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. XII, Part 116

Author: Hazard, Samuel, 1784-1870
Publication date: 1828
Publisher: Philadelphia : Printed by W.F. Geddes ;
Number of Pages: 438

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. XII > Part 116

Note: The text from this book was generated using artificial intelligence so there may be some errors. The full pages can be found on Archive.org (link on the Part 1 page).

680

384

1352401

Northumberland,

5307

162915

150

201

70339

Berwick,

8600

58500

21486

New Hope,

115086

4345257

Easton,

137300

7830185

South and East.

10,685

2,566,782'

838,767

142,483

561

2,496

714

16,432,754

Mineral Coal.

Iron.

Lead.

[Copper & Tin.

Marble.

Lime.

Lime-|Slate for stone.

roofs.

ĮBricks.

CANAL COMMISSIONERS' REPORT.

1833.]

602464

1145

Bristol,

Timber.

Sawed Lumber.

Staves, Heading Shingles [Post & | Wood for | & Hoop poles. Rails. Fuel.

366

VOL. XII.

410

DEPOSITS-BANK OF THE UNITED STATES.

A GENERAL STATEMENT

Showing the amount of tolls received, number of boats cleared, and quantity of tonnage cleared, at the several collector's offices; and the number of miles travelled by passengers on the Pennsylvania canal and railway, during the year ending on the thirty-first of October, 1833.

PLACE OF COLLECTION.

Tolls paid into No. of boats. the Treasury. cleared.

Property conveyed.

Passengers.

North& West. |South & East

Dolls. Cts.

Nett tons.

Miles travel'd.

Philadelphia,

5002 58

1721

352111

Portsmouth,

25543 90

1327

20208

5312

19015

Harrisburg,

19650 09

1443

12572

12390

18742

Lewistown,

7703 84

453

1553

5032

15614

Huntingdon,

3564 08

424

1704

2320

211810

Hollidaysburg,

3847 10

428

1009

1383

875 00

1138

5493

Conemaugh, Blairsville,

14225 00

693

8999

2676

199635

Leechburg,

4355 85

291

8328

345

542

Pittsburg,

7670 88

727

4133

8100

1523

Berwick

3416 32

239

955

4870

2203

Bristol,

11418 65

3071

18235

4341

New Hope,

1675 03

338

267

11544

1868

Easton,

31735 46

2214

100277

3840

Portsmouth out-let locks,

516 32

Do.

bridge over Swatara,

541 76

Bridge at Duncan's Island,

3485 06

Aqueduct at Duncan's Island,

61 41

Do.

at Shaver's ford,

10 00

Do.

at Jack's Narrows,

144 62

Do.

at Kiskeminetas,

250 83

Do.

at Pittsburg,

736 71

$151,419 69

12,529

79,813

159,281

878,318

DEPOSITS-BANK OF THE UNITED STATES. (Continued from page 400. )

The next evidence adduced of the Bank's opposition to him, is its claims for damages. Of this he gives the following account:

" The Bank became the purchaser of a bill drawn by our Government on that uf France for about 900,- 000 dollars, being the first instalment of the French in- demnity. The purchase money was left in the use of the Bank, being simply added to the Treasury deposits. 'T'he Bank sold the Bill in England, and the holder sent it to France for collection, and arrangements not ha- ving been made by the French government for its pay- ment. it was taken up by the agents of the Bank in Pa- ris, with the funds of the Bank in their hands. Under these circumstances it has, through its organs, openly assa led the credit of the Government, and has actually made and persists in a demand of fifteen per cent. or $158,842 77 as damages, when no damage, or none beyond some trifling expense has in fact been sustain- ed, fand when the Bank had in its own possession on deposit, several millions of the public money which it was then using for its own profit. Is a fiscal agent to the Government, which thus seeks to enrich itself at the expense of the public, worthy of further trust?"

