USA > Pennsylvania > The Register of Pennsylvania : devoted to the preservation of facts and documents and every other kind of useful information respecting the state of Pennsylvania, Vol. IX > Part 89
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business in which they were engaged. Then what wa that business?
It was the conducting of the largest newspaper in the country, requiring, of course, considerable means, and giving employment to a great mass of active industry, Its situation was represented to be this:
MIr. Webb declared that there were then 3300 daily subscribers at $10, $33,000
2300 others at an average of $.1 50, 10,350
275 yearly advertisers at $30, 8,250
310 days advertising, at $55 per day, 17,050
Making, 68,650
Deducting from this 10 per cent. on the daily subscriptions and advertisements (of which about one-sixth is paid in advance) say 5,830 And 20 per cent. on other subscribers, say, 2,070
7,900
There remains a gross income of 60,850
The annual expenses are stated at 35,500
Leaving a net annual income of 25,750
This statement is confirmed by the affadavits of the book-keepers and pressmen of the establishment.
The total value of the paper was thus stated :-
James Watson Webb had invested in it $33,000, for which $40,000 had been offered, provided the other half could be had for $25,000. 'This he declined, but it is mentioned to prove that the whole might have been sold for $65,000
Then it was an improving establishment.
It had owed a debt to the banks of 15,000
Which it had paid off in April and May, 1831, out of the collections of the last six months, which had amounted to 20,000
It had, in 1829, owed a total debt of which it has since paid off.
29,000
And at the present moment its outstanding claims were more than its debts, by 10,000
for its responsibilities and means, stood thus: Outstanding debts in the country more than 25,000, of which could be collected on pre- sentation of bills, 10,000
Due in New York, more than four months subscription, which, with the unpaid ar- rears of the last six month, may be safely es- timated at 20,000
And the property owned by the applicants amounted to 8,000
Making, While the whole amount of debt was 28,000
38,000
Leaving an excess of 10,000
That they had been deemed worthy of credit in N. York, appeared from two facts.
1. That the bank's of N. York had lent them $15,000, which they had repaid.
2. That the respectable mercantile house ol J. I .. & J. Joseph & Co. a firm well known to the directors, had lert them $20,000, which had been repaid out of the profits of the establishments, as those gentlemen them- selves certify in a document accompanying the papers.
Finally, they had no accommodation, direct or indi- rect, out of any bank.
The ease stood thus: Ilere are two persons ofskill in their profession, engaged in an establishment for which the capital is $65,000
The gross income, 60,750
One of the parties had been appointed by the Presi- The expenditures, 35,00 dent and Senate of the United States, to a confidential And the nett income, 25,750 and lucrativo post under the Government; the other had In conducting such a business, where the receipts are semi-annual, the payments daily and weekly, they na- turally require, like other men in business, some credit. They accordingly apply to borrow $20,000. They wish already invested $33,000 in the paper, and his father-in- law, Mr. Stewart, whose letter accompanied the appli- cation, was known to be a wealthy man. Both were considered men of talents, and peculiar aptitude for the | to borrow it, not to pay previous debts, not to spend it VOL. IX. 40
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on objects unconnected with their business, but for the purpose of employing it all in a way to increase the profits of the concern itself, by procuring a new press, and enlarging their means of obtaining early commer- cial information, and thus make the paper more valua- ble.
"Now the statements may be presumed to present the most favorable aspect of the case, from the sanguine temper in which men are prone to estimate their own professions and prospects, and yet unless they were wholly fallacious, the board saw enough to warrant the loan. It was further justified by the event; for when the note fell due, $2000 were paid off at a time when the demand for money induced many other debtors to ask for a renewal of their notes.
" So much for the loan of $20,000."
The other loan rested on the same principles as the first, with this addition. The parties stated, that owing to the part which they had taken in regard to the bank, they had been deprived of their usual accommodations in their business. Whatever might be the reason, the fact of abridgment of these facilities furnished a reason for extending the loan in addition to the belief of its safety,-which was, that by so doing, any hazard to the original loan might be prevented; and the best evidence of its security is, that the parties have since repaid the loan.
