United States. Congress.

Abridgment of the Debates of Congress, from 1789 to 1856. From Gales and Seatons' Annals of Congress; from their Register of debates; and from the official reported debates, by John C. Rives online

. (page 37 of 191)
Online LibraryUnited States. CongressAbridgment of the Debates of Congress, from 1789 to 1856. From Gales and Seatons' Annals of Congress; from their Register of debates; and from the official reported debates, by John C. Rives → online text (page 37 of 191)
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ine the value of this privUege and its effect
upon the interest of the community : and, in the
first place, let us have a full and accurate view



of the amount of these undrawn balances from
the establishment of the bank to the present
day. Here it is ! Look ! Read !

[Here Mr. B. exhibited a table of the quar-
terly amounts of public money in the bank,
averaging about four millions of dollars, and
equivalent to a permanent deposit, or loan
without interest to that amount.]

See, Mr. President, what masses of money,
and always on hand. The paper is covered all
over with millions : and yet, for all these vast
sums, no interest is allowed ; no compensation
is made to the United States. The Bank of
England,, for the undrawn balances of the pub-
lic money, has made an equitable compensation
to the British Government ; namely, a perma-
nent loan of half a million sterling, and a tem-
porary loan of three mUlions for twenty years,
without interest. Yet when I moved for a like
compensation to the United States, the propo-
sition was utterly rejected by the Finance Com-
mittee, and treated as an attempt to violate the
charter of the bank. At the same time it is
incontestable, that the United States have been
borrowing these undrawn balances from the
bank, and paying an interest upon their own
money. I think we can identify one of these
loans. Let us try. In May, 1824:, Congress
authorized a loan of five millions of doUars to
pay the awards under the treaty with Spain,
commonly called the Florida treaty. The Bank
of the United States took that loan, and paid
the money for the United States in January
and March, 1825. In looking over the state-
ment of undrawn balances, it will be seen that
they amounted to near four millions at the
end of the first, and six millions at the end of
the second quarter of that year. The infer-
ence is irresistible, and I leave every Sena-
tor to make it; only adding, that we have
paid $1,469,375 in interest upon that loan,
either to the bank or its transferees. This is a
strong case, but I have a stronger one. It is
known to everybody that the United States
subscribed seven millions to the capital stock
of the bank, for which she gave her stock
note, bearing an interest of five per cent, per
annum. I have a statement from the Eegister
of the Treasury, from which it appears that,
up to the 30th day of June last, the United
States had paid four millions seven hundred
and twenty-five thousand dollars in interest upon
that note ; when it is proved by the statement of
balances exhibited, that the United States, for the
whole period in which that interest was accru-
ing, had the half, or the whole, and once the dou-
ble, of these SQven millions in the hands of the
bank. This is a stronger case than that of the
five million loan, but it is not the strongest. The
strongest case is this. In the year 1817, when
the bank went into operation, the United States
owed, among other debts, a sum of about four-
teen millions and three-quarters, bearing an
interest of three per cent. In the same year,
the Commissioners of the Sinking Fund were
authorized by an act of Congress to purchase



150



ABRIDGMENT OF THE



SsaiATE.]



£anJc of the United States — Non-Renewal of the Charter.



[Febebaey, 1831.



that stock at sixty-five per cent., which was
then its market price. Under this authority,
the amount of about one million and a half
was purchased ; the remainder, amounting to
about thirteen millions and a quarter, has con-
tinued unpurchased to this day ; and, after cost-
ing the United States about six millions in in-
terest since 1817, the stock has risen about four
millions in value ; that is to say, fi'om sixty-five
to nearly ninety-five. H"ow, here.is a clear loss
of ten millions of dollars to the United States.
In 181Y, she could have paid off thirteen millions
and a quarter of debt, with eight millions and a
half of dollars ; now, after paying six millions
of interest, it would require twelve millions
and a half to pay off the same debt. By refer-
ring to the statement of undrawi} balances, it
will be seen that the United States had, during
the whole year 1817, an average sum' of above
, ten millions of dollars in the hands of the
bank, being a million and a half more than
enough to have bought in the whole of the
three per cent, stock. The question, therefore,
naturally comes up, why was it not applied to
the redemption of these thirteen millions and a
quarter, according to the authority contained in
the act of Congress of that year ? Certainly the
bank needed the money ; for it was just getting
into operation, and was as hard run to escape
bankruptcy about that time, as any bank that
ever was saved from the brink of destruction.
This is the largest injury which we have sus-
tained, on account of accommodating the bank
with the gratuitous use of these vast deposits.
But, to show myself impartial, I will now state
the smallest case of injury that has come within
my knowledge : It is the case of the bonus of
fifteen hundred thousand dollars which the bank
was to pay to the United States, in threeequal in-
stalments, for the purchase of its charter. BTomi-
naUy, this iomis has been paid, but out of what
moneys ? Certainly out of our own ; for the
statement shows our money was there, and
further, shows that it is still there ; for, on the
30th day of June last, which is the latest
return, there was still $3,550,664: in the hands
of the bank, which is above $750,000 more than
the amount of the tonus.