First. It is not correct to state that the Bank was the "fiscal agent" of the Government in this matter. On. the contrary, the fiscal agency of the Bank was offered without any charge to the Government, and declined. The Bank did not wish to purchase the Bill at all, but proposed to collect it, paying the money only after it had been received by the agents of the Bank in France, Thus when the Secretary of the Treasury wrote to the answer dated November 5, 1832, said

crease it because it may hereafter have occasion for the funds, and because it is believed that if the terms can be made acceptable, the purchase of the whole by the Bank, would be the best operation for the Govern- ment;"-and again in the same letter ---

" In regard to the rate, you are the most competent judge of its fitness, and I will merely add, that the Bank not wanting funds in Paris, and believing that they will be lower hereafter, would not make a similar purchase from any other quarter, and is influenced ex- clusively by the belief that any other arrangement would be less advantageous to the Treasury "

So in his letter of the 11th of February, 1833, "The purchase of the bill is not in the least lesirable to the Bank, nor would the rate now allowed be given to any other drawer than the Government, for we shall send by the same conveyance which carries your bill, a large amount of bills purchased at 5.45, being nearly 1} per cent.less than the price actually given to the Treasury."

The Bank then did not wish to purchase the bill. But the Bank offered its agency to collect it on the fol- lowing terms, on the 5th November, 1832.

" Should you prefer not fixing a rate at present, but to take the chances of a higher rate hereafter, the Bank on receiving your bill, would place the amount of it to the credit of the Government on the 2d of March, at the current rate of exchange of the best bills on that day in Philadelphia.

Bank about this bill, the President of the Bank in his that fact.and would not have made the payment on the 2d

Here then was a distinct proposal to collect the bill just as the Bank collects bills for individuals, so that if the bill had, in Nov. 1832, been sent to the Bank, it would have been forwarded to Europe; and if on the 2d of Feb. 1833, when it was payable in Paris, it had not been paid, the Bank would have been apprised of of Warch, and the whole transaction would have been closed. This course, however, the Government did not

" The Bank has already in Paris a larger sum than it has any immediate use for, yet it is not indisposed to in- | adopt -but after considering the offers for the bill made

5406

40198

Northumberland,

4993 20

821

411

DEPOSITS-BANK OF THE UNITED STATES.

1833.]

from other quarters, decided to sell it to the Bank. Secondly. It is not the fact that this money "was left in the use of the Bank, being simply added to the Trea- sury Deposits."

Suppose that it had been, it would not in the slightest degree affect the question of damages. When a party sells a bill, and is paid for it, that is, has the funds placed to his credit to be drawn whenever he chooses without further notice, the party is as much paid-the fund belongs as little to the Bank-as if the party had actually withdrawn the whole sum in specie. But not only was the fund in this case drawn from the general resources of the Bank, and placed to the credit of the Treasury, but immediately after that was done Congress passed a law to lend the money, and the Secretary of the Treasury issued a notice that this money was to be forthwith lent out to capitalists, that is to say to be im- mediately withdrawn. The credit given to the Trea- surer was on the 11th of February, 1833. The notice of the Secretary dated the 6th of March, offered to lend out this money after the 20th of March-of course the Bank could make no use of it-on the contrary, as it would probably be withdrawn immediately, it became not merely useless as a deposit, but required the Bank to shape its loans to others, so as to provide for the im- mediale payment.

Nor is this all. Not only was this sum passed to the credit of the Treasurer-not only was the early with- drawal of it from the Bank announced by the Secreta- ry, but the identical proceeds of this identical French bill, were actually used by the Government for the pay- ment of its ordinary expenses.

The account of the Treasurer at the Bank stood thus-

February 11 18

$717,264 22

1,735,460 40

(in consequence of the payment of the French bill. )

February 25

1,842,658 14

March 4

1,620,699 89

1,551,627 97

1,560,783 63

1,496,907 43

1,052,862 10

April 8

1,082,560 88

918,816 61

746,613 61

826,070 90

May 6

814,046 61

774,630 47

431,560 43

when the money was paid.

It will thus be seen, that there was at the credit of the Treasurer on the 18th of February, the sum of $1,735,- 460 40, of which $903,565 89 were the proceeds of the French bill, and as in the month of April there was to his credit only $746,613 61, the difference between these two sums, that is to say $156,952 28 had been drawn for out of that fund of $903,565 89.

Accordingly when the Treasurer came to repay the money, he had not enough of it remaining-but was obliged to draw on funds elsewhere, so that in acknow- ledging the receipt of his draft on the 11th of May, 1833, the Cashier of the Bank added,

" Your transfer check for $700,000 on the office of the Bank of the United States at New York will appear at the credit of your account this day, and will thus prevent the overdraft which the change now advised would otherwise have ocasioned."

