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 93

Author: Hazard, Samuel, 1784-1870
Publication date: 1828
Publisher: Philadelphia : Printed by W.F. Geddes ;
Number of Pages: 440

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 93

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the New York city banks with any such motives for granting, or for withholding their discounts. The sub- scriber not only approves, but was gratified, at their re- fusal to assign their reasons for declining to discount the notes offered by Mr. Webb. Had the question been asked them why they had discounted the notes of the same person before, their answer must have been the same. The acceptance of an offered note, is, by unanimous and tacit assent, without assignment of rea- sons, and for which the reasons of one director are not necessarily the reasons of another. They are not pro- per subjects of inquiry, so long as the discount is in vio- lation of no law. And this principle is equally applica- ble to the president and directors of the Bank of the United States. They are amenable to authority only for conformity to the law. To the stockholders they are further accountable for the prudent and discreet em- ployment of their funds. But, while the result of that

management has been, for a series of years, to yield, to the stockholders half-yearly dividends, of three and a half per cent. upon their investments, while the stock of the bank, is at twenty-five per cent. advance upon its original cost in the market; and whilst the heaviest of all the complaints against the bank is the extensiveness and universality of its credit, the subscriber believes that the stockholders, and the most vigilant guardians of their in- terest, may wait until an actual loss shall have happened upon any one loan or discount, before they shall be jus- tified in imputing either thriftless improvidence, or sor- did corruption, to the president and directors of the bank for having granted it.

The constitution of the United States denies to Con- gress itself the power of pressing any bill of attainder, ex post facto law, or law abridging the freedom of the press. But here is a new fangled offence created ex post facto, under the denomination of subsidizing the press, to operate as a bill of attainder upon the bank, and as a disfranchisement to every editor of a public journal who may happen to be obnoxious to a political party in power. The fact constituting this most extra- ordinary crime, is the mere existence of a loan, or dis- count of the proscribed editor at the bank : a transaction entirely warranted by law, but in the consummation of which a committee of one branch of the legislature first assumes the right of scrutinizing, and then of passing sentence of condemnation upon the motives of both par- ties to the contract. As there is no law constituting the offence, the degree of its malignity has no rule of pro- portion but that of the temper by which it is prosecuted; it will be aggravated by every stimulant of private pique of clashing interest, or political prejudice, or of morbid suspicion, which can be enlisted in the prosecution. A committee man, being a large stockholder in a state bank, to be deeply benefitted by the extinguishment of the bank of the United States; another, not linked in connection with a newspaper establishment in competi- tion with the editor to be attainted; a profound politi- cal economist, wedded to a system of coin, currency, and credit, propitious to one banking interest, and un- favorable to another; a mere partizan hanging upon the skirts of a political candidate, and following the camp to share in the spoils of the victory, might all club their inventive faculties to swell this imaginiary trespass into a felony-and seldom would there lack as an ingredient in the composition, the corrosive sublimate of a malicious temper, with instinctive hatred of all honor and integri- ty, prone always to infer actual fraud and villainy from the mere possibility of its existence, and even to insinu- ate corruption, without daring openly to affirm it. These are consequences which must and would follow from the sanction by Congress, or either of its Houses, of the principle that the accounts of editors of newspa- pers, as a separate class of men, with the bank are to be scrutinized by a committee of Congress, as tests of the political opinions or doctrines for their editorial co- Jumus-or indications of the candidate to the presiden- cy, to whose banners they adhere-or defeat the re-

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chartering of the bank, by deducting from the same naked fact of existing loans, large or small, the dishon- orable conclusion, that the motives of the president and directors of the bank, for granting these loans, were to purchase the support of the borrowers, by bribery and corruption.

But let it, for argument's sake, be admitted that the accommodation of a loan to the editor of a public news- paper, by the president and directors of the Bank of the United States, is, on their part, an act of corruption of which the Congress of the United States, without doing injustice, and without derogation from the dignity of their duties, can take cognizance, the subscriber be- lieves that it cannot justly have any bearing whatever, upon the question whether the Bank of the United States shall or shall not be re-chartered.

