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 124 of 199)
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 124 of 199)
Font size
QR-code for this ebook

ever power is conferred on the Secretary, Mr.
F. should move, at a proper time, to amend
the hill by striking out the words " the Secre-
tary of the Treasury," in the first line of the
first section of the bill, and inserting, in lieu
thereof, " the President of the United States ; "
so that the authority intended to be conferred
should at once be conferred on the functionary
by whom it is claimed, and under whose
direction and control, even if the bill passed in
its present shape, it would be exercised. Mr.
F. had nothing to conceal; he had always
found a straight-forward course the safest, and
certainly the most honorable. He wished to
see if Congress was disposed to yield to the
Executive the power it had claimed ; and, if
so disposed, he hoped it would be expressed
in plain, intelligible language ; he wanted
nothing uncertain, nothing equivocal. Let
not gentlemen seek to obtain, by indirection,
that which they will not openly advocate. If
they intend to yield this power to the Presi-
dent, as they certainly will by the passage of
this bill, let them say so, that the people may
understand it ; though against such a concession
of power, as well as against the claim set up
to it, Mr. F. took occasion, before this House
and this country, in language now consecrated
by authority, to enter his " solemn protest."

Mr. F. had objections to some other of the
details of this bill. During the discussion of this
great subject, the public deposits, he had heard
some very powerful appeals made to the friends
of State rights. He said he was not only sus-
pected of belonging to that class, but he was
proud to avow it ; and whenever he heard a
call made upon the State-rights men, that call
would meet a prompt response. It was under
the principles which he had learned in the
State-rights school that he felt himself called on
to oppose the fourth section of the bill. He
begged the attention of the House to the pow-
ers proposed to be conferred by that section
on the Secretary of the Treasury. The section
is in these words :

" That any bank selected and employed under the
provisions of this act, as a place of deposit of the
public money, shall furnish to the Secretary of the
Treasury, from time to time, as often as he may re-
quire, not exceeding once a week, statements setting
forth its condition and business, as prescribed in the
foregoing section of this act, except that such state-
ments need not, unless requested by said Secretary,
contain a list of the stockholders, nor the number of
shares held by each, nor a copy of the charter.
And the said banks shall furnish to the Treasurer of
tlio United States a weekly statement of the condi-

tion of his account upon their books. And the
Secretary of the Treasury shall have a right, by him-
self, or an agent appointed for that purpose, to in-
spect such general accounts in the books of the bank
as shall relate to the said statements : Provided,
That this shall not be construed to imply a right of
inspecting the account of any private individual or
individuals with the bank."

It would be remarked, Mr. F. said, that these
were not among the conditions which the Sec-
retary was required to make with the banks ;
but positive requisitions, proposed to be made
a law of this Government, on the banks which
should be employed. The bank selected " shall
furnish to the Secretary of the Treasury state-
ments setting forth its condition and business,"
&o. Here is nothing like an agreement ; it is
imperative. It is the language of command.
It is the language of law. True, there was no
penalty attached to a failure or refusal to com-
ply with such requisition ; but, once admit the
right of Congress to make the requisition, and
the riglit to prescribe a punishment for the
violation follows as a necessary consequence.
And where, demanded Mr. F., did Congress
derive the right to make these requisitions of
corporate bodies, existing under the authority
of the States ? He denied that any such right
existed ; and it was the imperious and especial
duty of those who were for preserving and pro-
tecting the rights of the States to resist, at the
threshold, such assumption of power.

