CHAPTER XCII.
REMOVAL OF THE DEPOSITS FROM THE BANK OF THE UNITED STATES
The fact of this removal was communicated to Congress, in the annual message of the President; the reasons for it, and the mode of doing it, were reserved for a separate communication; and especially a report from the Secretary of the Treasury, to whom belonged the absolute right of the removal, without assignment of any reasons except to Congress, after the act was done. The order for the removal, as it was called – for it was only an order to the collectors of revenue to cease making their deposits in that bank, leaving the amount actually in it, to be drawn out of intervals, and in different sums, according to the course at the government disbursements – was issued the 22d of September, and signed by Roger B. Taney, Esq., the new Secretary of the Treasury, appointed in place of Mr. Wm. J. Duane, who, refusing to make the removal, upon the request of the President, was himself removed. This measure (the ceasing to deposit the public moneys with the Bank of the United States) was the President's own measure, conceived by him, carried out by him, defended by him, and its fate dependent upon him. He had coadjutors in every part of the business, but the measure was his own; for this heroic civil measure, like a heroic military resolve, had to be the offspring of one great mind – self-acting and poised – seeing its way through all difficulties and dangers; and discerning ultimate triumph over all obstacles in the determination to conquer them, or to perish. Councils are good for safety, not for heroism – good for escapes from perils, and for retreats, but for action, and especially high and daring action, but one mind is wanted. The removal of the deposits was an act of that kind – high and daring, and requiring as much nerve as any enterprise of arms, in which the President had ever been engaged. His military exploits had been of his own conception; his great civil acts were to be the same: more impeded than promoted by councils. And thus it was in this case. The majority of his cabinet was against him. His Secretary of the Treasury refused to execute his will. A few only – a fraction of the cabinet and some friends – concurred heartily in the act: Mr. Taney, attorney general, Mr. Kendall, Mr. Francis P. Blair, editor of the Globe; and some few others.
He took his measures carefully and deliberately, and with due regard to keeping himself demonstrably, as well as actually right. Observation had only confirmed his opinion, communicated to the previous Congress, of the misconduct of the institution, and the insecurity of the public moneys in it: and the almost unanimous vote of the House of Representatives to the contrary, made no impression upon his strong conviction. Denied a legislative examination into its affairs, he determined upon an executive one, through inquiries put to the government directors, and the researches into the state of the books, which the Secretary of the Treasury had a right to make. Four of those directors, namely, Messrs. Henry D. Gilpin, John T. Sullivan, Peter Wager, and Hugh McEldery, made two reports to the President, according to the duty assigned them, in which they showed great misconduct in its management, and a great perversion of its funds to undue and political purposes. Some extracts from these reports will show the nature of this report, the names of persons to whom money was paid being omitted, as the only object, in making the extracts, is to show the conduct of the bank, and not to disturb or affect any individuals.
"On the 30th November, 1830, it is stated on the minutes, that 'the president submitted to the board a copy of an article on banks and currency, just published in the American Quarterly Review of this city, containing a favorable notice of this institution, and suggested the expediency of making the views of the author more extensively known to the public than they can be by means of the subscription list.' Whereupon, it was, on motion, 'Resolved, That the president be authorized to take such measures, in regard to the circulation of the contents of the said article, either in whole or in part, as he may deem most for the interests of the bank.' On the 11th March, 1831, it again appears by the minutes that 'the president stated to the board, that, in consequence of the general desire expressed by the directors, at one of their meetings of the last year, subsequent to the adjournment of Congress, and a verbal understanding with the board, measures had been taken by him, in the course of that year, for furnishing numerous copies of the reports of General Smith and Mr. McDuffie on the subject of this bank, and for widely disseminating their contents through the United States; and that he has since, by virtue of the authority given him by a resolution of this board, on the 30th day of November last, caused a large edition of Mr. Gallatin's essay on banks and currency to be published and circulated, in like manner, at the expense of the bank. He suggested, at the same time, the propriety and expediency of extending still more widely a knowledge of the concerns of this institution, by means of the republication of other valuable articles, which had issued from the daily and periodical press.' Whereupon, it was, on motion, 'Resolved, That the president is hereby authorized to cause to be prepared and circulated, such documents and papers as may communicate to the people information, in regard to the nature and operations of the bank.'
