
competition, but takes the loan of the Govern- two canal basins, and the erection of warehouses
ment from other individuals, who would have around one of them, according to the plan sub-
given a premium for it, and which the Govern- mitted by him, recommend to the board the
ment refuses, because it expects to derive a adoption of the following resolution:
greater profit in another way, but in which it "Resolved,That the board approve of the for:
may be defeated, by an immediate sale of the mation of two canal basins at Cincinnati

, prou
loan, and which, if the right to sell by the bank posed by Mr. Jones; one of them to be on
is acknowledged, might have been made direct- square number fifty-five; (55,) and the other
ly to those very individuals who had just offer- to be on the square of ground between Walnut
ed a premium.” In relation to the four million and Vine streets, and Canal and St. Clair on
loan of 5 per cents. of 1821, Mr. Cheves, in his Court streets; and that he be authorised to erect
report on the 1st Oct., 1822, says: “The four forthwith, warehouses on the margin of this last
million loan of five per cents. are longer irres mentioned basin, not exceeding six in number,
deemable than any other stock of the Govern either in one block or separately, as he may deem
ment of the United States, and hence probably most expedient for the interest of the bank."
this stock is more valuable than any other stock
of the United States." He also says, “the *The president furnished this statement with
more the bank can retain of this stock, the bet-out explaining the grounds of these donations,
ter for the institution.". In the whole of which, on explanation having been particularly require
the committee most fully concur; for, it may be ed of him.

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uchode These six warehouses were built. Ited by all to be of vast control, and, if improi is beter is also understood, says the same extract, that perly directedl, of dangerous tendency, had ky inay several other houses have been built by the insinuated itself either into the management of

agent at Cincinnati; but, as they were erected the press or the direction of the Government. the li in part by contributions in labor and matcrials, This could only be done by an examination of mads by debtors to the bank who had no other means the transactions of the bank with editors and richs of payment, and, in part, by direct disburse- public functionaries. And here the committee UNA ments

, no accurate statement of, either their wish it to be distinclty understood, that they do Pelatih tumber or cost is on file. The agent has been not pretend to set up the absurd idea, that turpis instructed to specify these details, in order to editors or officers are excluded from the right complete this return.

common to the rest of the citizens, of borrowing fors În reference to the foregoing, the commit- money when and where they please, from banks

tee believe it enough, merely to quote the fol- or individuals, without being answerable, in lowing provision of the charter, to wit: “The the slighest degree, to any person whatever. land, tenements

, and hereditaments, which it But while this admission is demanded by the shall be lawful for the said corporation to hold, clear rights of the parties to whom it relates, it shall be only such as shall be requisite for its im- will not be denied, that if they obtain more mediate accommodation, in relation to the conve- favors than the rest of their fellow citizens, it nient transaction of its business, and such as is, at least, a just cause of complaint against shall have been bona fide mortgaged to it, by the bank, and however they may be innocent of way of security, or conveyed to it in satisfaction any improper or sinister connection with that of debts previously contracted in the course of institution, it does not, by any meens, disprove its dealings

, or purchased at sales upon judg, the fact, that some other influence may have ments which shall have been obtained for such been intended to operate upon their minds debte."

wholly unsuspected by them at the time. If, This closes the view of the committee on the therefore, it should appear, that these individusubject of the violations of the charter. als received larger loans than those who are its

In considering the second general head as to usual customers, that they receive these loans any circumstances of mismanagement of the without the security usually required under cirbank, your committee have fully appreciated cumstances not known in any other case, it the delicate character of some of the duties as would seem to the committee, that instead of a signed them, and the high responsibility of the complaint from those whose transactions with office of inspecting the books, and examining the bank have thus been investigated, the grievinto the proceedings of the Bank of the United ance is entirely on the other side. Whether such States.

cases do exist, the committee will leave to the It is possible that the improvements were in better judgment of the House to decide, upon the neighborhood of the real estate of the bank, the facts which they have collected, and now and are made upon the ground that said dona- respectfully submit. tions would increase the value of that real estate. It had been repeatedly alleged that the bank

în discharging that trust, they have not felt had employed its funds for the purpose of subthemselves at liberty to inquire into the private sidizing the

press, and the charge was reiterat-. concerns of any individuals

, of any denomina-ed during the debate upon the resolution aution, unless the public interest was involved in thorizing this inquiry. The attention of your their transactions with the president and direc- committee was particularly drawn to this subtors of the bank. The investigation was order-ject, at an early period of their examination, by ed by the House under peculiar circumstances, a communication from an editor of a New York and in anticipation of a debate on the renewal paper, who had been accused to a member

of of a charter of a national bank, whose annual the committee, through the president of the operations amount to two or three hundred mil- bank. The evidence relating to this case will lions of money, whose infuence extends to the be found in papers marked 8 and 9, and in remotest parts of the Union, and whose connec- which are presented the following facts:-On tion with the Federal Government gives it a the 26th of March, 1831, a Mr. Silas E. Burpublic character. Impressed with the import- rows applied to the president of the bank, and ance of the great variety of interests involved, informed him, to use the language of the preyour committee have executed the office assign-sident, that he was desirous of befriending ed them, by inquiring, generally, into the pro- Mr. Noah, and assisting him in the purchase of a ceedings of the bank, not only for the purpose share in a newspaper; and he asked if the bank of ascertaining whether its powers had been would discount the notes of these parties, ad violated or abused, to the injury of the private ding that, although as a merchant he did not and public interests of the country, but, with a wish to appear as a borrower, or to put his view to obtain information for the use of the name on paper not mercantile, yet he would, House, and to suggest, should Congress deter- at any time, do so, whenever it might be nemine to continue a national bank, such modifi- cessary to secure the bank. I do not recollect cations as the proceedings of the existing insti- (says the witness), whether he then mentioned tution would seem to have rendered necessary. the time which the notes would have to run.