There were some other provisions of this bill
which Mr. F. could not pass over without at
least a slight notice. By the ninth section it
was provided, among other things, that, in the
recess of Congress, the Secretary of the Treas-
ury may, under certain circumstances, withdraw
the public money from the banks in which it
shall be deposited ; in which event it shall be
his duty to " report to Congress, at the com-
mencement of its next session, the facts and
reasons which have induced such discontinu-
ance. This power of withdrawal was, under
the new theory, to be exercised entirely under
executive discretion and direction ; and Mr. F.
hoped that the same amendment which he had
suggested to a previous part of the bill, that of
inserting the President instead of the Secretary
of the Treasury, would also be made here.
For, if the bill should pass in its present shape,
and the President should order a withdrawal
of the deposits from any of the banks, for rea-
sons which he might not feel willing to have
too closely examined, and should, therefore,
forbid the Secretary of the Treasury from com-
municating the reasons to Congress, how could
this requisition be enforced? The Secretary,
although willing to comply with the law, would
know that his disobedience of the President's

order might subject him to the removing the

" reforming " process— and we shall not always
find ofiicers who will perform their duty and
incur the penalty. Mr. F., therefore, submitted
to gentlemen the utter uselessneas of making
requirements which the very passage of the bifl



H. OF E.]

Local Banh Deposit Regulation BUI.

[June, 1834.

containing them, taken in connection with other
occurrences, would amount to a virtual acknowl-
edgment that they could not enforce.

Mr. F. was decidedly opposed to the tenth
section of the bUl. That section provides
"that, until the Secretary of the Treasury
shall have selected and employed the said banks
as places of deposit of the public money, in
conformity with the provisions of this act, the
several State and District banks, at present
employed as depositories of the money of the
United States, shall continue to be the depos-
itories aforesaid, upon the terms and conditions
upon which they have been so employed."
Mr. F. would here remark, that if the Secretary
6f the Treasury, or rather the President, had
the power of depositing the money in the local
banks, as had been done, and the power of en-
tering into the contracts which had been execut-
ed, the contracts made with those banks were
already legal ; it required no act of Congress
to give them validity ; and he could but regard
this proposition as indicating some misgiving,
on the part of the committee, as to the legality
of these transactions. Mr. F. objected to the
provisions, because he considered them illegal,
and was opposed to thus giving the sanction of
Congress to unauthorized acts of public officers.

But Mr. F. would not longer detain the House
with an examination of the details of the bill.
He had only to repeat, what he had already
frankly stated, that he could not vote for a law,
in any shape, to deposit the public money in
State banks, during the continuance of the
United States Bank charter, provided the United
States Bank was able to comply with its con-
tract for the safe-keeping and transfer of the
public money. Were he to do so, he should
consider himself as sanctioning, not only what
he regarded a violation of the plighted faith of
the Government, but also a violation of the law
of the land. The President had openly announc-
ed to the world, that the act of removing the
deposits was his own ; he assumed the respon-
sibility ; and, for one, Mr. F. could not consent
to share it with him ; he would, in no way,
sanction or ratify the proceeding. Be the con-
sequences what they may, he would have neither
part nor lot in the matter.

Mr. Wilde said : In brevity he hoped to rival
the honorable chairman of the Committee of
Ways and Means, ( Mr. Polk ; ) in close ad-
herence to the subject, he aspired, if possible,
to surpass him. There were times, he thought,
when the gentleman discussed the Bank of the
United States rather than the deposit banks.
It was, perhaps, difficult to separate them ; and
sometimes expedient to bespeak favor by flatter-
ing prejudice and odium. Party tactics seemed
to consist in directing all your strength against
what are supposed to be the weak points of
your adversary, taking no care of your own.
Accordingly, the Bank of the United States,
though ^ready slain, as we are told, by the
Hero, is daily reslain by the humblest of his
followers, while the pet banks and Post Office

are left to shift for themselves. The gentle-
man had done him the honor to advert to some
remarks of his during a former discussion. This
topic, from the manner in which it had been
treated, required no reply. Mr. W., at the
time referred to, had expressed plainly what he
felt strongly, but having said what he thought,
was too fond of his own repose to harbor ill-will
to any one. If the gentleman had satisfied his
conscience on the occasion in question, by the
belief that he was merely performing an honest
act of public duty, Mr. W. would be the last to
disturb its tranquillity.

The House had voted —

That the Bank of the United States ought
not to be rechartered :

That the deposits ought not to be restored :

That the deposits in the State banks ought
to be regulated by law.