"In pursuance, it is presumed, of these resolutions, the item of stationary and printing was increased, during the first half year of 1831, to the enormous sum of $29,979 92, exceeding that of the previous half year by $23,000, and exceeding the semi-annual expenditure of 1829, upwards of $26,000. The expense account itself, as made up in the book which was submitted to us, contained very little information relative to the particulars of this expenditure, and we are obliged, in order to obtain them, to resort to an inspection of the vouchers. Among other sums, was one of $7,801, stated to have been paid on orders of the president, under the resolution of 11th March, 1831, and the orders themselves were the only vouchers of the expenditure which we found on file. Some of the orders, to the amount of about $1,800, stated that the expenditure was for distributing General Smith's and Mr. McDuffie's reports, and Mr. Gallatin's pamphlet; but the rest stated generally that it was made under the resolution of 11th of March, 1831. There were also numerous bills and receipts for expenditures to individuals: $1,300 for distributing Mr. Gallatin's pamphlet; $1,675 75 for 5,000 copies of General Smith's and Mr. McDuffie's reports, &c.; $440 for 11,000 extra papers; of the American Sentinel, $125 74 for printing, folding, packing, and postage on 3,000 extras; $1,830 27 for upwards of 50,000 copies of the National Gazette, and supplements containing addresses to members of State legislatures, reviews of Mr. Benton's speech, abstracts of Mr. Gallatin's article from the American Quarterly Review, and editorial article on the project of a Treasury Bank; $1,447 75 for 25,000 copies of the reports of Mr. McDuffie and General Smith, and for 25,000 copies of the address to members of the State legislatures, agreeably to order; $2,850 for 10,000 copies of 'Gallatin on Banking,' and 2,000 copies of Professor Tucker's article.
"During the second half year of 1831, the item of stationery and printing was $13,224 87, of which $5,010 were paid on orders of the president, and stated generally to be under the resolution of 11th March, 1831, and other sums were paid to individuals, as in the previous account, for printing and distributing documents.
"During the first half year of 1832, the item of stationery and printing was $12,134 16, of which $2,150 was stated to have been paid on orders of the president, under the resolution of 11th March, 1831. There are also various individual payments, of which we noticed $106 38 for one thousand copies of the review of Mr. Benton's speech; $200 for one thousand copies of the Saturday Courier; $1,176 for twenty thousand copies of a pamphlet concerning the bank, and six thousand copies of the minority report relative to the bank; $1,800 for three hundred copies of Clarke & Hall's bank book. During the last half year of 1832, the item of stationery and printing rose to $26,543 72, of which $6,350 are stated to have been paid on orders of the president, under the resolution of 11th March, 1831. Among the specified charges we observe $821 78 for printing a review of the veto; $1,371 04 for four thousand copies of Mr. Ewing's speech, bank documents, and review of the veto; $4,106 13 for sixty-three thousand copies of Mr. Webster's speech, Mr. Adams's and Mr. McDuffie's reports, and the majority and minority reports; $295 for fourteen thousand extras of The Protector, containing bank documents; $2,583 50 for printing and distributing reports, Mr. Webster's speech, &c. $150 12 for printing the speeches of Messrs. Clay, Ewing, and Smith, and Mr. Adams's report; $1,512 75 to Mr. Clark, for printing Mr. Webster's speech and articles on the veto, and $2,422 65 for fifty-two thousand five hundred copies of Mr. Webster's speech. There is also a charge of $4,040 paid on orders of the president, stating that it is for expenses in measures for protecting the bank against a run on the Western branches.
"During the first half year of 1833, the item of stationery and printing was $9,093 59, of which $2,600 are stated to have been paid on orders of the president, under the resolution of 11th March, 1831. There is also a charge of $800 for printing the report of the exchange committee."
These various items, amounting to about $80,000, all explain themselves by their names and dates – every name of an item referring to a political purpose, and every date corresponding with the impending questions of the recharter and the presidential election; and all charged to the expense account of the bank – a head of account limited, by the nature of the institution, so far as printing was concerned, to the printing necessary for the conducting of its own business; yet in the whole sum, making the total of $80,000, there is not an item of that kind included. To expose, or correct these abuses, the government directors submitted the following resolution to the board:
"Whereas, it appears by the expense account of the bank for the years 1831 and 1832, that upwards of $80,000 were expended and charged under the head of stationery and printing during that period; that a large proportion of this sum was paid to the proprietors of newspapers and periodical journals, and for the printing, distribution, and postage of immense numbers of pamphlets and newspapers; and that about $20,000 were expended under the resolutions of 30th November, 1830, and 11th March, 1831, without any account of the manner in which, or the persons to whom, they were disbursed: and whereas it is expedient and proper that the particulars of this expenditure, so large and unusual, which can now be ascertained only by the examination of numerous bills and receipts, should be so stated as to be readily submitted to, and examined by, the board of directors and the stockholders: Therefore, Resolved, That the cashier furnish to the board, at as early a day as possible, a full and particular statement of all these expenditures, designating the sums of money paid to each person, the quantity and names of the documents furnished by him, and his charges for the distribution and postage of the same; together with as full a statement as may be of the expenditures under the resolutions of 30th November, 1830, and 11th March, 1831. That he ascertain whether expenditures of the same character have been made at any of the offices, and if so, procure similar statements thereof, with the authority on which they were made. That the said resolutions be rescinded, and no further expenditures made under the same."
