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ill
LIBERTY.. ..THE CONSTITUTION. ..UNION
VOI,. XVII.
NEW BERN, FRIDAY, DECEMBER 20, 1833.
XO. 871
PUBMSHEI)
BY TII03IAS WATSON,
turms,
Three dollars per annum, payable in advance
protect them from the bank of the U. S. if by means ; same engagement, in favor of anv othpr mnn;.A i j a . i r
of its superior strenmh it soucrht to onnre them. Nor ! etitution?would ive it J?,?BS mn n" i proceeded to enlarge its discounts; and on the
REPORT
Cf the Secretary of the Treasury on the removal of
the Public Dposites from the Bank of the United
States hiade to both Houses of Congress, Dec
4th. 1833, '
Treasury Department, Dee. 3d, 1833.
Sir: In pursunnce'-of the power, reserved to th
S.-entary of the Treasury, by the Act of Congress?,
.entitled, u An act to incorporate the subscribers to thf
Rink qf the United States," I have directed that the
deposit es of the money of the United States shall not
he made hi the said Bank, or Branches thereof, but in
certain State Bnnks, which have been designated for
that purpose.' And I now proceed to lay before Con
press, the reasons which induced me to give this or
der and direction.
The sixteenth section of the law above mentioned,
i? in the following words: " And he it further enact
ed, that the deposites of the money of the United
States, in places in which the said Bank and Brartrh
es thereof may he established, shall be made in said
Bank or Branches thereof, unless the Secretary nf.the
Treasury shrill at any time Otherwise order or direct,
in which case, the Secretary ol the Treasury shall
immediately lay before Congress, if in session, and
it not, immeUiatMy alter the commencement of
the next session, the reasons of such order or di
rection." '
It has been settled by repeated adjudications, that
n, charter, granted by a State to a ' corporation like
that of the Bank of the United States, js ron tract
betw'-n the sovereignty which grants it, and the
stockhdl.lers. The same principle must ap; lv to a
cliartergranted by the United States, and consequent
ly Jhe act inco-porating the Bank is to be regarded
-.y- . uuniwiii n 111 iu uuui rss mciii. nui ; ouiuuuu. wuuiu iri e lis notes enna rppHit 0 n i . t 1 , . , w , .v- ;
ran nn Jin-,;. i l Liu r- r .v . ' n fe. i i ". Iuai creat, and make i f of Auornst. 1833. thev amounted tn ftfif icn ' c u
rkmmo ' 0 " w 1, 1 uv, J 11 u 1 11 111c uioir juaunca
Aan,; tu t . J i .... oj ,;; . uirai "i cease
x 11c language 01 mecnaner recognises uu 1 on me oru oi iviarcn, loau when the charter
Can anv distinrtinn h til-on Kctmoon 1 a t -i n n ( r nf a ; tVifm pnnnlhr pnmronmn . u J
' . , . -v... .. wuu-. . , wv..v w...wiituuui me purpose 01 commercp
no r-t onA . r C.I 1 1 I : : ; T3., Ui Ui : . : . .1 . ' . wl" ""-ILc
i,auu hit- iictiisit-r 01 uie wnoie sura remaining mi i uui mis uiuiguiiou on me United Statp will
ilannolta TU 1 CL. .1 .J ; i l QJ i . . ""-
such distinction, and the principle asserted by Mr. pires; and as soon as this happens, all the outstand"
Crawtord, wouid have led him to theremoval of the ing notes of the Bank will lose the necnlHr v'.i.J
. r .L ii- . .1 . o ! .1 : 1 ., i "u"dl value
wuuic ninuuiii 01 xne puonc money to ine oiaie j iney now possess, anu tne notes payable at di mm
ijrtijK, 11 a pressure on tne part oi tne rsanK 01 ine u.
c. had rendered such a measure necessary, in order
This sum it is believed was chiefly drawn
jm the State Banks. To fortify themselves.
349 14, being an increase of more than two I those Banks were compelled to call on their
as a contract netween the United States of the -one
part 1 n d tin stock holdess of the i, titer, and by the
pl.iin terms of this contract, as contained in the sec
tion above quoted, the stockholders have agreed, that
the power reserved to the Secretary over the depo
sites shall not be n stricted to any particular contin
gencies, hut be absolute and unconditional, as far as
their interests are involved in the removal. The or
der, therefore, ot the Secretary of the. Tier.?ury, di
reoting the public mop.cy to be deposited elsewhere,
can in no event br regarded as a violation ofthe con
tract with the stuckholders, nor impair any right sp
ca red to them by the charter. The Treasury De
partment heing entrusted with the ndniinist ration of
the finances ofthe country, it vas al-.vays the duty
ol' the Secretary, in thw absence of any legislative pro
vision on the subject, to take care that the public mo
ney was deposited in safe keeping, in the hands of
faithful agents, and in convenient places, ready to be
applied according to the wants of the Government.