One word more upon the subject of these
balances. It is now two years since I made an
effort to repeal the 4th section of the Sinking
Fund act of 1817 ; a section which was intend-
ed to limit the amount of surplus money which
might be kept in the Treasury, to two millions
of dollars ; but by the power of construction,
was made to authorize the keeping of two mil-
lions in addition to the surplus. I wished to
repeal this section, which had thus been con-
strued into the reverse of its intention, and to
revive the first section of the Sinking Fund act
of 1790, which directed the whole of the sur-
plus on hand to be applied, at the end of each
year, to the payment of the public debt. My
argument was this : that there was no neces-
sity to keep any surplus^; that the revenue,
coming in as fast as it went out, was like a per-



ennial fountain, which you might drain to the
last drop, and not exhaust ; for the place of the
last di'op would be supplied the instant it was
out. And I supported this reasoning by a refer-
ence to the annual Treasury reports, which al-
ways exhibit a surplus of four or five millions ;
and which were equally in the Treasury the
whole year round, as on the last day of every
year. This was the argument, which, in fact,
availed nothing ; but now I have mathematical
proof of the truth of my position. Look at
this statement of balances ; look for the year
1819, and you will find but three hundred
thousand dollars on hand for that year ; look
still lower for 1821, and you wiU find this bal-
ance but one hundred and eighty-two thousand
dollars. And what was the consequence ! Did
the Government stop ? Did the wheels of the
State chariot cease to turn round in those
years for want of treasury oil? Not at all.
Every thing went on as well as before ; the op-
erations of the Treasury were as perfect and
regular in those two years of insignificant bal-
ances, as in 1817 and 1818, when five and ten
millions were on hand. This is proof; this is
demonstration : it is the indubitable evidence
of the senses which concludes argument, and
dispels uncertainty ; and, as my proposal for
the repeal of the 4th section of the Sinking
Fund act of 1817 was enacted into a law at the
last session of Congress, upon the recommenda-
tion of the Secretary of the Treasury, a vigi-
lant and exemplary ofiicer, I trust that the re-
peal will be acted upon, and that the bank
platter will be wiped as clean of federal money
in 1831, as it was in 1821. Such clean-taking
from that dish, will allow two or three millions
more to go to the reduction of the public debt ;
and there can be no danger in taking the last
dollar, as reason and experience both prove.
But, to quiet every apprehension on this point,
to silence the last suggestion of a possibility of
any temporary deficit, I recur to a provision
contained in two different clauses in the bank
charter, copied from an amendment in the
charter of the Bank of Epgland, and expressly
made, at the instance of the ministry, to meet
the contingency of a temporary deficiency in
the annual revenue. The English provision is
this : that the Government may borrow of the
bank half a mUlion sterling, at any time, with-
out a special act of parliament to authorize it.
The provision in our charter is the same, with
the single substitution of dollars for pounds. It
is, in words and intention, a standing authority
to borrow that limited sum, for the obvious
purpose of preventing a constant keeping of a
sum of money in hand as a reserve, to meet
contingencies which hardly ever occur. This
contingent authority to effect a small loan, has
often been used in England — in the United
States, never ; possibly, because there has been
no occasion for it ; probably, because the clause
was copied mechanically from the English char-
ter, and without the perception of its practical
bearing. Be this as it may, it is certainly' a



DEBATES OF CONGRESS.



151



Febrdary, 1831.]



Baah of the United States — Ncm-Renewal of the Charter.