This resolution was rejected by the board, and in place of it another was adopted, declaring perfect confidence in the president of the bank, and directing him to continue his expenditures under the two resolves of November and March according to his discretion; – thus continuing to him the power of irresponsible expenditure, both in amount and object, to any extent that he pleased. The reports also showed that the government directors were treated with the indignity of being virtually excluded, both from the transactions of the bank, and the knowledge of them; and that the charter was violated to effect these outrages. As an instance, this is given: the exchange committee was in itself, and even confined to its proper duties, that of buying and selling exchange, was a very important one, having the application of an immense amount of the funds of the bank. While confined to its proper duties, it was changed monthly, and the directors served upon it by turns; so that by the process of rotation and speedy renewal, every member of the directory was kept well informed of the transactions of this committee, and had their due share in all its great operations. But at this time – (time of the renewed charter and the presidential election) – both the duties of the committee, and its mode of appointment were altered; discounting of notes was permitted to it, and the appointment of its members was invested in Mr. Biddle; and no government director was henceforth put upon it. Thus, a few directors made the loans in the committee's room, which by the charter could only be made by seven directors at the board; and the government directors, far from having any voice in these exchange loans, were ignorant of them until afterwards found on the books. It was in this exchange committee that most of the loans to members of Congress were made, and under whose operations the greatest losses were eventually incurred. The report of the four directors also showed other great misconduct on the part of the bank, one of which was to nearly double its discounts at the approaching termination of the charter, running them up in less than a year and a half from about forty-two and a half to about seventy and a half millions of dollars. General Jackson was not the man to tolerate these illegalities, corruptions and indignities. He, therefore, determined on ceasing to use the institution any longer as a place of deposit for the public moneys; and accordingly communicated his intention to the cabinet, all of whom had been requested to assist him in his deliberations on the subject. The major part of them dissented from his design; whereupon he assembled them the 22nd of September, and read to them a paper, of which the following are the more essential parts:
"Having carefully and anxiously considered all the facts and arguments which have been submitted to him, relative to a removal of the public deposits from the Bank of the United States, the President deems it his duty to communicate in this manner to his cabinet the final conclusions of his own mind, and the reasons on which they are founded, in order to put them in durable form, and to prevent misconceptions.
"The President's convictions of the dangerous tendencies of the Bank of the United States, since signally illustrated by its own acts, were so overpowering when he entered on the duties of chief magistrate, that he felt it his duty, notwithstanding the objections of the friends by whom he was surrounded, to avail himself of the first occasion to call the attention of Congress and the people to the question of its recharter. The opinions expressed in his annual message of December, 1829, were reiterated in those of December, 1830 and 1831, and in that of 1830, he threw out for consideration some suggestions in relation to a substitute. At the session of 1831-'32 an act was passed by a majority of both Houses of Congress rechartering the present bank, upon which the President felt it his duty to put his constitutional veto. In his message, returning that act, he repeated and enlarged upon the principles and views briefly asserted in his annual messages, declaring the bank to be, in his opinion, both inexpedient and unconstitutional, and announcing to his countrymen, very unequivocally, his firm determination never to sanction, by his approval, the continuance of that institution or the establishment of any other upon similar principles.
"There are strong reasons for believing that the motive of the bank in asking for a recharter at that session of Congress, was to make it a leading question in the election of a President of the United States the ensuing November, and all steps deemed necessary were taken to procure from the people a reversal of the President's decision.