In the United States then the Bank had paid the amount of the bill in its least convenient form. But when it was protested in Paris, the agents of the Bank finding a bill with its name upon it protested, came for- ward and paid it on account of the Bank-so that the Bank had actually paid for this bill twice over-once in Philadelphia and once in Paris-that is, it had of course

a credit for the proceeds of the sale of the bill in Lon- don, but its actual disbursements on account of the bill were upwards of $1,800,000.

What makes the case stronger is this-that on the $2d of March, the day when the protested bill came back to the Bank, the whole amount in the credit of the Treasury throughout the whole United States, with the exception of the Danish indemnity money, was $1,827.048 88. Now the Bank had advanced $903,- 565 89 in Philadelphia, and $921,590 18 in Paris, ma- king $1,825,156 07, so that although it had credit in England for the bill sold there, the Bank had actually advanced on account of this bill a sum equal within less than two thousand dollars, of the whole funds of the Government in the Bank.

When the bill returned protested, the Bank, as the endorser, called upon the Government to pay the prin- cipal and the damages. It did this as a matter of course. It did it as a matter of the clearest duty to the Govern- ment, because if the Government had any right at all to draw the bill, it had a right to make France pay the damages for its breach of contract, and it had no mode of claiming against France, unless in the first instance it paid the damages to the Bank, which it might the more readily do,as being one-fifth partner of the Bank, its own share of the $158,000 would be $31,600.

But whether the French Government pays these da- mages or not, it is manifest that the American Govern- ment must pay them-and this upon the simple princi- ples, not of equity, but of ordinary honesty .

From the foundation of the Government to the pre- sent day, whenever the Government has purchased a bill from a private citizen, and that bill has from what- ever cause returned protested, no matter how hard the case may be, no matter what circumstances of excuse or mitigation may be offered by the citizen, no inatter whether damages were actually sustained or not, the Government has rigorously enforced its claim for dama- ges. It has not merely forced a solvent merchant to pay, but has insisted that its claim for damages should have its legal precedence over all the just rights of the other creditors of an insolvent; and now when the case is changed, when the Government sells its own bill to its own citizens, and that bill returns protested, with what propriety, nay with what pretensions to common hones- ty, can the Government presume to deny the same jus- tice to its own citizens. The books of the Treasury are crowded with cases of damages exacted by the Go- vernment from American citizens -- and one is now se- lected merely from its peculiar aptness to the present occasion.

Some years ago Mr. Stephen Girard sold to the Trea- sury four bills, two of which returned protested owing to the insolvency of his correspondent in London; when the two others became due they were paid for the ho- hour of Mr. Girard, by the Messrs. Barings, who also agreed to pay the two first in London, as of the day on which they were payable. Mr. Girard applied to Con- gress for exnneration from the claim of twenty per cent. damages, alleging-

"That from the said sum of £22,500 stesling, due on the 18th August last, being passed by Sir Francis Ba- ring & Co. to the credit of the Secretary of the Trea- sury of the United States, as on the day the same be- came due' no real loss or damage can accrue to the United States from the said bills being returned under protest."

Congress rejected the claim, and Mr. Girard paid the damages of twenty per cent.

On that occasion, the Committee of Claims called on the Secretary of the Treasury, Mr. Gallatin, and in his answer, which makes part of their report, he says that he had rejected Mr. Girard's claim for four reasons, of which the two most essential are:

"1st. Because, considering the large amount of bills (more than two millions of dollars, ) annually purchased on account of Government, it appeared absolutely ne-

412

DEPOSITS-BANK OF THE UNITED STATES.

[DECEMBRA

cessary never to give up the damages whenever a legal right to them had accrued, and because that right has in every instance, without regard to persons or circum- stances, been enforced.

"2d. Because if abandoned in this instance and for that reason, every drawer who was solvent might by making a remittance to the bankers in Europe, after bills protested for non-payment had been returned to the Treasury, induce them to make a similar offer, and evade the payment of damages.

