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CHAPTER XCV.
NOMINATION OF GOVERNMENT DIRECTORS, AND THEIR REJECTION

By the charter of the bank, the government was entitled to five directors, to be nominated annually by the President, and confirmed by the Senate. At the commencement of the session of 1833-'34, the President nominated the five, four of them being the same who had served during the current year, and who had made the report on which the order for the removal of the deposits was chiefly founded. This drew upon them the resentment of the bank, and caused them to receive a large share of reproach and condemnation in the report which the committee of the bank drew up, and which the board of directors adopted and published. When these nominations came into the Senate it was soon perceived that there was to be opposition to these four; and for the purpose of testing the truth of the objections, Mr. Kane, of Illinois, submitted the following resolution:

"Resolved, That the nominations of H. D. Gilpin, John T. Sullivan, Peter Wager, and Hugh McEldery, be recommitted to the Committee on Finance, with instructions to inquire into their several qualifications and fitness for the stations to which they have been nominated; also into the truth of all charges preferred by them against the board of directors of the Bank of the United States, and into the conduct of each of the said nominees during the time he may have acted as director of the said bank; and that the said nominees have notice of the times and places of meetings of said committee, and have leave to attend the same."

Which was immediately rejected by the following vote:

"Yeas. – Messrs. Benton, Brown, Forsyth, Grundy, Hendricks, Hill, Kane, King of Alabama, Linn, McKean, Moor, Morris, Rives, Robinson, Shepley, Tallmadge, Tipton, White, Wilkins, Wright. – 20.

"Nays. – Messrs. Bell, Bibb, Black, Calhoun, Chambers, Clay, Clayton, Ewing, Frelinghuysen, Kent, King of Georgia, Knight, Mangum, Naudain, Poindexter, Porter, Prentiss, Robbins, Silsbee, Smith, Southard, Sprague, Swift, Tomlinson, Tyler, Waggaman, Webster. – 27."

And this resolution being rejected, requiring a two-fold examination – one into the character and qualifications of the nominees, the other into the truth of their representations against the bank, it was deemed proper to submit another, limited to an inquiry into the character and fitness of the nominees; which was rejected by the same vote. The nominations were then voted upon separately, and each of the four was rejected by the same vote which applied to the first one, to wit, Mr. Gilpin: and which was as follows:

"Yeas. – Messrs. Benton, Black, Brown, Forsyth, Grundy, Hendricks, Hill, Kane, King of Alabama, Linn, McKean, Moore, Morris, Robinson, Shepley, Tallmadge, Tipton, White, Wilkins, Wright. – 20.

"Nays. – Messrs. Bell, Bibb, Calhoun, Chambers, Clay, Ewing, Frelinghuysen, Kent, Knight, Mangum, Naudain, Poindexter, Porter, Prentiss, Preston, Robbins, Silsbee, Smith, Sprague, Swift, Tomlinson, Tyler, Waggaman, Webster. – 24."

These rejections being communicated to the President, he immediately felt that it presented a new case for his energy and decision of conduct. The whole of the rejected gentlemen had been confirmed the year before – had all acted as directors for the current year – and there was no complaint against them except from the Bank of the United States; and that limited to their conduct in giving information of transactions in the bank to President Jackson at his written request. Their characters and fitness were above question. That was admitted by the Senate, both by its previous confirmation for the same places, and its present refusal to inquire into those points. The information which they had given to the President had been copied from the books of the bank, and the transactions which they communicated had been objected to by them at the time as illegal and improper; and its truth, unimpeachable in itself, was unimpeached by the Senate in their refusal to inquire into their conduct while directors. It was evident then that they had been rejected for the report which they made to the President; and this brought up the question, whether it was right to punish them for that act? and whether the bank should have the virtual nomination of the government directors by causing those to be rejected which the government nominated? and permitting none to serve but those whose conduct should be subordinate to the views and policy of the bank? These were questions, first, for the Senate, and then for the country; and the President determined to bring it before both in a formal message of re-nomination. He accordingly sent back the names of the four rejected nominations in a message which contained, among others, these passages:

"I disclaim all pretension of right on the part of the President officially to inquire into, or call in question, the reasons of the Senate for rejecting any nomination whatsoever. As the President is not responsible to them for the reasons which induce him to make a nomination, so they are not responsible to him for the reasons which induce them to reject it. In these respects, each is independent of the other and both responsible to their respective constituents. Nevertheless, the attitude in which certain vital interests of the country are placed by the rejection of the gentlemen now re-nominated require of me, frankly, to communicate my views of the consequences which must necessarily follow this act of the Senate, if it be not reconsidered.