"Although the charter was approaching its termination, and the bank was aware that it was the intention of the government to use the public deposit as fast as it has accrued, in the payment of the public debt, yet did it extend its loans from January, 1831, to May, 1832, from $42,402,304 24 to $70,428,070 72, being an increase of $28,025,766 48, in sixteen months. It is confidently believed that the leading object of this immense extension of its loans was to bring as large a portion of the people as possible under its power and influence; and it has been disclosed that some of the largest sums were granted on very unusual terms to the conductors of the public press. In some of these cases, the motive was made manifest by the nominal or insufficient security taken for the loans, by the large amounts discounted, by the extraordinary time allowed for payment, and especially by the subsequent conduct of those receiving the accommodations.
"Having taken these preliminary steps to obtain control over public opinion, the bank came into Congress and asked a new charter. The object avowed by many of the advocates of the bank, was to put the President to the test, that the country might know his final determination relative to the bank prior to the ensuing election. Many documents and articles were printed and circulated at the expense of the bank, to bring the people to a favorable decision upon its pretensions. Those whom the bank appears to have made its debtors for the special occasion, were warned of the ruin which awaited them, should the President be sustained, and attempts were made to alarm the whole people by painting the depression in the price of property and produce, and the general loss, inconvenience, and distress, which it was represented would immediately follow the re-election of the President in opposition to the bank.
"Can it now be said that the question of a recharter of the bank was not decided at the election which ensued? Had the veto been equivocal, or had it not covered the whole ground – if it had merely taken exceptions to the details of the bill, or to the time of its passage – if it had not met the whole ground of constitutionality and expediency, then there might have been some plausibility for the allegation that the question was not decided by the people. It was to compel the President to take his stand, that the question was brought forward at that particular time. He met the challenge, willingly took the position into which his adversaries sought to force him, and frankly declared his unalterable opposition to the bank as being both unconstitutional and inexpedient. On that ground the case was argued to the people, and now that the people have sustained the President, notwithstanding the array of influence and power which was brought to bear upon him, it is too late, he confidently thinks, to say that the question has not been decided. Whatever may be the opinions of others, the President considers his re-election as a decision of the people against the bank. In the concluding paragraph of his veto message he said:
"'I have now done my duty to my country. If sustained by my fellow-citizens, I shall be grateful and happy; if not, I shall find in the motives which impel me, ample grounds for contentment and peace.'
"He was sustained by a just people, and he desires to evince his gratitude by carrying into effect their decision, so far as it depends upon him.
"Of all the substitutes for the present bank, which have been suggested, none seems to have united any considerable portion of the public in its favor. Most of them are liable to the same constitutional objections for which the present bank has been condemned, and perhaps to all there are strong objections on the score of expediency. In ridding the country of an irresponsible power which has attempted to control the government, care must be taken not to unite the same power with the executive branch. To give a President the control over the currency and the power over individuals now possessed by the Bank of the United States, even with the material difference that he is responsible to the people, would be as objectionable and as dangerous as to leave it as it is. Neither the one nor the other is necessary, and therefore ought not to be resorted to.
"But in the conduct of the bank may be found other reasons, very imperative in their character, and which require prompt action. Developments have been made from time to time of its faithlessness as a public agent, its misapplication of public funds, its interference in elections, its efforts, by the machinery of committees, to deprive the government directors of a full knowledge of its concerns, and above all, its flagrant misconduct as recently and unexpectedly disclosed, in placing all the funds of the bank, including the money of the government, at the disposition of the president of the bank, as means of operating upon public opinion and procuring a new charter without requiring him to render a voucher for their disbursement. A brief recapitulation of the facts which justify these charges and which have come to the knowledge of the public and the President, will, he thinks, remove every reasonable doubt as to the course which it is now the duty of the President to pursue.
"We have seen that in sixteen months, ending in May, 1832, the bank had extended its loans more than $28,000,000, although it knew the government intended to appropriate most of its large deposit during that year in payment of the public debt. It was in May, 1832, that its loans arrived at the maximum, and in the preceding March, so sensible was the bank that it would not be able to pay over the public deposit when it would be required by the government, that it commenced a secret negotiation without the approbation or knowledge of the government, with the agents, for about $2,700,000 of the three per cent. stocks held in Holland, with a view of inducing them not to come forward for payment for one or more years after notice should be given by the Treasury Department. This arrangement would have enabled the bank to keep and use during that time the public money set apart for the payment of these stocks.
"Although the charter and the rules of the bank, both, declare that 'not less than seven directors' shall be necessary to the transaction of business, yet, the most important business, even that of granting discounts to any extent, is intrusted to a committee of five members who do not report to the board.