The lapse of years at last reversed the state of the par- ties. Mr. Girard becomes the largest stockholder in a corporation called the Bank of the United States, and he and his partners, in the course of their business, purchase a bill from the same officer, the Secretary of the Treasury, which comes back protested after having been twice paid for. Mr. Girard's heirs and his associ- ates apply to the Secretary-not even for the same amount which Mr. Girard formerly paid-not for twen- ty per cent. the damages in Pennsylvania-but for fif- teen per cent. the damages in Washington; and the on- ly answer vouchsafed by the Treasury Department is, that the claim "has no foundation in law or equity" -- to which the President now adds, that it is an attempt to " impair the credit of the Government, and tarnish the honour of the country." Such a course tends to an ut- ter confusion of all ideas of justice; nor is it a thing to- lerable by the American people, that an individual shall go among the citizens purchasing bills and exacting da- mages, and when his own bill, sold to these same citi- zens, returns protested, he shall wrap himself up in his official immunity, and refuse to do to his fellow citizens what he has compelled them to do to him.

But supposing all this to be directly the reverse of what it really is-supposing the claim to be questiona- ble instead of equitable, is there any thing in it which can at all justify this denunciation of the Bank? IIere is a claim made by certain American cititizens for dama- ges on a bill of exchange, which they have purchased of the Government. The question is a legal one. The judicial tribunals are to decide it. Yet while the Bank is quietly waiting the action of the laws, the President of the United States prejudges the question-denounces the Bank for having presumed to make the claim-and gives that to the country as a reason why he should in- stantly remove a Secretary of the Treasury, in order to subject the whole public revenue of the United States to his own disposal.

In further illustration of the opposition of the Bank to his election, he next proceeds to treat of certain acts of the Board of Directors. The annunciation of these is prefaced by remarks on the magnitude and importance of the facts, their recent disclosure and their great enormity; and the whole is concluded by a complaint of the "hundreds of thousands and even millions" which may be employed in subverting the liberties of the coun- try, and in disparaging the Executive. How little foun- dation in fact there is for all this will be readily seen by examining the allegations in the order in which they are presented,

First. He says, that "although the charter and the rules of the Bank both declare that 'not less than seven directors' shall be necessary to the transaction of busi- ness, yet the most important business, even that of granting discounts to any extent, is entrusted to a com - mittee of five members who do not report to the Board."

Now, the charter does not require seven directors to make discounts.

Nor do the rules of the Bank require seven direc- tors.

Nor is it true that any committee of five have this power to discount.

Nor does any committee discount without reporting to the Board.

The charter says that " not less than seven directors shall constitute a Board for the transaction of business."

But the business of the Board is not exclusively nor primarily to make loans :- its business is to govern the whole Institution. If the charter required seven Di- rectors to make a discount, it would have said so of the Boards of Directors of the Branches, whose more exclusive business it is to discount. But it places no such restriction on the Branches, where by far the greater discounts are made. The business of the Board is to prescribe how the details of the operations of the Bank are to be made-it may delegate a portion of its power of making loans to Committees; for in truth to require a Board of seven Directors to meet before any bill could be discounted, would entirely destroy the most useful operations of the Bank-and accordingly the Exchange Committee meet every day for the pur- chase of bills, and their purchases are submitted to the Board at their next meeting. It would be supposed from the manner in which it is stated, that this was some recent innovation So far from it, the discount- ing of bills of exchange was formerly done by a small- er number than at present. On the 13th of February, 1821, during the administration of Mr. Cheves, and be- fore the time of the present officers, a rule was adopted that-

" In the absence of the Exchange Committee, the President and Cashier shall be authorized to purchase exchange which may be offered for sale, if an immedi- ate answer be desired, and report such purchases to the Exchange Committee at its next meeting thereafter."

Thus giving the power here complained of to only a single director of the Bank. Yet no one ever imagined that it was a violation of the charter. In truth it is a power exercised very generally by the officers of Banks throughout the United States.

The second is-"To cut off all the means of commu- nication with the Government in relation to its most im- portant acts, at the commencement of the present year, not one of the Government Directors was placed on any one Committee. And although, since, by an unu- sual remodelling of those bodies, some of those Direc- tors have been placed on some of the Committees, they are yet entirely excluded from the Committee of Ex- change, through which the greatest and most objection- able loans have been made."