This bill, then, is the regulation proposed;
the sanction of the Secretary's act ; the adoption
of the executive policy ; the legislative recogni-
tion and approval of the President's experi-
ment. This, we have heard from high authority,
is the only measure of relief the country need
expect. As to the people, indeed, we are
assured their distresses are imaginary. They
only require to be relieved of the panic-makers.
The approaching adjournment will do that.
" The Government," feeling no distress, (except
in the Post Office,) can get on without this bill,
having the custody of the treasury already.

This assurance is consolatory. But why,
then, must we be goaded to its adoption ? The
spirit of party, he hoped, might be satisfied
with the implied, equivocal, negative sanction
we have given to the past by only not con-
demning it. Shall we be urged — would it be
prudent to urge us farther? If we pass this
bin, we make all that has been done our own.
There are reasons for acting on it definitely,
however. All sides of the House feel that.
The country is tired of evasions. The friends
of the administration are, in some degree,
pledged to pass it through this body. They
wUl do it the more readily, because it is sure
to fail in the other. They desire the Senate
shall reject it, so as to incur the odium of defeat-
ing a measure which is to put an end to cor-
ruption, and give us a better currency than the
United States Bank. Every true believer ex-
pects the fulfilment of the prophecy with impa-
tience. If the Senate will not pass it, the pre-
diction cannot be falsified.

Besides, the state of parties may change.
Responsibility assumed, may be enforced. The
custody of the treasury, with our friends in
power, is safe and easy. Rendering an account
of its seizure and deficit, to our adversaries may
be less pleasant. On the other hand, the op-
position may desire to see the administration
commit themselves and their friends to this
measure. They may hope, if it passes, that
the Senate will amend it, and send us something
better. Perhaps they deem the worst measure
which the Government can adopt better than



JoME, 1834.]

Local BaiM Deposit Regulati&ii Bill,

[H. OP K.

perpetual inactivity and subterfuge. Before
it passed, however, he wished to point out a
few errors and defects in its provisions, some
of which its friends, if they regarded their own
principles and pledges, were bound to remedy.
He did not propose to treat the subject in detail,
but to examine its main features. "What the
members of the House desired, at this stage of
the session, was not an argument in form, most
logically prolix, but facts and hints, the mate-
rials for thought, out of which each man for
himself would virork out his own conclusion.

In the first place, he thought the selection of
banks, to be employed as depositories, might be
made, and ought to be made by Congress. He
did not perceive any insuperable difiSculty, and
nothing less should prevent it. The committee
themselves admitted there could be no objec-
tion to that mode, provided it be deemed prac-
ticable to make the selections in such a manner
as to protect and preserve the public funds.
And why not practicable ? Have we not the
same sources of information as the Secretary ?
Where are the returns of the State banks?
Cannot we invite further information ; raise a
committee ; or take any other measure that
may be requisite ? Which do we distrust, our
integrity or our discretion? Why must we
delegate this important power and duty to the
Secretary? Are we invited to stultify or to
stigmatize ourselves ? For his own part, said
Mr. W., if there must be a selection, he would
not surrender the right of Congress to make it.
He feared giving it up might be construed into
an admission of the President's claim to the
custody of the public money. He did not mean,
by any act of his, to lend the least sanction to
the doctrines of the protest, text or gloss. He
did not intend to discuss those doctrines. Time
would be wanting. On that topic, if the gen-
tleman fi'om Tennessee was not satisfied with
the arguments of the distinguished Senator from
Massachusetts, (Mr. Webster,) he must leave
him to discuss the matter with his own friend,
the gentleman from Virginia, (Mr. Wise.)

Mr. Wilde next objected to the bill, that it
required no compensation from the State banks
for the use of the public money. The Bank
of the United States paid the nation for the
privileges it enjoyed. The bonus distributed
over the period of its charter was equivalent
to eighty or ninety thousand dollars annually,
and now it is proposed to give gratuitously to
the State banks what the United States Bank
had only by paying for it.

