SENATE.]

Removal of the Deposits.

[JANUARY, 1834.

session of them, unless we are particularly It is by confounding propositions, and so plain directed where to place them. If, then, a per- as these, by making no distinction between son is to collect debts, he is also to keep them, taking money out of the treasury, and directing unless directed to the contrary. Again: do where it shall be placed in the treasury, that not the acts recognizing the Secretary as the great misconduct is alleged, and ill language head of the department give him also the used, and imputations of base motives are cast power to direct others in the performance of upon the President and the Secretary, as if the their duties? The head of the department money had been scooped out of the treasury, stands in the same relation to those around him and carried off, instead of being in the Treasas the head does to the members of the natural urer's keeping. It is only moved from one side body. And, sir, in this state of the legal power of Chesnut street or State street to the other, -a discretionary power to collect, and of course being still in the treasury. to preserve when collected-what becomes of the grounds of the alarm which has been raised that the Secretary has assumed legislative power? Sir, they are all assertions, mere assertions-contradicted by the fact.

Sir, the Senator from South Carolina has argued that the Secretary claims the power to order the place of deposit, in the absence of legislation: but there is legislation; and, therefore, to take the money out of the United States Bank was an error, because he asserted there was no legislation, when there was. It is true there was legislation, that while it was in the bank it was to be kept there. But when the power of removal is used as the law provides, there is then an absence of legislation; and if the Senator meant to go further than this, he is in error. He also represents the Treasurer to have the power, and not the Secretary; but the Treasurer has no power to move or remove, but under the direction of the Secretary, as the head. He has power to keep it, but the place where is to be designated under the direction of the Secretary.

It is alleged by the Senator that the Secretary supposes Congress had the power to dispose of the moneys of the United States as the public interest and convenience might require; and that Congress, not having exercised that power, the Secretary had the power to dispose of it; and that he was in error in both his propositions: for if Congress had such power, the money might be applied to any fanatical scheme. Why, sir, Congress has the power of disposal; but it is controlled in its exercise by the proper objects of legislation; it may go so far, and no further. If all that was meant is, that Congress had no power to spend the money for improper

The Secretary has been censured because he thought it was singular that such a power should be intrusted to him, and that Congress had not legislated and informed him in what manner and where he was to have the money kept. I do not think it necessary now to inquire why provision was not made in this respect by law. Provision was not made until the United States Bank was selected; prior to that period no place was designated by law; and when the moneys are not deposited in that bank, but are directed by the Secretary not to be deposited there, there is again no place of deposit designated by law. But, sir, it has been alleged that the Treasurer is the only person who is entitled to take charge of the public moneys. He is the proper person, but he is to keep them subject to the control of the head of the department. The latter may order him in what place to keep them. The whole argument against the Secretary has proceeded on the assumption that he has taken the deposits out of the hands of the Treasurer, and kept them himself. He has never, sir, done this. The Secretary has never touched it, never contemplated the actual keeping of the money, but only told the Treasurer where he should keep it; and now there is much alarm of his abuse of power. But there is a distinc-purposes, or upon projects not within the legitition: instead of keeping it himself, under his own supervision, he tells the Treasurer the place, and tells him to keep it there. It is not out of the power or control of the Treasurer. It is said the Treasurer is responsible; and he is so, as he always has been, precisely; there is no change, save that the Treasurer is to keep it in a different vault from what he did. But he has no money if the Secretary may take it away, says the Senator from New Jersey. Who, sir, has taken it away, or proposed to take it away? The Secretary does not take it away; he only orders the Treasurer where to keep it in his own possession, that it may be most convenient and useful to the Government. It is not in the Treasurer's power, except as keeper; the Secretary cannot take it out of his keeping; the President cannot. It all resolves itself into this simple proposition, that there is no money taken out of the treasury.

mate sphere of legislation, I agree with him; that power is neither in Congress nor the Secretary. And the Secretary has not claimed for Congress or himself any such power. All he has claimed was a right, in the absence of legislation by Congress, to say where the money should be kept by the Treasurer. And here is the fallacy of the whole argument.

The removal of a former Secretary of the Treasury is another supposed assumption of arbitrary power; and his character has been lauded for the purpose of aggravating the alleged arbitrary and oppressive character of the act. Sir, I am of opinion that no laurels are to be gathered by us from the consideration of the fact that he ever was Secretary; and if there be any thing of praise or of glory to be gained by their taking his name and honor into their keeping, I wish them joy of the acquisition.