There are two things remarkable in this paragraph -first, the strangeness of the confession; and next, the fallacy of the statement. It is here asserted that not to have the Government Directors on Committees is to "cut off all means of communication with the Govern- ment in relation to its most important acts;" that is to say, that the confidential opinions and the unreserved expressions used by their colleagues on a Committee are to be communicated to the Government. It is pre- cisely this fact, thus officially announced, which would make these Directors unsafe depositories of the confi- dence of their colleagues. "At the commencement of the present year," he proceeds, "not one of the Gov- ernment Directors was placed on any one Committee." Now of these Directors, who could then be appointed, there were but two residents of Philadelphia-the third not having yet been appointed. Why these two Di- rectors, one of whom had just come, for the first time, into a banking institution, were not named on the Committees, in the place of old and valued Directors, it would be more invidious than difficult to decide; but that there was no studied exclusion was obvious from the fact that at the very next quarterly appointment, two out of the three Government Directors were placed on Committees. Nor is there any foundation for the assertion that an "unusual remodelling" of these Com- mittees has taken place. On the contrary, the Com- mittees were appointed quarterly, as they have for years been appointed, and not the slightest remodel- ling of them, usual or unusual, has taken place. As to the Exchange Committees, who are charged with the arrangement of the Foreign and Domestic Exchanges of the Bank, requiring commercial experience and

1833.

DEPOSITS-BANK OF THE UNITED STATES.

413

knowledge of the business and the credit of individuals, those who are presumed most qualified are most natur- ally chosen. These Directors have no claim to the slightest distinction above their colleagues, and they must take their chance with the other members in the formation of the Committees. In truth, meu will choose their associates on committees. as in every thing else, from confidence in their capacity of their personal qualities; and not to be chosen to places of trust im- plies only that others are more trusted.

The third is-"It has long been known that the Pres- ident of the Bank, by his single will originates and ex- ecutes many of the most important measures connected with the management of the credit of the Bank; and that the Committee as well as the Board of Directors, are left in entire ignorance of many acts done, and cor- respondence carried on in their names and apparently under their authority."

An assertion so general can only be met by as gener- al a denial; at the same time, the Committee deem it their duty to declare, that this allegation so positively made, as of a known and acknowledged fact, while it charges the Board of Directors with a dereliction of their duty, and a surrender of their trust, does the great- est and most flagrant wrong to the officer who presides over this Institution. This officer has devoted eleven years of the best portion of his life, and all his time and all his talents during that period, to the service of the the Bank: he has at all times, consulted freely with the Directors, and has never sought to make his "single will" the law of the Bank. The proofs of the ability. and integrity of his administration, are to be read in the prosperity and strength of the Institution; in the reiterated approbation of the stockholders; and in the unwavering confidence of the, successive Boards of Di- rectors, who have been the witnesses of his labours. And the Committee confidently believe that such proofs can never be obliterated by such sweeping declarations, let them emanate from what source they may.

The fourth is in the following passage:

"The expenditures purporting to have been made under authority of these resolutions, during the years 1831 and 1832, were about 80,000 dollars."

This, too, is another mis-statement. The expendi- tures purporting to be made under these resolutions du- ring the years 1831 and 1832 were, as will be explained in this report, exactly $48,287 90.

The fifth is; "That publications have been prepared and extensively circulated containing the grossest in- vectives against the officers of the Government; and the money which belongs to the stockholders and to the public, has been freely applied in efforts to degrade, in public estimation, those who were supposed to be in- strumental in resisting the wishes of this grasping and dangerous Institution."

"The fact has been recently disclosed, that an un- limited discretion has been, and is now vested in the President of the Bank to expend its funds in payment for preparing and circulating articles, and purchasing pamphlets and newspapers, calculated by their con- tents to operate on elections and secure a renewal of its charter."

Here are two mistakes: It is not true that any "pub- lications have been prepared and extensively circulat- ed containing the grossest invectives against the offi- cers of the Government." Nor is it true that any pow- er is vested in the President "for preparing and circu- lating articles, and purchasing pamphlets and newspa- pers, calculated by their contents to operate on elec- tions and secure a renewal of its charter." No such power is given, and no such power is exercised.

The power actually given which has been exercised, and will continue to be exercised, is for the defence of the Bank against the calumnies with which for four years, the institution has been pursued.

The sixth is,

"The fact that the Bank controls, and in some cases

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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. XII, Part 116

Author: Hazard, Samuel, 1784-1870 Publication date: 1828 Publisher: Philadelphia : Printed by W.F. Geddes ; Number of Pages: 438

Author: Hazard, Samuel, 1784-1870
Publication date: 1828
Publisher: Philadelphia : Printed by W.F. Geddes ;
Number of Pages: 438