[Senate.



wise and prudent provision, such as all Govern-
ments should, at all times, be clothed withj

If any senator thinks that I have exagger-
ated the injury suffered by the United States,
on account of the uncompensated masses of
public money in the hands of the bank, I am
now going to convince him that he is wrong.
I am going to prove to him that I have under-
stated the case ; that I have purposely kept
back a large part of it ; and that justice re-
quires a further development. The fact is, that
there are two different deposits of public money
in the bank ; one in the name of the Treasurer
of the United States, the other in the name of
disbursing officers. The annual average of the
former has been about three and a half mil-
lions of dollars, and of this I have said not a
word. But the essential character of both de-
posits is the same ; they are both the property
of the United States ; both permanent ; both
available as so much capital to the bank ; and
both uncompensated. Here is the statement of
the monthly amount of these secondary depos-
its, as I find them*on the bank returns ; and to
it I appeal for the verification of what I allege :

1825 1826 18S0

January, $1,543,618 |1, 393,805 $855,691
February, 1,888,764 1,434,800 1,562,841
March, 2,185,930 2,250,113 1,554,969

AprU, 1,489,934 1,638,146 1,652,841

May, 1,428,025 1,637,519 1,323,661

June, 1,532,258 2,301,587 1,346,206

July, 1,264,758 1,678,274 1,129,990

August, 1,575,492 2,032,684 875,459

September, 1,585,401 2,693,606 1,346,206
October, 2,042,345 1,753,621 1,334,081

November, 1,558,873 1,683,717 1,194,682
December, 1,576,997 2,112,097 1,616,656

I have not ascertained the average of these
deposits since 1817, but presume it may equal
the amount of that lonus of ope million five
hundred thousand dollars for which we sold
the charter, and which the Finance Committee
of -the Senate compliments the bank for paying
m three, instead of seventeen annual instal-
ments ; and shows how much interest they lost
by doing so. Certainly this was a disadvan-
tage to the bank. It would have been better
for it to have dribbled out to us one hundred
thousand dollars, instead of five hundred thou-
sand dollars of our own money, at a time. But
there are three considerations which should
prevent her from complaining : first, that it
was the bargain to pay in three years ; second-
ly, that we furnished the money ; thirdly, that
we kept up the amount in her hand. Finally,
these montlily returns show that the overdraw-
ings, for permitting which the bank has been
so much lauded, were overdrawings in name,
not in fact ; the a,mount of the money being
only transferred to another deposit, and the
money itself remaining in the hands of the bank.
Mr. President, it does seem to me that there
IS something ominous to the bank in this
contest for compensation on the undrawn bal-
ances. It is the very way m which the strug-



gle began in the British Parliament which has
ended in the overthrow of the Bank of Eng-
land. It is the way in which the struggle is
beginning here. My resolutions of two and
three years ago are the causes of the speech
which you now hear ; and, as I have reason to
believe, some others more worthy of your
hearing, which will come at the proper time.
The question for compensation for balances is
now fixing itself up here, as in England, with
the question of renewing the charter ; and the
two, acting together, will fall with combined
weight upon the public mind, and certainly
eventuate here as they did there.

4. To discredit and disparage the notes of all
other banks, by excluding them from the col-
lection of the federal revenue. — Tlxis results
from the collection— no, not the collection, but
the receipt of the revenue having been com-
mitted to the bank, and along with it the vir-
tual execution of the joint resolution of 1816,
to regulate the collection of the federal reve-
nue. The execution of that resolution was in-
tended to be vested in the Secretary of the
Treasury — a disinterested arbiter between rival
banks ; but it may be considered as virtually
devolved upon the Bank of the United States,
and powerfully" increases the capacity of that
institution to destroy, or subjugate, all other
banks. The notes of the State banks excluded
from revenue payments, are discredited and
disparaged, and fall into the hands of brokers
at all places where they are not issued and pay-
able. They cease to insulate at all the points
to which the exclusion extends. I am inform-
ed that the notes of the banks south of the Po-
tomac and Ohio, even those of the lower Mis-
sissippi, are generally refused at the United
States Branch Bank in St. Louis, and, in con-
sequence, are expelled from circulation in Mis-
souri and Illinois, and the neighboring districts.
This exclusion of the southern notes from the
northwest quarter of the Union,' is injurious to
both parties, as our travellers and emigrants
chiefiy come from the South, and the whole of
our trade goes there to find a cash market. The
exclusion, as I am, told, (for I have not looked
into the matter myself,) is general, and ex-
tends to the banks in Virginia, the two Car-
olinas, Georgia, Alabama, Mississippi, and Lou-
isiana. If this be the fact, the joint resolution
of 1816 is violated ; for, under the terms of
that resolution, there are several banks in each ,
of the States mentioned whose notes are re-
ceivable in the collection of federal revenue ;
that is to say, specie-paying banks whose notes
are payable, and paid, in specie, on demand.
Yet, in consequence of exclusion from the
United States Branch Bank, they are excluded
from all the land offices, eleven in number,
which deposit in that branch ; and, being ex-
cluded from the land offices, they cease to be
current money among the people. If a travel-
ler or emigrant brings these notes to the coun-
try, or receives them in remittance ; if a trader
accepts them in exchange for produce, they are