In regard to the other loans, which appear in their names,they were given without any knowledge of their being discounted at the bank. They were done at the request of a person of undoubted solidity, which has been prov- ed in the most decisive way-by the actual payment of the notes. That they intended to aid Mr. Noah, the drawer of the notes, in purchasing a share in a newspa- per, was stated at the time. But that formed no objec- tion to them. lle borrowed money as thousands bor- row money every day, to employ it in his active busi- ness. If Mr. Noah himself applied to the bank for a loan to buy a share in a newspaper, and the security was satisfactory, the purpose of the loan would have made no difference. Nine-tenths of the loans made of the bank, probably are made to persons to buy some- thing, or to pay for something already bought. Men borrow money to buy a share in a ships-a share in a car- go-a share in a bank-a share in a canal-why not a share in a newspaper? The bank had no difficulty about the loan, because it was thought secure; nor about the object, because it was not the concern of the bank. It does not inquire, and does not care, where its money goes-its only anxiety is, that it should come safely back; and, whether, in the interval, it is employed by a merchant, or a farmer, or a lawyer, or an editor, is a matter of which it takes no cog nizance."
"In respect to loans genera lly to editors of newspa- pers, the bank proceeds on the principle of knowing no class of citizens, and proscribing none. Even with this rule, its situation in regard to such loans is a little pecu- liar. From the nature of the ir occupations, editors en- gaged in the discussion of matters of national concern, have generally expressed opi nions in regard to the bank; and their dealings with the loank, render it difficult to escape censure. When an editor, friendly to the bank applies for a loan, if it is granted, it is ascribed to favor- itism; if it is refused, the pr aty naturally thinks it ingra- titude. When an editor o pposed to the bank applies for a loan, if it is granted, it is deemed an attempt to in- fluence him, while if it is refused, it is called a perse- cution on account of his free opinions. The bank has endeavored in these mat ters, rather not to deserve re- proach than to escape it. .
In reply to that part (of the question which relates to politics,I believe that,if" in granting the loans in question, there was insensibly I blended with the mere business considerations, any political feeling, it was probably this: that charged, a s the bank habitually is, with hos- tility to the present a 3ministration, it was due to the in- terest of the stockholders, to correct so unfounded an impression, when a i fair opportunity occurred of giving
accommodation to those who were considered as the most strenuous and efficient supporters of that adminis -. tration. The directors of the bank, understand too lit- tle of the subject to attempt to adjust the balance of ac-' commodation to political parties, nor have I myself ever had even curiosity sufficient to notice it, until the inquiry'of the committee had suggested it. But, undoubtedly, as the committee cannot fail to perceive, by far the greatest amount of loans to editors, is to the friends of the present administration, and a large portion of that to the decided opponents of the bank."
All the directors who were examined, testified that they granted these loans under the full belief that they were safe loans, and Mr. Cope, a gentleman of intelli- gence and high character, gave the following explana- tion of the views and motives by which he was govern- ed in voting for the second loan of $15,000.
" Documents," said he, "were exhibited to the com- mittee, containing a statement of the names of the par- ties to the note, by which they appeared to be worth about $30,000, with a prosperous business, and a large subscription list. The loan was made, as all other loans are made without any regard to the politics or business of the parties, but solely because it was the business of the bank to lend on adequate security."
"I was well aware, at the time, that they were parti- san printers, and I knew that if we made the loan, it might be ascribed to improper motives, and that if we rejected it, it might be said we persecuted the individu- als on account of their politics."
Such are the grounds upon which the directors grant- ed these loans to James Watson Webb & Co.
It will be readily perceived, that the directors of the bank were placed in very peculiar circumstances by this application. They had been accused in various quar- ters, of having brought the power of the institution to bear upon the politics of the country, and particularly, with having taken sides against the present administra- tion. Having invariably pursued a course in their transactions which recognized no distinction of political parties, it was very natural that, while laboring under the imputation just stated, they should have been scru- pulous to avoid giving any color of foundation for it.