"To cut off all means of communication with the government, in relation to its most important 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 unusual remodelling of those bodies, some of those directors have been placed on some of the committees, they are yet entirely excluded from the committee of exchange, through which the greatest and most objectionable loans have been made.
"When the government directors made an effort to bring back the business of the bank to the board, in obedience to the charter and the existing regulations, the board not only overruled their attempt, but altered the rule so as to make it conform to the practice, in direct violation of one of the most important provisions of the charter which gave them existence.
"It has long been known that the president of the bank, by his single will, originates and executes many of the most important measures connected with the management and 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 correspondence carried on, in their names, and apparently under their authority. The fact has been recently disclosed, that an unlimited 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 contents to operate on elections and secure a renewal of its charter.
"With these facts before him, in an official report from the government directors, the President would feel that he was not only responsible for all the abuses and corruptions the bank has committed, or may commit, but almost an accomplice in a conspiracy against that government which he has sworn honestly to administer, if he did not take every step, within his constitutional and legal power, likely to be efficient in putting an end to these enormities. If it be possible, within the scope of human affairs, to find a reason for removing the government deposits, and leaving the bank to its own resource for the means of effecting its criminal designs, we have it here. Was it expected, when the moneys of the United States were directed to be placed in that bank, that they would be put under the control of one man, empowered to spend millions without rendering a voucher or specifying the object? Can they be considered safe, with the evidence before us that tens of thousands have been spent for highly improper, if not corrupt, purposes, and that the same motive may lead to the expenditure of hundreds of thousands and even millions more? And can we justify ourselves to the people by longer lending to it the money and power of the government, to be employed for such purposes?
"In conclusion, the President must be permitted to remark that he looks upon the pending question as of higher consideration than the mere transfer of a sum of money from one bank to another. Its decision may affect the character of our government for ages to come. Should the bank be suffered longer to use the public moneys, in the accomplishment of its purposes, with the proof of its faithlessness and corruption before our eyes, the patriotic among our citizens will despair of success in struggling against its power; and we shall be responsible for entailing it upon our country for ever. Viewing it as a question of transcendent importance, both in the principles and consequences it involves, the President could not, in justice to the responsibility which he owes to the country, refrain from pressing upon the Secretary of the Treasury his view of the considerations which impel to immediate action. Upon him has been devolved, by the constitution and the suffrages of the American people, the duty of superintending the operation of the Executive departments of the governments, and seeing that the laws are faithfully executed. In the performance of this high trust, it is his undoubted right to express to those whom the laws and his own choice have made his associates in the administration of the government, his opinion of their duties, under circumstances, as they arise. It is this right which he now exercises. Far be it from him to expect or require that any member of the cabinet should, at his request, order, or dictation, do any act which he believes unlawful, or in his conscience condemns. From them, and from his fellow-citizens in general, he desires only that aid and support which their reason approves and their conscience sanctions.
"The President again repeats that he begs his cabinet to consider the proposed measure as his own, in the support of which he shall require no one of them to make a sacrifice of opinion or principle. Its responsibility has been assumed, after the most mature deliberation and reflection, as necessary to preserve the morals of the people, the freedom of the press, and the parity of the elective franchise, without which, all will unite in saying that the blood and treasure expended by our forefathers, in the establishment of our happy system of government, will have been vain and fruitless. Under these convictions, he feels that a measure so important to the American people cannot be commenced too soon; and he, therefore, names the first day of October next as a period proper for the change of the deposits, or sooner, provided the necessary arrangements with the State banks can be made."
I was in the State of Virginia, when the Globe newspaper arrived, towards the end of September, bringing this "paper," which the President had read to his cabinet, and the further information that he had carried his announced design into affect. I felt an emotion of the moral sublime at beholding such an instance of civic heroism. Here was a President, not bred up in the political profession, taking a great step upon his own responsibility from which many of his advisers shrunk; and magnanimously, in the act itself, releasing all from the peril that he encountered, and boldly taking the whole upon himself. I say peril; for if the bank should conquer, there was an end to the political prospects of every public man concurring in the removal. He believed the act to be necessary; and believing that, he did the act – leaving the consequences to God and the country. I felt that a great blow had been struck, and that a great contest must come on, which could only be crowned with success by acting up to the spirit with which it had commenced. And I repaired to Washington at the approach of the session with a full determination to stand by the President, which I believed to be standing by the country; and to do my part in justifying his conduct, and in exposing and resisting the powerful combination which it was certain would be formed against him.