Admit that, in a country where the freedom of the press is among the first elements of the liberty of the people, a committee of one House of Congress has a right to constitute ex post facto, a crime under the name of subsidizing the press, of that, which in the eye of the law of the land, is, and always has been innocent-Ad- mit that they have power to search into the hearts of the president and directors of the hank for dishonest mno- tives to lawful actions-Admit that they have a right to interrogate them for reasons which no director of any bank is ever bound to give.

Admit, that after the president and directors have submitted to these insulting interrogatories, and assign- ed the reasons by which they were actuated, the com- mittee should still feel themselves justified in groping day after day, for substantial evidence, to. falsify the frank and explicit declaration of men without a slur up- on their fame-That piles of folio volumes, of hank ac- counts, should be rummaged over, nights and days, for a variety in the color of ink, in entries made by differ- ent clerks, with different inkstands, for errors in the spelling of a name, for interfineations and crasures in a waste-book or a Tickler, and all to substitute trifles light as air of suspicion, in the place of fact, and to im- pute fraud, forgery and perjury where they cannot be proved-Admit that the unsullied characters of men, long known among their fellow-citizens, for lives with- out fear and without reproach, may be thus breathed and whispered into disgrace-What has all this to do with the question, whether the Bank of the United States shall receive a new charter or not? If the presi- dent and any number of the directors have been guilty of malversation in their offices, the remedy for their of- fence is removal from office. They may be further re- sponsible to the stockholders in their persons and pro- perty.

The directors appointed by the President and Senate are, at all times removable by the President of the United States alone. The president of the bank is ev- ery year liable to removal, both as president and direct- or, by failure of re-election as a director by the stock- holders, or as president by the directors. No other di- rector can be re-elected more than three successive years in four. If the board of directors have been guil- ty of neglect or violation of their duties, the punishment of their delinquency is to appoint another set of direct- ors in their place; not to punish the innocent and inju- red stockholders hy refusal to renew the charter. By the rotation prescribed in the charter itself, not nne of the present board of directors can remain in, office at the time of the expiration of the charter, nor can the present president of the board ever be president of the bank under the renewed charter, but by the suffrages of the stockholders, according to their respective privi- leges of voting. If, therefore, any misconduct had been discoverable in the official conduct of the presi- dent of the bank, the proper punishment for it would have been his removal from office; and the same may be said of any other of the directors. But for their faults, to punish the stockholders who had no communication or privity with them-for their errors, to deprive the

great mass of the community of the benefits and advan- tages secured to them, and enjoyed by them through the instrumentality of this great institution over this whole Union, would proceed from a theory of crimes and punishments unrivalled by the political inquisition of Venice, or the religious inquisition of Spain. A the- ory by which the crime would be committed by one set of persons, and the punishment inflicted upon ano- ther-a theory by which the stockholders would be muleted in their property, because the directors had been faithless to their trust, and the people bereft of public blessing, because the confidence in the integrity of their agents had been betrayed.

At the close of the long commentary of the majority report, upon the transactions between the editors of the New York Courier and Enquirer, it is observed, that, among the documents exhibited to the committee, and reported to the House, are four other cases of loans at long credit, made by the bank. The report neither mentions the names of the individuals, parties to those contracts, nor the correspondence and testimony rela- ting to them, which were laid before the committee. The subscriber, approving the discretion of the majori- ty, in this particular, will not deviate from the example set in the report. He will barely take occasion from it to remark, that the names of those individuals, and of their accounts and transactions with the bank, cannot be brought before the public by the committee, without gross injustice. Those transactions, he is bound to be- lieve, were perfectly justifiable in all the parties to the contract; but he was under a full conviction that neither he, nor the committee, had the right to inquire into them, whether for justification or for censure. The ob- jection of the subscriber is to all inquisition into mo tives, for actions unforbidden by law. But in each of these four cases-in those of the accounts of every edi- tor of a newspaper, of every member of Congress, and of every person connected with the Executive Govern- ment-if the fact of the individual account is exhibited to the public, it is, upon the plainest principle of justice, the right of the individual to have alike exhibited to the public, all the circumstances connected with the trans- actions which he may deem essential to his justification. But what is that justification? Is it justification limited by the boundaries of the law? No: that is not sufficient. The account in bank must be coupled with the conduct and opinions of the individual, to point the finger at him and at the bank as for dishonorable conduct and corrupt purposes. So it was in the case of James Watson Webb and of Mordecai M. Noah. Why was it not so in other cases? Why are the names of other printers, and the amount and the aspect of their debts to the bank, as principals or as endorsers, withheld? Why are other editors, having large accommodations in the bank, the names of their endorsers, the character of their settlements, the present state of their engage- ments, and a contemporancous exposition of their edi- torial friendship, or hostility to the bank, not set forth in all the developments of the bank debts and editorial speculations of James Watson Webb and Mordecai M. Noah?