Adhering to these rules, the committee be- The committee being authorised to discount lieved it entirely within their province to inquire any paper the security of which they might apwhether the ináluence of the bank, acknowledg-prove, agreed to do them. As Mr. Burrows

was going out of town, I (the president and The committee will now submit the facts in witness) gave him the money out of my own relation to the manner in which this loan has funds, and the notes were afterwards put into been disposed of, first premising that the resomy possession. They remained with me a long lution for inquiring into the affairs of the bank time, as I had no occasion to use the funds, nor was introduced into the House on or about the was it till the close of the year that my atten. 17th of February. The loan of August was retion was called to them by the circumstance duced $2,000 at its maturity, on the 10th of that a new board of directors and a new com- February last: On the 2d of March last, Mr. mittee of exchange would be appointed: the Silas E. Burrows obtained from the exchange same committee which made the loan should committee discounts to the amount of thirty. consummate it. I had seen, also, in the public two thousand four hundred and forty-six dolprints, many reproaches against the bank for lars, being the largest sum loaned on that day, lending money to printers and editors, and I and while many notes of citizens of Philadel was unwilling that any loan made by the bank phia were rejected. That the notes for $17,975, should seem to be a private loan from one of its payable in, 1832, '33, 34, '35, and '36, were officers. Having no use for the money, it paid and withdrawn by him on the 2d of March, would have been perfectly convenient to let without the knowledge of Webb and Noah, as the loan remain as it was, but I thought it right they state. On the 14th of the same month, that every thing done by the bank should al. Burrows obtained another discount from the ways be distinctly known and avowed, and, bank of $14,150, and on the 15th of the same therefore, gave the notes to the chairman of month the note of Webb and Noah for $15,000, the committee, Mr. Thomas P. Cope, who en- loaned them on the 16th of December pretered them on the books.” This is the ac- viously, and not due till June next, was paid off count given by the president himself of the by two drafts from Webb, obtained at the Unitransaction in its origin. The money, $15,000, ted States Branch Bank at New York, accom. was advanced on the 26th of March, the notes panied with the following remarks, contained bear date on the 1st of April thereafter, and in a letter to the president of the bank, dated were ten in number for fifteen hundred dollars New York, March 11th, 1832, and found in each, with the interest added on as they re- No. 9, viz: “ Although the loans to us by the spectively became due, which was on the ist of Bank of the United States are purely of a buApril and October of the years 1832, '33, 234, siness character, and made upon statements '35, 36, and amounted, with the interest thus showing the necessity of the accommodation to added, to $17,975. At the time they were en- our establishment, and of our ability to meet tered on the books of the bank, on the 2d of Ja- our payments, there can be no doubt but that nuary last, the president received the money for the enemies of the bank, as also our political them. These notes were placed on the books opponents, will endeavor to give a false colorof the bank at this time, and it will be seen on ing to the whole transaction. The loan, thougta the 2d of March they were withdrawn, as will strictly defensible, is a large one, and the appear hereafter.

On the 9th of August last, amount may give rise to the charge of indiscreafter the foregoing transaction had taken place, tionon the part of the directors. This, it is not J. W. Webb and M. M. Noah made an applica- only our duty, but our desire, to prevent, if postion to the bank for a loan of $20,000, accom-sible; and, therefore, with some little inconve. panied by a letter from a gentleman formerly a nience to ourselves; we have made arrangedirector of the Bank of the United States, to the ments to pay the note of $15,000 inthe course president of the bank, in the following words: of a few days. * I cheerfully forward the enclosed as request The evidence of the president of the bank ed. I see no reason against this application explains the character of these various loans and being treated as a fair business transaction.”- the circumstances which induced him to be sa This was accompanied with sundry letters of tisfied with the security, and to make these adWebb and Noah, and the depositions of per-vances; which, together with all the testimony sons in their service as to their solvency and and correspondence on this subject, will be ability to pay the loan requested, all of which found in the papers marked No. 9. will be found marked No. 9, This loan, at six In that evidence it is stated, by the testimony months, was granted, with no other security of Webb and Noah, that they knew nothing of but that which is just mentioned, the largest the first 15,000 dollar loan made by the pres loan made on that day. On the 16th of Dedent of the bank to Burrows; that Burrows cember following, another application was made them believe the $15,000 were loaned to made, by these same parties, for a loan of Noah by his father, and that he had his fa $15,000, which was granted, for six months, by ther present to carry on that transaction, and the exchange committee, without any addition- for which loan Noah allowed Burrows 21 per al security or recommendation. At this time, cent., and did not receive it all for some months there was a considerable pressure in the money after giving his notes ; that the notes were dismarket, and many notes of the citizens of Phi- counted by the bank, in their names, without ladelphia were rejected. It was one among the their knowledge, and paid off in the same way. largest loans of the day. These loans, together It will appear by the testimony of Mr. Webb, with the loan made in March to Burrows, that the paper of which he is the editor, made amounted to the sum of $52,975, which con- two publications in the latter part of 1829, fasisted of notes drawn and endorsed by the edi- vorable to the establishment of branches ; that tors only.

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