152



ABKIDaMENT OP THE



Senate.]



Banh of the United States — Non-Henewal of (he Charter,



[Febeuary, 1831i



" sJiaved " out of their hands, and sent out of
the country. This is a pecuniary injury done
to the northwest ; it may be more — it may be
a political injury also; for it contributes to
break the communication between the two
quarters of the Union, and encourages the idea
that nothing good can come from the South —
not even money ! This power to disparage the
notes of all other banks, is a power to injure
them ; and, added to all the other privileges of
the Bank of the United States, is a power to
destroy them ! If any one doubts this asser-
tion, let him read the answers of the President
of the Bank to the questions put to him. by the
Chairman of the Finance Oonmiittee. These
answers are appended to the committee's re-
port of the last session in favor of the bank,
and expressly declare the capacity of the fed-
eral bank to destroy the State banks. The
worthy chairman (Mr. Smith, of Md.) puts this
question: " Has the bank at anytime oppressed
any of the State banks ? " The President (Mr.
Biddle) answers, as the whole world would an-
swer to a question of oppr§^sion, that it never
had ; and this response was as much as the in-
terrogatory required. But it did not content
the President of the bank ; he chose to gO'fur-
tlier, and to do honor to the (institution over
which he presided, by showing that it was as
just and generous as it was rich and powerful.
He, therefore, adds the following words, for
which, as a seeker after evidence, to show the
alarming and dangerous character of the bank,
I return him my unfeigned thanks : " There
are very few banks which might not have been
destroyed by an exertion of the power of the
bank."

This is enough ! proof enough ! not for me
alone, but for all who are unwilling to see a
moneyed domination set up — a moneyed oligar-
chy established in this land, and the entire
Union subjected to its sovereign will. The
power to destroy all other banks is admitted
and declared ; the inclination to do so is known
to aU rational beings to reside with the power !
Policy may restrain the destroying faculties for
the present; but they exist; and will come
forth when interest prompts and policy permits.
They have been exercised; and the general
prostration of the Southern and "Western banks'
attests the fact. They will be exercised, (the
charter being renewed,) and the remaining
State banks will be swept with the besom of
destruction. Not that all will have their signs
knocked down, and their doors closed up. Par
worse than that to many of them. Subjugation,
in preference to destruction, wiU be the fate of
many. Every planet must have its satellites ;
every tyranny must have its instruments ; every
knight is followed by his squire ; even the king
of beasts, the royal quadruped, whose roar sub-
dues the forest, must have a small subservient
animal to spring his prey. Just so of this im-
perial bank, when installed anew in its formida-
ble and lasting power. The State banks spared
by the sword, will be passed under the yoke.