As the evidence and recommendation produced, sa- tisfied all the directors of the safety of the loan, they could not but feel that, if they refused to grant it, they would give countenance to an imputation which they were laudably anxious to avoid.
It is proper to add, that James Watson Webb & Co. in their paper, the Courier and Enquirer, had declared themselves in favor of renewing the charter of the bank, some months before the application for their first loan; and that they stated to the directors, on making applica- tion for the first loan, that the banks of New York had cnt them off from their accustomed facilities, as they believed, in consequence of their espousing the cause of the Bank of the United States.
It is also proper to add, in this place, that the loan of $17,975, which was made in March 1831, was not a loan to Webb and Noah, or to either of them. The mo- ney was borrowed by Silas E. Burrows, a man of large fortune, upon his own responsibility, without the know- ledge of either Webb or Noah. They both testify that they had never been apprised that Mr. Burrows- had obtained this loan from the bank, until a very short time previous to the visit of this committee to Philadelphia. They had, until that time, been under the impression that the money was obtained for them of Mr. Silas E. Burrows, in Connecticut. The following extract from the testimony of Mr. Biddle, will exhibit a clear view of this transaction:
" These notes were discounted by the exchange com- mittee under the resolutions just referred to. They were done at the request of Mr. Silas E. Burrows, of New York. Mr. Burrows had, some time before, brought me a particular letter of introduction from an old friend, Mr. Monroe, the ex-president. Mr. Burrows had been very liberal to Mr. Monroe, in his pecuniary misfor-
1832.]
UNITED STATES BANK.
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tunes, and he had recently received from the President of the United States, particular thanks and commenda- tions for his generous conduct towards a Russian ship of war. I understood him to be a very rich merchant, of kind and benevolent disposition, and constantly en- gaged in doing acts of liberality. In one of his visits to Philadelphia, he said, he was desirous of befriending Mr. Noah, and assisting him in the purchase of a share in a newspaper, and he asked if the bank would dis- count the notes of these parties-adding that, although, as a merchant, he did not wish to appear as a borrow- er, or put his name on a paper not mercantile, yet he would at any time do so, whenever it might be necessa- ry to secure the bank. The committee being all- thorized to discount any paper, the security of which they might approve, agreed to do them.
As Mr. Burrows was going out of town, I gave him the money out of my own funds, and the notes were af- terwards put in my possession. They remained with me for a long time, as I had no occasion to use the funds, nor was it till the close of the year, that my at- tention was called to them by the circumstance that, as a new board of directors, and a new committee of exchange would soou be appointed, the same commit- tec which made the loan should consummate it. I had seen, also, in the public prints, many reproaches against the bank for lending money to printers and editors, and I was unwilling that any loan made by the bank should seem to be a private loan from one of its officers. Hla- ving no use for the money, it would have been perfect- ly convenient to let the loan remain as it was, but I thought it right, that every thing done by the Bank should always be distinctly known and avowed, and I therefore gave the notes to the chairman of the commit- tec, Mr. Thomas P. Cope, who entered them on the books. On the 2d of March, Mr. Burrows called at the bank and paid the notes. I ought to add, that the loan was made at the request of Mr. Burrows, and that nei- ther I, nor any of the committee had ever seen Mr. Noah or Mr. Webb, or had any communication with them, direct or indirect about the loan. It was made on the credit of Mr. Burrows, who afterwards paid it.
It appears that Messrs. Webb and Noah, avowed themselves in favor of a renewal of the charter of the Bank of the United States, on the 8th of April, 1831. It is difficult, therefore, to conceive what possible influ- ence could have been produced upon their course by a loan to Mr. Burrows, of which they had no knowledge. It is difficult to perceive how the loans of August and December 1831, could have had any possible agency in producing the change which it is alleged took place in the course of these editors upwards of four months bc- forc.