The law incorporating-the Bank has reserved to him,
in its lull extent, the power he before possessed. If does
not confer on him a new power, but. reserves to him
hs ianner ; authority, without any new limitation.
Th obligation to assign the reasons for Ids direction
to iVjoositt1 the. money ofthe United States elsewhere
cannot be considered as a restriction ofthe power, be
cause the right 'of the Secretary to designate the
place of deposite was always necessarily subject to
th-.' control of Congress. And as the Secretary of
the Treasury presides over one ofthe Executive De
nartmeuts of the Government, and his -power over this
subject forms a part of the Executive duties of his of
fice, the manner in which it is exercised must be sub
ject to the supervision of the officer to whom the Con
stitution has confided the whole Executive power,
an has required to take care that the laws be faith
iullv executed.
The faith ofthe United States is however, pledged,
according to tiics terms of the section above st tted,
that the public money shall be deposited in the B 'nk,
unless "tthe Secretary shall otherwise order and
direct." And as this agreement has been entered in
to by Congress, in behalf of the United States, the
place of deposite could not be changed by a legislative
net, without disregarding a tdedge, which the legisla
ture has given ; and the money of the United States
must therefore continue to be deposited in the Bank,
until the last hour of its existence, unless it shall be
otherwise ordered by the authority mentioned in the
charter. The power over the place of deposite for
the public money would seem proDerly to belong to
the Legislative department ofthe Government ; aiu-lJ
it i nithcult to 1m tgine why the authority to with
draw n f -oiii this Bank was confided exclusively to
, the Executive. But the terms of the charter appear
to be too plain to' admit of question: and although
Congress should be satisfied that the public money
was not sale in the care of the Bank, or should be
convinced that the interest of the people of the U-
niteil States imperiously demanded the removal, yet
the passage of a law directing it to be done, would
he a breach ofthe agreement into which they have e
tered.
Assuming this to he the true construction of the
charter' of the Bank, it must be the duty of the Sec
retary ofthe Treasury to withdraw the deposites of
uit-pwmc money from that institution, whenever the
change would in any degree promote the public inter
est It is not necessary that the deposites should be
nnsaJe in order to justify the removal. The authori
ty to remove is not limited to such a contingency.
1 he Bank may be perfevtlv solvent, and prepared to
meet promptly all demands upon it. It may have
been faithful in the performance of its duties, and yet
tjV public interest may require the deposites to be with-
..i..4. iu 1 ;is iiris cauuoi oe oone wunout ine ac
tion.of this Department, the Secretary of the' Treasu
ry would betray Uie trust confided to him, if he iid
'ot cause the deposites to be removed elsewhere, when-
me cnange wouiu advance tne puniic interest.
or public convenience. The safety of the deposites,
the ability ofthe Bank to meet its engagements
iti.fij .1:... : .1.. .. i' . . . 11 .
.3 uwruiy in me pei lormancc oi lis mitigations are
only a part ofthe considerations by vhich his ju ig
menLmust he guideil. The general interest and con
venience of t fie people must regulate his cond.uct.
This principle was distinctly asserted by Mr
Crawford when he was the Secretary of the Trea
sury, eoon after the Bank obtained its charter. In a
postscript to his letter to the President of the Mechan
ics Hank of N. York, dated Feb. 13th, 1817, he says
fhe Secretary ofthe Treasury will always he die
Posed to support the credit of the State Banks, and
will invariablv direct transfers from the denosites of
the public money in aid of their legitimate exertions
to maintain thei; credit. But as the proposition ofthe
'dunk ofthe U. S. excludes the idea of pressure on its
ert, no measure of that nature appears to be necessa
fy at this time." Other passages in the correspon
lpnce of Mr. Crawford with the Banks above men
lluied might be referred to, equally indicating the
froe opinion ; and at that day no doubt seems to have
teen entertained of the power or of the duty of the
Secretary in relation to this subject. It does not ap
pear to be even suggested, that the right of remova
Upended on the solvency of the Bank, or the safety
cl lhe pulic money committed to its custody. On the
tantrary, in the passage above quoted the superior
i"iy ot the btate Banks is by no means regarded
rV tn (riVP Kim !- niktlilK inolnli n
J - ' fl"-- II IIIV llllllULllIUOiri IU tilClil.
u0rile deciares that he will give the deposites to
State BanksjOii account ol their weakness, and to
to support the State Banks in their legitimate exerci
sesto maintain their credit. ;
Thelangnage of the law -therefore and the usage
and practice ofthe Government under it, establish the
following principles.