They will become subordinate parts in the great
machine. Their place, in the scale of subordi-
nation will be one degree below the rank of the
legitimate branches ; their business, to perform
the work which it would be too disreputable
for the legitimate branches to perform. , This
wUl be the fate of the State banks which are
allowed to keep up their signs, and to set open
their doors ; and thus the entire moneyed pow-
er of the Union will fall into the hands ofone
single institution, whose inexorable and invis-
ible mandates, emanating from a centre,
would pervade the Union, giving or withhold-
ing money according to its own sovereign wiU
and absolute pleasure. To a favored State, to
an individual, or a class of individuals, favored
by the central power, the golden stream of
Pactolus would flow direct. To all such the
munificent mandates of the High Directory
would come, as the fabled god made his terres-
trial visit of love and desire, enveloped ia a
shower of gold. But to others —to those not
favored — and to those hated — the mandates of
this same directory would be. as " the planetary
plague which hangs its poison in the sick air; "
death to them ! death to aU who minister to
their wants ! What a state of things ! What
a condition for a confederacy of States ! What
grounds for alarm and terrible apprehension,
when, in a confederacy of such vast extent, so
many independent States, so many rival com-
mercial cities, so much sectional jealousy, such
violent political parties, such fierce contests for
power, there should be but one moneyed tri-
bunal before which all the rival and contending
elements must appear 1 but one single dispenser
of money, to which every citizen, every trader,
every merchant, every manufacturer, every
planter, every corporation, every city, every
State, and the Federal Government itself, must
applji in every emergency, for the most indis-
pensable loan ! and this, in the face of the fact,
that, in every contest for iiuman rights, the
great moneyed institutions of the world have
uniformly been found on the side of kings and
nobles, against the lives and liberties of the
people.

5. To hold real estate, receive rents, and re-
tain a body of tenantry. — This privilege is hos-
tile to the nature of our republican Government,
and inconsistent with the nature and design of
a banking institution. Kepublics want free-
holders, not landlords and tenants ; and except
the corporators in this bank, and in the British
East India Company, there is not an incorporated
body of landlords in any country upon the face
of the earth whose laws emanate from a legisla-
tive body. Banks are instituted to promote
trade and industry, and to aid the Government
and its citizens with loans of money. The
whole argument in favor of banking— every ,
argument in favor of this bank— rests upon that
idea. No one, when this charter was granted,
presumed to speak in favor of incorporating a
society of landlords, especially foreign landlords,
to buy lands, build houses, rent tenements, and



DEBATES OF CONGRESS.



153



Febkuaey, 1831.]



Bcmk of the United States — Non-Remvial of the Charter.



[Senate.



retain tenanty. Loans of money was the object
in view, and the purchase of real estate is in-
compatible with that object. Instead of re-
maining bankers, the corporators may turn land
speculators : instead of having money to lend,
they may turn you out tenants to vote. To an
application for a loan, they may answer, aad
answer truly, that they have no money on hand ;
and the reason may be, that they have laid it
out in lands. This seems to be the case at
present. A committee of the Legislature of
Pennsylvania has jnst applied for a loan; the-
President of the bank, nothing loth to make a
loan to that great State, for twenty years longer
than the charter has to exist, expresses his re-
gret that he cannot lend but a limited and in-
adequate sum. The funds of the institution, he
says, will not permit it to advance more than
eight m.iUions of dollars. And whj ? because
it has invested three millions in real estate!
To this power to hold real estate, is superadded
the means to acquire it. The bank is now the
greatest moneyed power in the Union ; in the
event of the renewal of its charter, it will soon
be the sole one. Sole dispenser of money, it
will soon be the chief owner of property. To
unlimited means of acquisition, would be united
perpetuity of tenure; for a corporation never
dies, and is free from the operation of the laws
which govern the descent ■ and distribution of
real estate in the hands of individuals. The
limitations in the charter are vain and illusory.
They insult the understanding, and mock the
credulity of foolish believers. The bank is
first limited to such acqaisitions of real estate
as are necessary to its own accommodation ;
then comes a proviso to undo the limitation, so
far as it concerns purchases upon its own mort-
gages and executions 1 This is the limitation
upon the capacity of such an institution to ac-
quire real estate. As if it had any thing to do
but to make loans upon mortgages, and push
executions upon judgments ! Having all the
money, it would be the sole lender ; mortgages
being the road to loans, all borrowers must
travel that road. When birds enough are in
the net, the fowler draws his string, and the
heads are wrung off. So when mortgages
enough are taken, the loans are called in ; dis-
counts cease; curtailments are mq^e; failures
to pay ensue ; writs issue ; judgments and exe-
cutions follow ; aU the mortgaged premises are
for sale at once ; and the attorney of the bank
appears at the elbow of the marshal, sole bidder,
.and sole purchaser.

What is the legal effect of this vast capacity
to acquire, and this legal power to retain, real
estate ? Is it not the creation of a new species



Online LibraryUnited States. CongressAbridgment of the Debates of Congress, from 1789 to 1856. From Gales and Seatons' Annals of Congress; from their Register of debates; and from the official reported debates, by John C. Rives → online text (page 37 of 191)