Under all the circumstances of this case, the minori- ty of the committee declare without any reserve, that there is nothing in these transactions calculated to in- duce them to doubt the honor and integrity of the di- rectors, and this, they fech authorized to say, is the opi- nion of a majority of the committee, from the opinion al- ready publicly expressed of one of its members." They also deem it to be due to the occasion, and to their own sense of justice, that they should add, that, they do not believe there exists in the United States a bank direction composed of more upright, independent, and honest men, than that which granted the loans in question.
Most, if not all of them, are men of independent for- tunes, having no connexion with politics, and being en- tirely independent of banks. They are generally men who are engaged in a safe and successful business, with fortunes, which they have made, not by adventurous speculations, but by steady industry, and moderate but certain profits. This is, indeed, the general character of the merchants and capitalists of Philadelphia, a cir- cumstance which renders the location of the Bank in that city peculiarly fortunate for the stockholders and for the country.
The next subject brought to the view of the House by the report of the majority, which it is now deemed ne- cessary to notice, is that of the transactions of the bank with Thomas Biddle & Co.
Mr. Thomas Iliddle, the principal member of the firm, is a distant relation of the president of the Bank, and it was owing to this circumstance, probably, that his accounts underwent a most prying, not to say inqui- sitorial, examination.
The first thing that struck the attention of a part of the committee, as worthy of scrutiny, was the fact, that this house had obtained from the bank, in August, 1831, loans to the amount of upwards of a million of dollars, on a pledge of stocks,-a sum which had been gradually reduced, however, to about six hundred thousand dollars.
On examination, it was found that this loan had been made at the special instance and urgent solicitation of the directors of the Bank; and that the Bank, and not Thomas Biddle & Co., was the party accommodated. The Government having then recently paid off several millions of its stock, which the Blank had owned, the consequence was, that a large portion of the money ca- pital of the institution was rendered unproductive, and it became a matter of great importance to have it in- vested. In this state of things, the directors adopted a resolution, authorizing the loan of a large sum, at less than the legal interest, upon the security of any good stock. It is to be here remarked, that this was that por- tion of the capital of the bank which had never been invested, and which it was not deemed expedient to in- vest, in the routine business of discounts. The loan to Thomas Biddle & Co., on the pledge of stocks, wasana- logous to a loan to the Government. The stocks could, on any emergency, be sold and converted into cash; so that this investment had, in some sort, the twofold attri- bute of money in the vaults of the bank, to meet any pressing demands against it, and money, at the same time, drawing interest.
All the directors, who were examined on the subject, stated that they considered this transaction more for the benefit and accommodation of the bank, than of Tho- mas Biddle & Co., and the president of the Bank of Pennsylvania states, on oath, that the bank over which he was president, would have been very glad to have made large loans to Thomas Biddle & Co., at the same time, and upon the same terms-the board of directors of that bank, having authorized such loans at 4} per cent.
There was one occurrence during the examination of the transactions of Thomas Biddle & Co., with the bank, which merits particular notice.
An informer and witness, by the name of Whitney, who had formerly been a director of the Bank, was produced, who declared, upon oath, that, in July, 1824, two of the cashiers of the bank, and one of the discount clerks, had informed him that Thomas Hiddle & Co. had been in the habit of drawing money out of the bank, on a deposite of stock in the teller's drawer, with- out paying interest; and that the president of the Bank had discounted two notes, one for Thomas Biddle & Co., and one for Charles Biddle, without the authority of the directors. This witness stated, that he went with these officers of the bank, and examined the teller's drawer and the discount book, and found the facts which had been stated to him, verified by the examina- tion. Ile also stated, to give additional certainty to his averments, that he made a memorandum at the time, with the dates of the transactions, which memorandum he produced to the committee. Having thus unaltera- bly fixed the date of the transaction, as if by some fa- tality, he went on to say, that he immediately proceed- ed into the room of Mr. Biddle, the president, and remonstrated with him against these irregular proceed- ings; and that Mr. Biddle promised him that they should not occur again.
Mr. Biddle was present during the examination of this witness. On that day, being on oath, he said that ho was utterly astonished at the testimony of the witness,
ยท Col. R. M. Johnson.