The right to remove the Secretary is denied

Inquiry into the Public Distress-Removal of the Deposits.

by the Senator from Kentucky. The power of
removal is given in that clause of the constitu-
tion giving the President the power to appoint
all officers whose appointment is not otherwise
provided for in the constitution. This power
is not limited to the filling of vacancies, and,
of course, carries the power of substitution.
This construction was given to the constitution | the deposits.]
in the act creating the Treasury Department.
The power now denied and denounced as tyran-
nical is expressly given in that law. It is as

The practice has been uniform; and this is a new doctrine, for present effect, not for future The letter having been shown to Mr. W., use. And this is the power, thus given in the Mr. POINDEXTER inquired whether the gentleconstitution, sanctioned by Congress, and prac-man was not connected with one of the pet banks. tised upon, that is denounced as oppressive, and as causing a revolution.

SENATE.]

Removal of the Deposits.

one of the highest importance, deriving an especial interest from the distress and embarrassment which are said at the present moment to pervade the community. In regard to the extent of that distress, it may, and probably has been exaggerated, and it is destined, I trust, above all, to be of transitory duration. But that it has existed, and still exists to a very considerable extent, there can be no doubt; and we are now called upon to investigate the causes of the evil, and to apply a suitable and effectual remedy. But, in the performance of this office, let us be careful not to mistake a mere symptom for the disease itself, and by an empirical practice addressed to the momentary palliation or removal of the one, to add to and confirm the violence and danger of the other.

(JANUARY, 1834. It will hardly now be contended, I presume, by any gentleman who has taken the trouble to examine the subject, that the present distress is the necessary consequence of the removal of the public deposits from the Bank of the United States. It has been expressly admitted, in a quarter entitled to the highest consideration, not only from the distinguished eminence of the gentleman himself, but from the special relation in which he stands to the bank, [Mr. R. here alluded to the speech of Mr. Binney in the House of Representatives,] that the removal of the deposits per se is not a sufficient or justifiable cause for the present distress-that this removal is a thing which might happen, and had happened before in the history of the bank, without producing any distress or inconvenience For myself, sir, I believe that the disease is to the community. Sir, a removal of the public far more deeply seated than the honorable deposits from the bank happens, in effect, whenmover of the resolutions now under considera- ever an application of the public moneys to the tion supposes. It has its origin in the vices public debt, or to the current expenses of the of our own legislation, and will require the Government, exhausts the amount which is to cautery and the knife for its extirpation. I am the credit of the United States in Bank. If we not less sensible, I trust, sir, than other gentle- are to credit the book which the bank itself men, to the sufferings of any portion of my has laid on our desks, (the report of its comfellow-citizens, but I must say that the present mittee on the exposition of the President to his crisis, whatever be its severity, comes alleviated Cabinet,) à removal of the deposits, in this way, by one high consolation. It is calculated to has occurred at a very recent period, without awaken, and I trust it will awaken, all of us to leading to any pressure on the community. the true nature and dangerous character of that The bank informs us, in that document, that formidable moneyed power which we have built in the month of March last, when the protested up by our own laws, and which now sits en- bill on the French Government returned upon throned upon our statute book in the pride of it, there was, after deducting the advances it chartered prerogative. Sir, we have hereto- had made on that bill, "less than two thousand fore been singularly deaf to the monitory lessons dollars of the whole funds of the Government delivered to us by our fathers and predecessors. in the bank!" And yet it appears from its In vain did the republican statesmen of '91 warn monthly returns that, notwithstanding this exus of the fatal consequences of this "first trans-haustion of the public deposits, it was at that gression" of the sacred limits of the constitution time actually enlarging, instead of curtailing its -in vain did Mr. Jefferson, in that prophetic discounts. passage which was read to us the other day by the Senator from Missouri, (Mr. BENTON,) tell us that of all possible institutions "this was the one of most deadly hostility against the principles and form of our constitution," and that if permitted to exist, it would one day reduce the constituted authorities of the nation themselves under vassalage to its will. In vain, sir, did the eloquent voice of the Senator from Kentucky himself, (Mr. CLAY,) on another occasion, warn us that this corporation, though then wielding less than one-third of its present capital and resources, was fraught with the most serious "danger to our liberties "-liberties which the honorable Senator seems now to think can be preserved only by upholding this same corporation against the just animadversions of the public functionaries appointed to supervise it. Sir, all these warnings have been unheeded by us, till the distresses which it has now wantonly inflicted upon the country, with the obvious design of influencing and controlling our proceedings here, must have brought home to all of us, I trust, a deep conviction of the danger and capacities of mischief inherent in this great monopoly.

|

Sir, if the removal of the deposits has produced the late severe and grinding pressure, upon the community, there is a singular disproportion indeed, between the cause and the effect. It appears from statements now before me, that, on the 1st day of August last, when the bank commenced its curtailments, the amount of public deposits in its vaults was $7,599,841;~ on the 1st of December, that amount was still $5,162,259, making a diminution of $2,437,582 only. By the returns of the bank, it is shown that on the 1st of August its discounts amounted to $64,160,349. On the 1st of December they were $54,453,104, making a reduction of discounts, in four months, of near ten millions, to meet a diminution of deposits of less than two and a half millions; and this by an institution which, according to its own showing, had not only not reduced, but actually enlarged its discounts, at a time when the public deposits in its vaults had, by rapid and large diminutions, been brought down to "less than two thousand dollars!