1st. That the power of removal was intended to
be reserved exclusively to the Secretary of the
Treasury, and that according to the stipulations
in the charter, Con.Trcss!cou1d not direct it to be done.
-in. i hat the power reserved to the Secretary oi
the Treasury, does not depend for its exercise merely
on the safety ofthe public money in the hands of the
Bank, nor upon the fidelity with which it has con
ducted itself; but he has the right to remove the de
posites, and it is his duty to remove them, whenever
thppoblic interest or convenience will be promoted by
the change. ,
Taking these two principles as unquestionable, I
proceed to state the reasons which induced me to be
lieve that it was necessary for the interest and con
venience of the people that the Bank ofthe U.
States should cease to he the depository ofthe public
money
The charter of the Bank will expire according to
the existing law on the subject, on the 31 of March,
1830 ; and for two vears after the termination of the
charter, it iaau'horizei! to use the corporate nnme for
the final settlement and liquidation of the affairs and
accounts of the corporation, and for the sale and dis
position of their estate but not for any other purpose.
It is the duty of the Executive Departments ofthe
Government to exercise the powers eonferrR(j on
them, and to regulate the discretion confided to them,
according to the existing laws and they cannot he
allowed to speculate on the chances of future changes
by the Legislative authority. Perhaps there may
he cases, in which the discretion vested in an Execu
tive Department rnisrht with propriety be in some de
cree influenced by the expectation of future legisla
tion. But they must be eases in which the princi
! pies of justice, or the public interest manifestly call
lor an alteration ot the law, or where some expres
sion ofthe public opinion has strongly indicated that
a change will probably be made. But where noth
ing of the kind exists, an Executive officer of the
Government is not authorized to regulate a disc re
tion. which the la w has entrusted to him, upn the
assumption that the law will be changed.
In deciding upon the course which it was my duty
to pursue in relation to the deposites, 1 did not feel
myself justified in anticipating the renewal of the
charter on either of the above mentioned grounds.
It is very evident that the Bank has no claim to re
newal, founded on the justice of Congress. For, in
dependently ofthe many serious and insurmountable
objections, which its own conduct has furnished, it
cannot be supposed that the grant to tins corporation
of exclusive privileges, at the expense ofthe rest of the
community, tor t wenty years, can give it. a right to
demand the still further enjoyment of its profitable
monopoly. INeither could I act upon the assumption
that the public inlerest required the recharter of the
Bank ; because I am firmly persuaded that the law
which created this coporation. in many of its provi
sions, is not warranted by ihe Constiution, and that
the existence of such a powerful monied monopoly, is
dangerous to the liberties of the people, and to the
purity ol our political institutions.
The manifestation of public opinion, instead of be
ing favorable io a renewal, have been decidedly to
the contrary. And I have always regarded the re
sult of the iast election of the Peesident ofthe Unit' d
Stales as to the leclaration,ofa majority of the peo
ple, that the charier ought hot to be renewed. It is
not necessary to state here, what is now a matter of
history. The question of the renewal of the charter
va.- introduced into the election by the corporation it
self. Its voluntary application to Congress tor its
renewal of its charter four years before it expired, and
upon the eve of the election of President, was under
stood on all sides, as bringing forward thatquestion for
ncidental decision, at the then approaching election.
t was accordingly argued on' both sides, before the
tribunal ot the people, and their verdict pronounced
igainst the Bank, by the election of the candidate
who was known to have been always inflexibly; op-
iosed to it
Under thes, circumstances, I could not have been
ustified, upon i ither of the grounds aliove mentioned,
n anticipating any change in the existing laws in
relation to the Bank, as the act of Congress which
created the corporation, limits its duration to the
th'rd of March, 1836, it became my duty, as Secre-
ry of the Treasury in executing the trust confided
to me, under the law, to look to that period of time as
the te: mination ot its coniorate existence. 1 nau no
sufficient grounds tor presuming that the law would
be altered in this respect, by future legislation, and a
new charter be granted to the Bank. It was there
ore incombent upon me, in discharging mv official
duties, to act upon the assumption, that this corpora
tion would not continue in being after the time spe
cified. And in this statt of things, without reference
to the manner in which the Bank had conducted it
self, it became necessary to decide whether the depo
sites ought to remain in the Bank until the end of its
corporate life, or be removed at some earlier period.