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and could only oppose to it his solemn declaration, that there was not one word of truth in it, from the begin- ning to the end. He added, that from the relation in which the witness stood to him, he would have sunk in- to the earth, sooner than he would have dared to come to him with such a remonstrance as he pretended to have made. The officers of the bank, from whom the witness alleged that he derived this information, were examined, and all of them positively contradicted him. They testified and demonstrated from the books, that. Thomas Biddle & Co. had never obtained money, in any instance, without paying interest, and that the two notes, which Whitney asserted to have been discounted by the president alone, had been discounted regularly by the directors.
In the interval between the adjournment of the com- mittee that day, and its meeting the next, a member of the board of directors suggested to Mr. Biddle, that he was, about the time of this alleged transaction, in the city of Washington. On examining the journals of the board and the letter book, it was found by entries and letters, that for several days previous to the alleged in- terview between the president and Whitney, and for se- veral days afterwards, the president was absent on a visit to this city, on the business of the bank, and General Cadwallader was acting as president in his place.
Thus was this artfully devised story, which was in- tended to blast the reputation of a high minded and ho- nourable man, through one of those extraordinary in- terpositions, by which Providence sometimes confounds the contrivances of the wicked, made to recoil upon the head of its inventor, who must forever stand forth as a blasted monument of the speedy and retributive jus- tice of heaven. It is important here to add, that the president was in this city, not only at the time of the al- leged interview, but at the very time when the notes of Thomas Biddle & Co., and Charles Biddle, were dis- counted, which Whitney swore were discounted by the president alone.
The minority of the committee will avail themselves of this occasion to say, that they had the most conclu- sive evidence, that in all the transactions of the bank with Thomas Biddle & Co. and Charles Biddle, the pre- sident has been, not only free from the slightest impu- tation of partiality or favoritism, but that his conduct has been invariably governed by a nice and scrupulous sense of delicacy and propriety. And this they feel au- thorized to say, is the opinion of a majority of the com- mittee. The following resolution was unanimously adopted by the committee:
"Resolved, That the charges brought against the presi- dent, of lending money to Thomas Biddle & Co. with- out interest, and of discounting notes for that house and for Charles Biddle, without the sanction of the di- rectors, are without foundation; and that there does not exist any ground for charging the president with having shown, or manifested any disposition to show any par- tiality to these individuals, in their transactions with the bank."
The report of the majority, adverting to the with- drawal of specie from the southern and western branch- es, and the substitution of paper in its stead, suggests a doubt whether their operation may not be highly inju- rious to the southern and western States, So far from concurring in this doubt, the minority are of the opi- nion that there are no portions of the Union so much benefitted by the general operations of the bank, as the south-western and western States, and that the change produced by the bank in this system, and in the rates of domestic exchange, has been particularly beneficial to the whole of the southern and western States. Con- nected with the exchange operations of the bank, the transmission of specie from New Orleans to the northern Atlantic cities, is nothing more than a natural operation of trade, carrying the specie imported at New Orleans to its appropriate markets. This operation is carried on by the bank instead of being left to individuals, to the undoubted advantage of the community.
With a view to connect itself more completely with the commercial operations of the country, the bank has- also deemed it expedient to deal freely in foreign ex- change. It is obvious that this branch of its business is as important to the foreign commerce of the country, as dealing in domestic exchange is to our internal com- merce.
Ilaving heretofore had large funds in Europe, and having still extensive credits there, it has been, and still is, the policy of the bank to afford to the mercantile community every facility for carrying on foreign com- merce. At the south, where the staples of exportation are produced, it is constantly in the market as a pur- chaser of bills on Europe, to the great benefit of the planter; and, at the north, where foreign merchandize is imported, it is as constantly in the market as a seller, to the like benefit of the importing merchant. In this way the price of foreign bills is kept uniform and stea- dy, and those injurious fluctuations are prevented, which would otherwise operate as heavy taxes upon the business classes of the community, for the benefit only of private dealers in exchange.
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