Why are not the day of an editorial discount and the day of an editorial puff of panegyric, or blast of abuse upon the bank, brought in juxta-position to each other, so that suspicion may yoke them together in the rela- tion of cause and effect, in any other case than theirs? The subscriber believed that there were other accounts of editors and printers with the bank, exhibited to the committee, which, compared with editorial lucubra- tions in the newspapers, of the same editors at the same time with the discounts, or at the present day, would suggest reflections quite as edifying to the spirit of re- form, as the debts and dissertations of James Watson Webb and Mordecai M. Noah. The majority report has buried them in oblivion. There let them remain. The subscriber will not disturb their repose. But he asks of the candor of the community, and of the self re-

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spect of the House, representing the feelings of the peo- ple, that no more legislative investigations may be insti- tuted at the expense of the nation, under color of an ex- amination into the books and proceedings of the bank of the U. States; into the political purity and undevia- ting consistency of the conductors of the public press.

It is with great satisfaction, that the subscriber de- clares his entire and undoubting conviction, as the re- sult of all the examination which, under the resolution of the House, and the unbounded range of inquiry sanc- tioned by the majority of the committee, he was able to give the books and proceedings of the bank, that no misconduct whatever, is imputable to the president, or to any of the present directors of the bank. That, in the management of the affairs of this immense institu- tion, now for a series of nearly ten years, occasional er- rors of judgment, and possibly of inadvertance, have been committed, is doubtless true-in the vast multi- tude of relations of the bank with the property of the whole community, the board of directors of the Parent Bank, or of some of its branches, have sometimes mista- ken the law, and sometimes have suffered by misplaced confidence. A spirit of predetermined hostility, un- controlled by a liberal sense of justice, prying for flaws, and hunting for exceptions, may gratify itself, and swell with exultation at its own sagacity, in discov- ering an error or arguing a misconstruction of the pow- ers. In the conduct of the present president and di- rectors of the Bank of the United States, no intentional wrong, and no important or voluntary error has been committed. He deems this declaration due from him to those worthy and respectable citizens, in the face of this House and of this nation, willing as he is to abide upon it the deliberate judgment of after times. He deems it the more imperiously required of him as a sig- nal vindication of the honor and integrity of injured and persecuted men. It has been impossible for him to ob- serve, without deep concern, the spirit and temper with which this investigation has been prosecuted par- ticularly with regard to the president of the bank. As one example of which, he would call the attention of the House to the testimony of Reuben M. Whitney- to the manner in which it was produced, and to the catastrophe in which it terminated.

On the 2d of April, the chairman of the committee asked of them, authority to issue a subpoena to summon the attendance before them of Thomas Wilson, hereto- fore, in the year 1824, a cashier of the bank, to testify as a witness. The subscriber inquired what it was ex- pected Mr. Wilson would prove, which question the chairman declined to answer. The subscriber objected therefore to the issuing of the subpoena, and the motion for it was for that day withdrawn.