In forming my opinion on this subject, 1 could only
inquire uhK-h of these measures would most conduce
to the public good.
It is obvious, that the interests of the country
ould tiot be promoted, by permitting the deposites of
the public money to continue in the Bank until its
charter expired. Judging from the past, it is highly
probable that they will always amount to several
millions of dol.ars. It would evidently produce se
rious inconvenienceWf such a large sum were
leu in possession of the Bank until the last mo
ment of its existence; and then be suddenly with
drawn, when its immense circulation is returning
upon it, to he redeemed, and the private depositors
removing their funds into other institutions. The
ability ofthe Bank, under such circumstances, to be
prompt in its payments to the Government, may be
well doubted, even if the ultimate satiety ofthe depof
sues could be relied urjon. B- sidss, the ririncir al cir
culating medium now in the hands of the people, and
the one most commonly used in the exchanges be-.
iweenuistant places, consist of the notes of the Bank
- . J J ' - VJ i i ,
u..i,uiuC as ujui-u ufspreciaieu as tne notes of
local Banks. And if, in the mean time, no other
currency is substituted in its place, by common con-1
cent, it is easy to foresee the extent ofthe embarrass
ment which would be caused by the sudden derange
ment of the circulating medium. It would be too
late at that time, to provide a substitute, which would
ward off the evil. The notes ofthe Bank ofthe Uni
ted btates in circulation on the 2d of September last,
which was the date of the latest return before me
when the order for removal was given, amounted to
S 18.413,287 07, scattered in every part of the Uni
ted States. And if a safe and sound currency were
immediately provided, on the termination ofthe char
ter, to take the places of these notes, it would still re
quire time, to bring it into general use, and, in the in
terim, the people would be subjected to all the incon
veniences and losses which necessarily arise from ah
unsound state of the currency. The evil would be
so great and the distress so general, that it might
even compel Congress, against, its wishes to rechar
ter the Bank,and perhaps more effectual means could
hardly be devised, for insuring the renewal of the
charter. It is evident that a state of thuigs so much
to be deprecated can only be avoided by timely prepa
ration, and the continuance ol the deposites can nly
be justified by the determination to renew the, char
ter. The State Banks can, 1 have no doubt, furnish
general circulating medium, quite as uniform in val
ue, as that which tias been afforded by the United
States Probably more so. For it is well known.
that in some ofthe cities, the Branches of the bank,
nave oeen m ine namt, whenever they thought pro
per, of refusing to honor the notes of their owli bank,
payable at other Branches, when thev were not offer
ed in discharge of a debt due to the" United States.
But a currency founded on the notes of state banks
could not be suddenly substituted for that heretofore
furnished by the Bank ofthe United States, and take
the place of it at the same moment, in every part of
the Union. It is essential that the change should be
gradual ; and sufficient time should be allowed to
suffer it to make is way by the ordinary operations
of commerce, without requiring a hasty" and violent
effort.
In this view of the subject, it would be highly
injudicious to suffer the deposites to remain in the
Bank ot- the United States, until the close of its cor
porate existence. And as they cannot be withdrawn
without the action ofthe Secretary of the Treasury,
itjmist unavoidably become .his duty, at, some period
of time, to exercise the power of removal. Laying
asi; e, therefore for the present, all the consideration's
which the misconduct of the bank has furnished, the
question presented to the Department was, how long
eonld the removal be delayed consistently with the
public interest? It is a question of time only. The
duty must be performed at some period; and could
not be altogether omitted, without justly incurring a
heavy responsibility to the community, for all The
consequences that might follow. And it is, I think.
appaient that the measure, was delayed as Ion" as
was compatible with the interest; nf thp npnnln nf 1 1 -
United States.