Some gentlemen there, Mr. W. said, would be
surprised to learn that this bill contained no
security against the dangers of foreign capital
and foreign influence. They had heard much
of the mischiefs arising from these causes in the
Bank of the United States, and he certainly
expected that one of the first propositions in
the regulation of the State banks would have
been the exclusion of all those any part of
whose capital was owned by foreigners. But
the bill contained no such provision. It was

not for him to offer any amendment of that
kind. His opinion had been already expressed.
The benefit arising from the employment of for-
eign capital, he believed, was mutual. We
have the use of the money which we want, and
the lenders the interest which they want. As
to foreign influence, he thought the danger
imaginary. The action and reaction must he
equal. When we have borrowed their money,
it is their interest we should prosper, and we
have security against them for the peace. But
it did appear to him that, if gentlemen
intended to be true to themselves, if they
meant to be thought earnest and sincere in
their oftentimes-repeated denunciations of for-
eign capital, now was the time to prove their
sincerity. If there was danger in the Bank of
the United States, where foreign stockholders
have no vote, how much more must there be
in State banks, many of which are under
no such restriction? Neither can we be as-
sured that the Secretary of the Treasury will
make such a selection as to exclude banks with
foreign capital ; for in one of the banks already
selected, he was informed, a foreign nobleman
was one of the largest stockholders. In another
State the whole capital of a bank has been
raised by foreign loan ; and, if he was rightly
informed, that loan was secured by a mortgage
of the real estate of the stockholders.

A provision which he did think ought to
be inserted in the bill was one to distribute the
amount of deposits, and limit the use of trans-
fer checks. If the use of the public treasure
must be granted to the State banks gratuitously,
the banks of all the States should share the
benefit with something like equality. Why
should the banks in New York or elsewhere
have an advantage in this respect? He men-
tioned New York with no invidious feeling,
but merely because the largest amount of reve-
nue being collected there, the banks of that
State would have the largest amount of de-
posits, unless they were required to be distrib-
uted. AYhy should "Virginia, and Ohio, and
North Carolma, and Georgia, be excluded from
their fair proportion of that fund to which they
contributed their fair proportion? He was not
prepared to say that a very exact distribution
could be effected, but a rule might be found,
in the representative population of the States,
sufficiently near for justice and convenience.

As to transfer checks, if the abuse of them
were not limited, every bank employed would
be at the mercy of the Secretary, and an un-
bounded field of favoritism and corruption
would be opened.

Mr. W. would draw the attention of gentle-
men to another omission in the bill. It not only
failed to provide for any examination of the
State banks coextensive with that to which
they insisted the Bank of the United States
ought to submit, but it failed to provide for
any examination by Congress at all. How
gentlemen who maintained the power of a com-
mittee of Congress to make a secret inquisito-



H. OB R.]

Local Bank Deposit Regv^ion Bill.

[JcKE, 1834.

rial scrutiny into the individual accounts and
private correspondence of the Bank of the
United States could reconcile it to themselves
deliberately to give up all right to order any
examination whatever of those State banks to
which the public money is to be lent gratu-
itously, in such proportions as the Secretary
may direct, it was not for him to conjecture.
By the bill, as it stands, the Secretary may
examine or appoint an agent to examine, but
Congress would have no power to appoint a
committee for any such purpose. He respected
the sanctity of private correspondence ; he
approved the inviolability of individual ac-
counts secured by this bill. The provision was
a bitter commentary on the conduct of the gen-
tleman's own party ; for if the individual ac-
counts and private correspondence of the State
banks were to be sacred, why not those of the
Bank of the United States ? A committee of
the gentleman's friends had reported resolutions
to attach the president and directors of the
Bank of the United States for asserting the
principle ingrafted on this bill, and the gen-
tleman sustains that report and this provision.

Mr. "W". desired private rights should be care-
fully respected, but he was not willing Con-
gress should be deprived of all power to exam-
ine into the condition of the selected banks.
With respect to the Treasury, the Executive
had indeed almost become a unit, and Congress
a cipher ; he would not make it utterly so.