The next day it was renewed, with a statement in writing by the chairman of several allegations, as the subscriber conceived, amounting to charges against the president of the bank, of embezzlement of the monies of the institution. The subscriber inquired from whom these charges had been received, which the chairman declined to state. The subscriber moved that a copy of the charges should be furnished to the president of the bank. But the paper was withdrawn by the chair- man, and a resolution was substituted in its place, which was entered upon the journal of the committee. The objection of the subscriber to this course of proceeding was, at his request, entered upon the journal, and at the request of the chairman an entry was also made of the grounds upon which he deemed his own course in this respect justifiable. The objection of the subscri- ber was, not that the chairman had thought proper to listen privately to secret informers, but that he required the action of the committee for a call of testimony deeply affecting the moral character of the president of the bank, and yet withheld from the committee the name of his informant. The subpoena to Mr. Thomas Wil- son was nevertheless issued. The charges against the president of the bank were, that Thomas Biddle, a dis-

tant relative of his, and one of the most eminent brokers of Philadelphia, had been in the habit, by permission of the president, of taking money out of the First Teller's drawer, leaving in its place certificates of stock; of keeping the money an indefinite number of days, and then re-placing the money, and taking back his certifi- cate of stock, without payment of interest upon the mo-" neys of which he had had the use. The quintessence of the charge was, the use by Mr. Thomas Biddle of the moneys of the bank without interest. And there was another charge, that the president had also been in the habit of making large discounts upon the notes of Tho- mas Biddle without consulting the directors, between the discount days, and that the notes were entered as of the previous discount days.

Mr. Wilson's testimony completely disproved, so far as his knowledge went, both these charges. He had never known a single instance in which Mr. Tho- mas Biddle, or any other person, had ever been permit- ted by the president of the bank to use the moneys of the bank without payment of interest. He had never known a discount of a note of Thomas Biddle by order of the president of the bank, without consulting the the board of directors or the committee duly authorized to discount. Mr. Wilson had been removed in a man- ner as inoffensive to his feelings as possible, from his office of cashier of the parent bank in 1824, by being first transferred to the branch at New Orleans, from which he was also afterwards removed. Previous to his removal from the bank at Philadelphia, the personal intercourse between the president of the bank and him had not been altogether harmonious. He had hinted to Mr. Reuben M. Whitney, a director then secretly un- friendly to the president, and to Mr. Paul Beck, a di- rector particularly friendly to himself, that he thought the president had too much influence over the board of directors, and had spoken with disapprobation of the fact, that Mr. Thomas Biddle had occasionally received discounts upon transferred stocks, with checks, which, at the end of an indefinite number of days, were taken up and the cash returned, with regular payment of in- terest, as upon discounted notes. The checks being entered in the books under the head of bills receivable. Several cases of this kind had occurred in the months of May and June 1824. Mr. Wilson's testimony was ve- ry clear and explicit to the integrity of the president of the bank, and it was totally contradictory to the state- ments which the chairman bad framed into charges from the private information which he had received, and the name of the informer of which he had declined giving to the committee. But Mr. Wilson had named Mr. Paul Beck and Mr. Reuben M. Whitney, two of the direct- ors of the bank in 1824, and to whom he had incidently communicated his slight discontents at the period im- mediately before his removal.

Mr. Beck and Mr. Whitney were summoned to ap- pear and testify. The character and respectability of Mr. Beck are so universally known at Philadelphia, that all remark upon them would be superfluous. He had been a director of the bank in the years, 1824, '25, and '26, and again in the years 1828, '29 and '30, and of course not only at the time alluded to by Mr. Wilson, but for five of the years which have elasp- ed since then, and till within less than two years past. Mr. Beck remembered the communications made to him by Mr. Wilson, shortly before his removal, and had thought them to proceed from irritation.

He had seen no cause to doubt the correctness of the official conduct of the president, and has retained his perfect confidence in it unimpaired to the present day.

The testimony of Mr. Whitney was of a different character. This person had been a director of the bank in the years, 1822. '23 and '24, and a very active member of the board. He was a native American, but from the year 1808 to 1816 had been a resident in Mon- treal in Canada-during the war, by permission of the British government, on his taking an oath to obey the

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laws of the country, which he did not consider as an oath of allegiance-but he had not asked or re- ceived the permission to remain in Canada from his own government. About a year after the expiration of his services as a director of the bank, he failed in busi- ness. Of his present standing in the community, no evidence was taken by the committee.