The monthly statement of the bank, of the second
of September last, before referred to, shows that the
notes oi tne canK and its Branches then in circula
tion amounted to $18,413.287 07, and that its dis
counts amounted to the sum of $62,653,354 59. The
immense circulation above stated, pervading every
r,iui uk-iiiiui kjinirw, huu most commonly useu
iu the business of coaimerce, between distant places,
must all be withdrawn from circulation, when the
charter expires. If any of the notes then remain in
the hands of individuals remote from the Branches at
which they are payable, their immediate depreciation
will subject the holders to certain loss. Those paya
ble in the principal commercial cities, would perhaps
retain nearly tneir nominal value ; but this would not
be the case with the notes of the interior Branches,
remote irom the great marts of trade ; and the state
ment ofthe Bank will show that a great part of its
circulation is composed of notes of this description.
I he Bank would seem to have taken pains to intro
duce into common use such a description of paper, as
it could depreciate or raise to its par value, as best
suited its own views ; and it is of the first importance
to the interests of the public, that these notes should
all be taken out of circulation before t hey depreciate
in the hands ofthe individuals who hold them, and
they ought to be withdrawn gradually ; and their
places supplied, as they retire,by the currency which
will become the substitutes for them. How long' will
it require lor the ordinary operations of commerce,
and the reduction of Jisco mts by the Bank, to with
draw the amount of circulation beforementioned, with
out giving a shock to the currency, or producing a dis
tressing pressure upon the community? I am con
vinced that the time which remained for the charter
to run after the 1st of October, (the day on which the
firpt order for removal took effect,) v as not more than
was proper to accomplish the object, with safety to
the community. And if it had depended on my
judgment, at an earlier period, I should have prefer
red, and should have taken, a longer time. Enough,
however, is yet left, provided no measures are adop
ted by the Bank, for the purpose of inflicting unneces
sary suffering upon the country. Apart therefore
from any considerations arising out of the conduct of
the Bank, and looking merely to the near approach
ofthe day when it would cease to exist, the withdraw
al of the deposites appeared to be required by the
public interest, at the time when the first order for
removal was given by this Department.
This opinion is confirmed by the ground taken in
favor of" the renewal of the charter at December
session, 1831. It was then urged that the short
period which yet remained of its corporate existence,
and the necessity of prepari ig to wind up its con
cerns, if the charter was not to be renewed, made it
proper that the question should at once be decided.
Very little more than half of that time yet remains.
And, although I do not concur in the opinions then
expressed, and believe that the application was ill
timed, and premature, yet the varguments then relied
on by many, whose judgment is entitled to respect,
afford strong grounds for concluding, that the.mea-
2;iurenow adopted is not objectionable on the score of
time, and that it the deposites were not to continue
in th? Bank until the termination of ite harter their
withdrawal could not with propriety be longer de-
and a half millions in the eight months imme
diately following the decision against them.
And so far from preparing to arrange its affairs,
i with a view to wind up its business, it seemed,
j from this course of conduct, to be the design of
the Bank to put itself in such an attitude, that
at the close of its charter, the country would be
compelled to submit to its renewal, or to bear
debtors and curtail their accommodations; and
so large a proportion of these calls are always
paid in their own notes, that to obtain 8100,000
in specie, they are probably obliged to call for
four or five times that amount. To replace tho
specie taken from them bv the Bank of theU pi-,
tod States and to provide for their own srafoty,
the State Banks, therefore, must have curtailed
all the consequences of a currency suddenly from two to three millions of dollars. On tho
1 1
deranged, and also a severe pressure for the
immense outstanding claims which would then
be due to the corporation. While the Bank
was thus proceeding to enlarge' its discounts,
an Agent was appointed by the Secretary ofthe
T reasury to enquire upon what terms the State
Banks would undertake to perform the services
to the Government which have heretofore been
rendered by the Bank ofthe United States; and
also to ascertain their condition in four of he
principal commercial cities, for the purpose of
enabling the Department to judge whether they
would be safe and convenient depositories for
the public money. It was deemed necessary
that suitable and fiscal agents should be prepared
indue season; and it was proper that time
should be allowed them to make arrangements
with one another throughout the country, in or
der that they might perform their duties in con
cert and in a manner that would be convenient
and acceptable to the public. It was essential
that a change so important in its character,
and so extensive in its operation upon the
financial concerns of the country, should not
be, introduced without timely preparation.