"The characters and standing of these gentlemen are well known to the community, and eminently qualify them for the offices to which I propose to appoint them. Their confirmation by the Senate at its last session to the same offices is proof that such was the opinion of them entertained by the Senate at that time; and unless some thing has occurred since to change it, this act may now be referred to as evidence that their talents and pursuits justified their selection.

"The refusal, however, to confirm their nominations to the same offices, shows that there is something in the conduct of these gentlemen during the last year which, in the opinion of the Senate, disqualifies them; and as no charge has been made against them as men or citizens, nothing which impeaches the fair private character they possessed when the Senate gave them their sanction at its last session, and as it moreover appears from the journal of the Senate recently transmitted for my inspection, that it was deemed unnecessary to inquire into their qualifications or character, it is to be inferred that the change in the opinion of the Senate has arisen from the official conduct of these gentlemen. The only circumstances in their official conduct which have been deemed of sufficient importance to attract public attention are the two reports made by them to the executive department of the government, the one bearing date the 22d day of April, and the other the 19th day of August last; both of which reports were communicated to the Senate by the Secretary of the Treasury with his reasons for removing the deposits.

"The truth of the facts stated in these reports, is not, I presume, questioned by any one. The high character and standing of the citizens by whom they were made prevent any doubt upon the subject. Indeed the statements have not been denied by the president of the bank, and the other directors. On the contrary, they have insisted that they were authorized to use the money of the bank in the manner stated in the two reports, and have not denied that the charges there made against the corporation are substantially true.

"It must be taken, therefore, as admitted that the statements of the public directors, in the reports above mentioned, are correct: and they disclose the most alarming abuses on the part of the corporation, and the most strenuous exertions on their part to put an end to them. They prove that enormous sums were secretly lavished in a manner, and for purposes that cannot be justified; and that the whole of the immense capital of the bank has been virtually placed at the disposal of a single individual, to be used, if he thinks proper, to corrupt the press, and to control the proceedings of the government by exercising an undue influence over elections.

"The reports were made in obedience to my official directions; and I herewith transmit copies of my letter calling for information of the proceedings of the bank. Were they bound to disregard the call? Was it their duty to remain silent while abuses of the most injurious and dangerous character were daily practised? Were they bound to conceal from the constituted authorities a course of measures destructive to the best interests of the country, and intended, gradually and secretly, to subvert the foundations of our government, and to transfer its powers from the hands of the people to a great moneyed corporation? Was it their duty to sit in silence at the board, and witness all these abuses without an attempt to correct them; or, in case of failure there, not to appeal to higher authority? The eighth fundamental rule authorizes any one of the directors, whether elected or appointed, who may have been absent when an excess of debt was created, or who may have dissented from the act, to exonerate himself from personal responsibility by giving notice of the fact to the President of the United States; thus recognizing the propriety of communicating to that officer the proceedings of the board in such cases. But, independently of any argument to be derived from the principle recognized in the rule referred to, I cannot doubt for a moment that it is the right and the duty of every director at the board to attempt to correct all illegal proceedings, and in case of failure, to disclose them; and that every one of them, whether elected by the stockholders or appointed by the government, who had knowledge of the facts, and concealed them, would be justly amenable to the severest censure.

"But, in the case of the public directors, it was their peculiar and official duty to make the disclosures; and the call upon them for information could not have been disregarded without a flagrant breach of their trust. The directors appointed by the United States cannot be regarded in the light of the ordinary directors of a bank appointed by the stockholders, and charged with the care of their pecuniary interests in the corporation. They have higher and more important duties. They are public officers. They are placed at the board not merely to represent the stock held by the United States, but to observe the conduct of the corporation, and to watch over the public interests. It was foreseen that this great moneyed monopoly might be so managed as to endanger the interests of the country; and it was therefore deemed necessary, as a measure of precaution, to place at the board watchful sentinels, who should observe its conduct, and stand ready to report to the proper officers of the government every act of the board which might affect injuriously the interests of the people.

"It was, perhaps, scarcely necessary to present to the Senate these views of the powers of the Executive, and of the duties of the five directors appointed by the United States. But the bank is believed to be now striving to obtain for itself the government of the country, and is seeking, by new and strained constructions, to wrest from the hands of the constituted authorities the salutary control reserved by the charter. And as misrepresentation is one of its most usual weapons of attack, I have deemed it my duty to put before the Senate, in a manner not to be misunderstood, the principles on which I have acted.