The story that Mr. Whitney told on his first exami- tion was, that some time in 1824, Mr. Wilson and Mr. Andrews, then cashiers of the bank, had mentioned to him certain transactions in the bank in which T. and J. G. Biddle were concerned, which they were not willing should exist without some member of the board being informed of them. Upon his inquiring what they were, they replied that T. & J. G. Biddle had been in the ha- bit of coming to the bank and getting money, and Jeav- ing certificates of stock, which represented it in the first Teller's drawer, without paying interest, and without be- ing entered on the books. That they had also stated that the Messrs. Biddle had had notes discounted for them by the president which were entered on the books of the preceding discount-day: that upon Mr. Whitney's asking them what sums there were of the kind in existence at that time, they went with him to the first Teller's drawer, and found one sum of 45,000 dollars, dated 25th May, and one for 24,000, dated 26th May: that they then went to the discount clerk's desk, and found one note at 15 days, dated 13th May, for 20,000 dollar, of T. Biddle, and one note of Charles Biddle, dated 21st May, at sixteen days, for $38,319: that the two former sums represented cash, and the two latter were notes which the two cashiers stated to him had been discounted by order of the president. Of all this, Mr. Whitney declared, a memorandum at the time had been taken by him. Such a memorandum he produc- ed, and left with the committee on a small slip of paper, worn out and torn, and it is among the papers reported by the committee; and as it formed the main stay of Mr. Whitney's first testimony, a copy of the whole of it is here subjoined.

" May 25, 45,000. " 26, 24,000.

May 13, 15 days, $20,000 collateral. " 21, C. Biddle, 58,319, 16 days 5-8 June."

Of the two first notes, Mr. Whitney declared, in an- swer to a leading question from the chairman, that no entry had been made upon the books: that he took his note of them from a memorandum in the teller's drawer, and that on muking the discovery, he directed the officers of the bank, one or hoth cashiers, to enter this money upon the books: that it was done-that he did not see it done, but subsequently saw on the books, the entry of "bills receivable," which he knew was the entry made by his order.

Ile further stated that immediately after making this discovery,and giving this order, he had gone into the pre- sident's room, where he found him alone: that he told him what he had discovered and done, and requested that no such transaction should be repeated while he was a director of the institution. That the president did not deny the facts as he had stated them-that he colored up very much, and promised that no such thing should happen again.

This testimony appeared to be in all respects so extra- ordinary, and so deeply to affect the moral character of the president of the bank, in which the subscriber had been long accustomed to repose the most unbounded confidence, that he deemed it proper to trace its intro- duction, so far as possible, to its origin. As the question of the chairman of the committee which drew forth this testimony indicated that he had previously been made acquainted with it in detail, and as he had, on first sta- ting his expectation to prove these charges, declined naming the witness by whom he expected to prove them, the subscriber resorted, by interrogation of the witness, to ascertain that which the chairman had de- VOL. IX. 42

elined communicating to the committee. Ile inquired of Mr. Whitney whether he had previous communica- tion on the subject with any member of the committee? What had been his motive for giving the testimony? Whether it had been voluntary or solicited? To these questions he answered that he had made previous com- munications to the chairman at his apartment, in pre- sence of another member of the committee; that he had no particular, but general motives for giving the testi- mony; that he did not recolleet whether it had been voluntary or asked of him; but upon being pressed by a further question, he answered, that Judge Clayton had been recommended to him by a letter from Mr. Benton. This disclosure was then confirmed by the chairman ..

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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 93

Author: Hazard, Samuel, 1784-1870 Publication date: 1828 Publisher: Philadelphia : Printed by W.F. Geddes ; Number of Pages: 440

Author: Hazard, Samuel, 1784-1870
Publication date: 1828
Publisher: Philadelphia : Printed by W.F. Geddes ;
Number of Pages: 440