There was nothing in this proceeding, nor in
thcondition of the Bank, which should at that
time have produced a sudden and entire
change of its policy. For, in addition to
the ordinary receipts from bonds given on ac
count of previous importation, the season
was at hand when the cash duties on woollens
might well be expected to be very productive;
and from these two sources the receipts from
the customs were in fact unusually large and
the amount of the public deposites in the Bank
proportionably heavy. The capacity of the
Bank, therefore, at this time to afford facilities
to commerce, was not only equal, but greatly
superior to what it had been for some time be
fore; and the nature ofthe inquiry made ofthe
State Banks, confined as it was to the four prin
cipal commercial cities, showed that the im
mediate" withdrawal of the entire deoosites
from the Bank, so as to distress it, was not con-1
templated. And if any apprehensions to the
contrary were felt by the Bank, an inquiry at
this Department would no doubt have been
promptly and satisfactorily answered. And
certainly it was duty of the Bank, before it
adopted a course oppressive to the whole coun
try, to be sure ofthe ground on which it acted.
It can never be justified for inflicting a public
injury, by alleging mistaken opinions of its
own, when the means of obtaining information
absolutely certain, were so obviously within its
reach. The change was always designed to be
gradual; and the conduct ofthe Bank itself has
since compelled me to remove a portion of the
deposites earlier than was originall v intended.
There was nothing, therefore, in the inquiry be
fore mentioned, nor in the views ofthe Execu
tive Department, nor in the condition of the
Bank, which justified a sudden and oppressive
change in its policy.
The situation of the mercantile classes, also
rendered the usual aids of the Bank more than
ever necessary to sustain them in their business.
Their bonds for previous importations were, as
before stated, constantly becoming due, and
heavy cash duties were almost daily to be paid.
The demands of the public upon those engaged
in com merce, . were consequently unusually
large, and they had a just claim to the most
liberal indulgence from the fiscal agent ofthe
Government, which had for so many years been
reaping harvests of profits from the deposites
ofthe public money. But the Bank about this
time changed its course.
Bv the monthly statement
August, 1833, it appears that its loans and domes
tic bills of exchange, purchased and on hand amoun-
whole, it is a fair estimate, that the collections
from the community, during those two months.
without any corresponding return, did not fall
much short of nine millions of dollars. As
might have been expected, complaints 1 of a
pressure upon the money market were heard
from every quarter. The balances due lrom
the Stale Banks had, during the same time, in
creased from $368,969 98 to $2,288,574 19,
and from the uncertain policy of the Bank, it
was apprehended they might suddenly be called
for in specie. The State Banks, so far from
being able to relieve the community, found
themselves, under the necessity of providing
for their own safety:
A verv large proportion of the collections tf
the Bank in August and September, were in
Philadelphia, New York and Boston.
In August and Sentember. the curtailment in Phil-
adelphia, was
lit crease of deposites
Actual collections by the Bank,
Increase of public deposites in
New York,
Deduct increase of loans
Actual collections by the Banks
Curtailment in Boston,
was $717,262 45
Increase of public
deposites 46,069 88
$ 195,548 69
648,846 bt
842,395 40
$1,396,597 24
331,295 3
1,055301
Actual collections by the Bank
ofthe Bank, dated 2d
ted to
By the monthly statement ofthe
2d beptemher, 1833, they ap
pear to have been
By that ot the d of October, 1833,
they were
Reduction in two months,
By the same papers it appears that
the public deposites including
those for the redemption of the
public debt, the Treasurers
and those of the public officers,
were, in August
In September
In October
Increase ofthe public deposites
m two months
Total amount collected from the
community
$64,160,349 14
02,033,359 59
60,094,303 93
4,066,146 21
$7,599,931 47
9,182,173 18
9,868,434 58
$2,268,504 11
$6,334,650 32
ofthe United States aild it(S nnmornno Rmnoliao Th ; lnyed.
suduen withdiawal of its present amount of circula- There is, however, another view of this sub
tion, or its sudden depreciation, More any other jecl which, in my opinion made it impossible
sound land convenient currency was substituted for it, further to postpone the removal. About the
would certainly produce extensive evils, and be sen-" first of December, 1832, it had been ascertained
" i, ,1 , ivTnSSLi clVT sociely' at the present Chief Magistrate was re-elec-
toLen ted, and that hi, decision against the Bank had
States was not founded on any particular confidence lhus bfD nclloncd ,b V 1 people. At that
in its management or solidity. It was occasioned t,mp tne dlscounts oi tne l5ank amounted to
altogether by the agreement on behalf of the public 861,571,625 66. Although the issue which
in the act of incorporation, to receive them in all pay- the Bank took so much pains to frame, had
ments to the United States; and it was this pledge on now been tried, and the decision pronounced
the part of Government which gave general curren- against it, yet no steps were taken to prepare
cy to the notes payable at remote Branches. The f0J, its approaching end. On the contrary,!!