"Entertaining, as I do, a solemn conviction of the truth of these principles, I must adhere to them, and act upon them, with constancy and firmness.

"Aware, as I now am, of the dangerous machinations of the bank, it is more than ever my duty to be vigilant in guarding the rights of the people from the impending danger. And I should feel that I ought to forfeit the confidence with which my countrymen have honored me, if I did not require regular and full reports of every thing in the proceedings of the bank calculated to affect injuriously the public interests, from the public directors, and if the directors should fail to give the information called for, it would be my imperious duty to exercise the power conferred on me by the law of removing them from office, and of appointing others who would discharge their duties with more fidelity to the public. I can never suffer any one to hold office under me, who would connive at corruption, or who should fail to give the alarm when he saw the enemies of liberty endeavoring to sap the foundations of our free institutions, and to subject the free people of the United States to the dominion of a great moneyed corporation.

"Any directors of the bank, therefore, who might be appointed by the government, would be required to report to the Executive as fully as the late directors have done, and more frequently, because the danger is more imminent; and it would be my duty to require of them a full detail of every part of the proceedings of the corporation, or any of its officers, in order that I might be enabled to decide whether I should exercise the power of ordering a scire facias, which is reserved to the President by the charter, or adopt such other lawful measures as the interests of the country might require. It is too obvious to be doubted, that the misconduct of the corporation would never have been brought to light by the aid of a public proceeding at the board of directors.

"The board, when called on by the government directors, refused to institute an inquiry or require an account, and the mode adopted by the latter was the only one by which the object could be attained. It would be absurd to admit the right of the government directors to give information, and at the same time deny the means of obtaining it. It would be but another mode of enabling the bank to conceal its proceedings, and practice with impunity its corruptions. In the mode of obtaining the information, therefore, and in their efforts to put an end to the abuses disclosed, as well as in reporting them, the conduct of the late directors was judicious and praiseworthy, and the honesty, firmness, and intelligence, which they have displayed, entitle them, in my opinion, to the gratitude of the country.

"If the views of the Senate be such as I have supposed, the difficulty of sending to the Senate any other names than those of the late directors will be at once apparent. I cannot consent to place before the Senate the name of any one who is not prepared, with firmness and honesty, to discharge the duties of a public director in the manner they were fulfilled by those whom the Senate have refused to confirm. If, for performing a duty lawfully required of them by the Executive, they are to be punished by the subsequent rejection of the Senate, it would not only be useless but cruel to place men of character and honor in that situation, if even such men could be found to accept it. If they failed to give the required information, or to take proper measures to obtain it, they would be removed by the Executive. If they gave the information, and took proper measures to obtain it, they would, upon the next nomination, be rejected by the Senate. It would be unjust in me to place any other citizens in the predicament in which this unlooked for decision of the Senate has placed the estimable and honorable men who were directors during the last year.

"If I am not in error in relation to the principles upon which these gentlemen have been rejected, the necessary consequence will be that the bank will hereafter be without government directors and the people of the United States must be deprived of their chief means of protection against its abuses; for, whatever conflicting opinions may exist as to the right of the directors appointed in January, 1833, to hold over until new appointments shall be made, it is very obvious that, whilst their rejection by the Senate remains in force, they cannot, with propriety, attempt to exercise such a power. In the present state of things, therefore, the corporation will be enabled effectually to accomplish the object it has been so long endeavoring to attain. Its exchange committees, and its delegated powers to its president, may hereafter be dispensed with, without incurring the danger of exposing its proceedings to the public view. The sentinels which the law had placed at its board can no longer appear there.

"Justice to myself, and to the faithful officers by whom the public has been so well and so honorably served, without compensation or reward, during the last year, has required of me this full and frank exposition of my motives for nominating them again after their rejection by the Senate. I repeat, that I do not question the right of the Senate to confirm or reject at their pleasure; and if there had been any reason to suppose that the rejection, in this case, had not been produced by the causes to which I have attributed it, or of my views of their duties, and the present importance of their rigid performance, were other than they are, I should have cheerfully acquiesced, and attempted to find others who would accept the unenviable trust. But I cannot consent to appoint directors of the bank to be the subservient instruments, or silent spectators, of its abuses and corruptions; nor can I ask honorable men to undertake the thankless duty, with the certain prospect of being rebuked by the Senate for its faithful performance, in pursuance of the lawful directions of the Executive."