It is clear, then, that the removal of the deposits alone has not produced the existing distress. But it was the removal of the deposits

JANUARY, 1834.]

Removal of the Deposits.

[SENATE.

connected (as we are told, from the same authen- | vaunted, and now so wantonly put in practice, tic quarter already referred to) with the doc- we have been aroused to a sense of our danger, trine that the operations of the Government before it is too late to provide for our security. and the business of the community, can hence- The true seat of the disease with which the forward be carried on without the Bank of the body politic is affected, is here: it is in the United States it was the intention manifested existence of this powerful, remorseless, and "of separating the people from the bank, and overshadowing monopoly. What, then, is the the bank from the people," as it is expressed, remedy? Is it by succumbing to its dictation, which produced the convulsion. We are then to add to its power by restoring the deposits, to presume, that it was to put down this doc- (the grand panacea proposed to us,) to increase trine-to demonstrate the dependence of the its resources for future annoyance, to enlarge its Government and nation on this great institu- means of influence, and multiply the chances of tion-to show that the people cannot be "sepa-perpetuating its existence? Sir, if we have not rated" from it without ruin and confusionthat all this distress has been visited upon the country.

With like views, doubtless, an exhibit was presented of the annual operations of the bank in the various forms of exchange, domestic and foreign, discounts, circulation of notes, &c.; showing the extent, the alarming extent, to which this institution has mixed itself up with, and acquired a control over, the ordinary business and interests of the country. Sir, if there be gentlemen here who do not see in this exhibit a most fearful revelation of the power and influence of the bank, they have, I confess, much firmer nerves than I can pretend to. It appears from this portentous paper, that the operations of the Bank of the United States, in domestic exchanges alone, under one form or another, during the year 1832, amounted to $241,717,910 13,456,787

In foreign exchange,

Total amount of exchange, $255,174,647 Two hundred and fifty-five millions one hundred and seventy-four thousand and six hundred and forty-seven dollars!

To which must be added the loans and discounts of the bank, which averaged in that year, $66,871,349

And the circulation of notes of the bank, averaging for the same year, $20,309,342 Now, sir, I would ask every candid and reflecting man if an institution enjoying such a monopoly as this, of the general commerce and circulation of the country, incorporating itself, as it has been its policy to do, with the ordinary transactions of the community to so fearful an amount, exercising, consequently, a control over the fortunes and interests, the fears and hopes, of so many persons-if such an institution does not wield a power of the most tremendous and alarming character-a power altogether unchecked by the State banks, for the Senate will recollect the significant statement made by the president of the bank to a committee of this House in 1830, that "there are very few banks (State) which might not be destroyed by an exertion of the power of the bank (U. S.") Sir, sooner or later, evil, dire evil, must have come, of so tremendous a power, unchecked and irresponsible, concentrated in the hands of & great moneyed corporation. It is well that "by an exertion of that power," so significantly

firmness to resist the panic which the bank has made a pretext of the removal of the deposits for creating, how much less shall we be able to bear the more serious pressure for which it will find a real and operative cause in the expiration of its charter, when, to provide for its returning circulation, and the payment of its stockholders and its depositors, it must call in, instead of ten millions, the whole sixty or seventy millions of debt due to it? Sir, can any one have been so unreflecting as to suppose that we should ever be able to throw off the frightful incubus of this bloated monopoly, without a bitter and painful struggle? Has the experience of 1811, when the charter of the first bank of the United States expired, been entirely forgotten? Then, as now, the same scene of bringing forward the State banks in Philadelphia, as advocates on behalf of the United States Bank, was gotten up, with this honorable distinction in favor of the present times, that then all of those banks came forward at the bidding of the United States Bank, now, some five or six of them have had the firmness to refuse. Then there were not only memorials from boards of trade, and public meetings, as now, but there were formal deputations sent to this place, to lay their complaints before Congress, and a committee of this body was appointed to hear and investigate them. Then, too, there was a pause in the operations of trade; and the products of agriculture sustained a depression, of which the fact then stated in Congress, that flour had fallen in a few days from ten to seven dollars, may serve as a set-off to all that we have heard on this floor, for some days past, concerning the ominous decline in the price of cotton. But, sir, our predecessors had the firmness to stand up against all this terrorism, and to regard the cause of the constitution and the public liberty as dearer to the American people than the transitory state of the money market.