Thus upwards of six millions of dollars were
withdrawn from the business of the country by
the Bank ofthe United States, in the course of
two months. This of itself must haye produ
ced a pressure on the money market, affecting
all commercial transactions'. But the curtail
ment in the Bank accommodations of the com
munity, was much larger. The policy adop
ted by the Bank of the Untted States compel
led the State Banks to take the same course,
in self defence, and the Bank of the United
States appears to have resorted to the expedi
ent of drawing from the State Banks the bal
ances due, in specie, and tojhavejhoarded up the
article in its own vaults, ...
In August, 1833, that Bank had 'n specje .
7 1V,VU)UI I OO
In September
In October
10,207,649 20
10,663,441 51
Showing an increase of specie
" " in two months of
863d,764l3
Total collection in the three cities $2,673,031 68
It will be perceived, that it was solely through
the increase of the public deposites, that the
Bank raised balances against the State Banks
in New York and was placed in a situation to
take from them at its pleasure, large sums in
specie. And when it is considered that those
curtailments and collections ofthe Bank ofthe
United States necessarily compelled the State
Banks to curtail also, we shall be at no loss lo
perceive the cause of the pressure, which exis
ted in the commercial cities about the month oi
September. It was impossible that the com
munity could have sustained itself much Ion
ger under such a policy. In the two'suefceed
ing months, the collections of the Bank would
probably have exceeded five millions more,
and the State Banks would have been obliged
to curtail an equal sum. The reduction oS
Bank accomodations, to the amount of nineteen
millions of dollars, in four months, most have
almost put an end to the trade; and before the,
first of October, this pressure in the principal
commercial cities, had become so intense, thafi
it could not have bsen endured mtfeh longer,
without the most serious embarrassments. Ift
was then daily increasing, and from the best
information that I have been able to obtain, 1
am persuaded, thatif the public moneys received
for revenue had continued to be deposited lather
Bank ofthe U. States for two months longer, &
it had adhered to the oppressive system of pol-
icy, which it pursued during the two preceding
months, a wide spread scene of bankruptcy and
ruin must have followed. There was no alter
native therefore, for the Treasury Department,
but to act at once or abandon the object altoge
ther Duties of the highest character, woukl
not permit the latter course, and I did not hesi
tate promptly to resort to the former.
I have stated the condition of the mercantile'
classes at th time of the removal, to explain
why it was impossible to postpone it even for
a short period. Under other cirenmstances, I
should have been disposed to direct the remdv
al to take effect at a distant day, so as to give
Congress an opportunity of prescribing, in the
mean time, the places of deposite, and of reg
ulating the securities proper to be taken. It
is true, that the power given to the Secretary
of the Treasury to remove the deposites from
the Bank of the United States, necessarily car
ries with it, right to select the places where
thev shall afterwards be made. The power
of removal cannot be exercised, without placing
them elsewhere; and the right to select ts
therefore contained in the right to remove. If
; is also true, that in my judgment, as has been,
already stated, the public interest wouia nave
been advanced, if the change had taken place
at an earlier period. Yet as a few months
would in ordinary times have made no very
serious difference, and the removal had al
ready been delayeil until the meeting of Con
gress was approaching, I should have preferred
executing the measure, in a manner that
would, have enabled the Legislature to act ou
the subject in advance of the actual removal, if
it had deemed it proper to do so. But the con
duct ofthe Bank left me no choice, except be
tween the immediate removal, and its final re
linquishment, For if the measure had then been
suspended, to be resumed at a future time, il
was in the power of the Bank to produce the
same evil, whenever it was again attempted.
Putting aside, therefore, from the view of the
subject which I am now presenting, all the in
ducements which grew out of the misconducf
ofthe bank, and regarding only its approaching
end, and the intensity ofthe presstire it wa
then producing, no further delay was admissi
ble. The facts and reasons above stated, appear
to have established the following propositions:
1st. It was the duty of this Dapariment noi
to act upon the assumption that the
tive power would hereafter change the Jawu
relation to the Bank ofthe Un,dntne":
it was bound to regulate its "3
principle that the existence the corporation