The next objection to the bill was, Mr. "W.
said, to his mind, a capital one. The selected
banks were not required to receive each other's
paper, even for duties or debts due the Govern-
ment. The consequences were inevitable ; a
multiplicity of local uncurrent currencies, each
circulating only in its own narrow circle, and
stagnating everywhere else, all depreciated in
comparison with coin, and unequally depreci-
ated with reference to each other. A paper
receivable everywhere at par is to cease, and
duties collected in an unequally depreciated
medium are no longer to be uniform, in despite
of the constitutional injunction.

That part of the bill which provided that the
Secretary, for sufficient cause, might remove
the deposits during the recess, and assign his
reasons to Congress, wanted explanation. It
was not said what was to be the effect of Con-
gress approving or disapproving— what was to
be the consequence if one House approved and
the other disapproved. The clause is like that
of the sixteenth section of the charter of the
Bank. of the United States. If the meaning of
it is that, unless Congress approve, the act of
the Secretary is annulled, then we may save
ourselves all further trouble. The construction
of the sixteenth section must be the same, and
Congress have not yet approved the act of the
Secretary in removing the deposits from the
Bank of the United States. Of course, they
must go back again, and this bill is unnecessary.
If this is not to be the construction, what is it ?
That the act of the Secretary, not being ap-

proved by Congress, or being approved by one
House and disapproved by the other, shall
nevertheless stand good ? Or is it that the Sec-
retary shall merely report his facts and reasons
and there the matter ends — Congress having
nothing to do with the facts and reasons re-
ported, but to listen to them ? Will the gentle-
man favor us with a true interpretation?
When Mr. Wilde had taken his seat,
Mr. Gordon said that it was due to that por-
tion of the House who were opposed to the
recharter of the United States Bank, and who
nevertheless, disapproved of the course of the
Executive in removing the deposits, that some
of their number should submit a plan which
should be conformed to their views of this very
important question. It seemed to be a point
given up, that the present Bank of the United
States was^ot to be rechartered ; and that, so
far as the action of that House was concerned,
the deposits were not to be restored to the cus-
tody of that institution; and a scheme had
thereupon been devised, which seemed as un-
satisfactory to the friends as to the opponents
of the measure, by which the public money had
been withdrawn from the bank. It was said
to be the opinion of the President that it was
extremely desirable the revenue of the United
States should be collected in specie and not in
paper ; and in connection with which opinion
the House had heard a new name applied to
specie : it had been called " Jackson money."
He now called upon all who were in favor of
"Jackson money" to go with him in sapport
of the old-fashioned, constitutional notion of a
hard-money Government. His object was to
disconnect the Government entirely from the
system of banks, whether State or federal. It
must be obvious to every man acquainted with
the times, that the country could not get on
with its present paper circulation. The Bank
of the United States, the great federal monster,
closed its doors against all investigation of its
concerns ; and to rely upon such an institution
was to sap the foundations of public liberty.
The advocates of the State banks could not
propose a system that was satisfactory even to
themselves. All attempts to control State banks
were contrary to "the constitution. All the
House could do was to restore the public de-
posits to the authority of the Treasurer of the
United States. They had no right to commit
their funds to the State banks ; they formed
an instrument of power which he should be
very sorry to see put in the hands of the Gov-
ernment. The country was in a very unfor-
tunate condition. An interminable war had
been declared by the President of the United
States against the Bank of the United States;
but who could doubt that a very different
state of things would have taken place if the
bank had thrown its vast power into the aid of
the Executive! And should he succeed in
substituting any combination of banks in its
stead, and consequently in obtaining a control
over their interests, it could not but prove a



Jdse, 1834.]

Death of Lafayette.

[H. OP E.

most dangerous instrument in the hands of any
Chief Magistrate. It would enable him to tam-
per with the pecuniary affairs of the States ;
and though its management might require more
address than would be requisite to attain the
control of a single institution, yet the conse-
quences would be equally dangerous, to the
security of liberty. Whichever way the friends
of a limited and constitutional Government turn-

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 124 of 199)