I hope, sir, we shall follow their example. If we yield to the panic with which we are now assailed, and restore the deposits, which the bank has, by its misconduct, justly forfeited, the triumph of this dangerous and unconstitutional institution is complete, and its re-charter virtually decided. Do we not all here feel that these questions are one and the same? Does not the whole course of the arguments we have heard on the modus operandi of the removal of the deposits in producing the existing

SENATE.]

Removal of the Deposits.

[JANUARY, 1834.

are forced in self-defence to contract also. Whatever influence such an institution may be supposed to exert, in preserving the soundness of the currency, that object would be much more effectually promoted by a return, as far as practicable, to a metallic circulation. The first

distress, and in what manner their restoration | expand with it; when it contracts, those banks would tend to relieve it, show that neither the removal nor the restoration are regarded, except as signs expressing the termination or renewal of the bank charter; and that, in truth, it is the bank itself, and not the deposits, which is in issue? Restore the deposits, and what will happen? Another sudden and great ex-step towards that return is to let the Bank of pansion of discounts by the bank, bringing more and more of the community within its power, | and at the end of two years when its charter expires, if any resistance should then be offered to its renewal, we shall find ourselves in the merciless gripe of another bank contraction, far more agonizing than one we now endure-a crisis to which our courage and principles must certainly prove inadequate, if we have not the firmness to meet the present trial. On the other hand, if the deposits, being withdrawn, are permitted to remain so, the bank will see in that resolution its own fate finally determined -with such an admonition, it will go on gradually to prepare for the winding up of its affairs, (for, happily, it will not have it in its power to inflict further injury on the community, without doing still greater injury to its own interests,) the State Banks at the same time, will be enabled progressively to extend their accommodations, and we shall finally get rid of this tyran-perity of the country. nical and unconstitutional monopoly, at the expense of no other suffering than that to which we have already been subjected.

It is in view of this great consummation, Mr. President, the final extinction of this dangerous and unconstitutional moneyed corporation, overshadowing alike the Government and the people, that I, for one, am willing to let the measures which have been taken have their

course.

the United States go down. Its notes being withdrawn, the convenience of travelling alone would immediately create a demand for gold coins, as a substitute, and enforce the necessity of correcting that under-valuation of them at the mint, which is said to have contributed to their disappearance. In concurrence with this, let measures be taken, as it is believed effectual measures may be taken, to discourage and suppress the circulation of bank notes under a certain denomination, (ten or twenty dollars,) of which the effect would be, to produce another accession to the metallic circulating medium. The ordinary channels of circulation being thus supplied with gold and silver, the Government would be prepared, without hardship to the public creditor, to require payment of its dues in specie, and thus realize a reform, than which none could be more deeply interesting, in every aspect, to the safety and pros

Sir, here is an object worthy to engage the most anxious labors of the patriot and statesman, and I feel persuaded that, with a tithe of the effort and talent daily expended in the ephemeral contests of party, he should see it happily accomplished. I conjure gentlemen, then, with ability so eminently fitted for this great work, to leave the Bank of the United States to its fate-a fate already pronounced by the voice of the nation, and called for by the highest considerations connected with the safety of our free institutions and bring forward their powerful aid in an effort to restore the Government to its true constitutional character and destination-that of a simple, solid, hardmoney Government.

Sir, of all the reforms, social, political, or economical, required by the great interests of the country, that which is most urgently demanded, and which promises in its accomplishment the largest results of utility, security, and public benefit, is, beyond comparison, the restoration of the Government to what it was intended by But I shall doubtless be asked, Mr. President, the framers of the constitution to be, a hard- if, in this instance, the public faith has been money Government. We are too much in the broken, and the rights of the bank violated, habit, Mr. President, of regarding the evils of will I not repair the breach, and redress the the paper system as necessary and incurable, wrong? Sir, if such were the case, I would, but and of being content with the delusive palliation in my humble judgment, and I hope to be able of those evils supposed to be derived from the to show it, the public faith has sustained no controlling supremacy of a National Bank. violation-the bank no wrong; and this brings Nothing, in my opinion, is more demonstrable us to the consideration of the rights of the bank, than that the great evil of that system, its as secured by its charter. Gentlemen have ruinous fluctuations arising from alternate ex- argued as if the bank, by the bonus which it pansions and contractions of bank issues, mak-paid, of a million and a half of dollars, had ing a lottery, in effect, of private fortunes, and purchased a right to the deposits of the public converting all perspective contracts and trans-money. But nothing is more obvious, from the actions into a species of gambling-nothing can be more certain than that these ruinous fluctuations (and we have a striking proof of it in the present distresses of the country) are increased, instead of being diminished, by the existence of an institution of such absolute ascendency, that when it expands the State Banks

face of the bank charter itself, and especially from the report of the Secretary of the Treasury, (Mr. Dallas,) which transmitted and explained it, than that the bonus was the consideration, not for the public deposits, but for the charter grant-for the act of incorporation, conferring on the subscribers to that bank the