This message brought up the question, virtually, Which was the nominating power, in the case of the government directors of the bank? was it the President and Senate? or the bank and the Senate? for it was evident that the four now nominated were rejected to gratify the bank, and for reasons that would apply to every director that would discharge his duties in the way these four had done – namely, as government directors, representing its stock, guarding its interest, and acting for the government in all cases which concerned the welfare of an institution whose notes were a national currency, whose coffers were the depository of the public moneys, and in which it had a direct interest of seven millions of dollars in its stock. It brought up this question: and if negatived, virtually decided that the nominating power should be in the bank; and that the government directors should no more give such information to the President as these four had given. And this question it was determined to try, and that definitively, in the persons of these four nominated directors, with the declared determination to nominate no others if they were rejected; and so leave the government without representation in the bank. This message of re-nomination was referred to the Senate's Committee of Finance, of which Mr. Tyler was chairman, and who made a report adverse to the re-nominations, and in favor of again rejecting the nominees. The points made in the report were, first, the absolute right of the Senate to reject nominations; secondly, their privilege to give no reasons for their rejections (which the President had not asked); and, thirdly, against the general impolicy of making re-nominations, while admitting both the right and the practice in extraordinary occasions. Some extracts will show its character: thus:

"The President disclaims, indeed, in terms, all right to inquire into the reasons of the Senate for rejecting any nomination; and yet the message immediately undertakes to infer, from facts and circumstances, what those reasons, which influenced the Senate in this case, must have been; and goes on to argue, much at large, against the validity of such supposed reasons. The committee are of opinion that, if, as the President admits, he cannot inquire into the reasons of the Senate for refusing its assent to nominations, it is still more clear that these reasons cannot, with propriety, be assumed, and made subjects of comment.

"In cases in which nominations are rejected for reasons affecting the character of the persons nominated, the committee think that no inference is to be drawn except what the vote shows; that is to say, that the Senate withholds its advice and consent from the nominations. And the Senate, not being bound to give reasons for its votes in these cases, it is not bound, nor would it be proper for it, as the committee think, to give any answer to remarks founded on the presumption of what such reasons must have been in the present case. They feel themselves, therefore, compelled to forego any response whatever to the message of the President, in this particular, as well by the reasons before assigned, as out of respect to that high officer.

"The President acts upon his own views of public policy, in making nominations to the Senate; and the Senate does no more, when it confirms or rejects such nominations.

"For either of these co-ordinate departments to enter into the consideration of the motives of the other, would not, and could not, fail, in the end, to break up all harmonious intercourse between them. This your committee would deplore as highly injurious to the best interests of the country. The President, doubtless, asks himself, in the case of every nomination for office, whether the person be fit for the office; whether he be actuated by correct views and motives; and whether he be likely to be influenced by those considerations which should alone govern him in the discharge of his duties – is he honest, capable, and faithful? Being satisfied in these particulars, the President submits his name to the Senate, where the same inquiries arise, and its decision should be presumed to be dictated by the same high considerations as those which govern the President in originating the nomination.

"For these reasons, the committee have altogether refrained from entering into any discussion of the legal duties and obligations of directors of the bank, appointed by the President and Senate, which forms the main topic of the message.

"The committee would not feel that it had fully acquitted itself of its obligations, if it did not avail itself of this occasion to call the attention of the Senate to the general subject of renomination.

"The committee do not deny that a right of renomination exists; but they are of opinion that, in very clear and strong cases only should the Senate reverse decisions which it has deliberately formed, and officially communicated to the President.

"The committee perceive, with regret, an intimation in the message that the President may not see fit to send to the Senate the names of any other persons to be directors of the bank, except those whose nominations have been already rejected. While the Senate will exercise its own rights according to its own views of its duty, it will leave to other officers of the government to decide for themselves on the manner they will perform their duties. The committee know no reasons why these offices should not be filled; or why, in this case, no further nomination should be made, after the Senate has exercised its unquestionable right of rejecting particular persons who have been nominated, any more than in other cases. The Senate will be ready at all times to receive and consider any such nominations as the President may present to it.

"The committee recommend that the Senate do not advise and consent to the appointment of the persons thus renominated."

While these proceedings were going on in the Senate, the four rejected gentlemen were paying some attention to their own case; and, in a "memorial" addressed to the Senate and to the House of Representatives, answered the charges against them in the Directors' Report, and vindicated their own conduct in giving the information which the President requested – reasserted the truth of that information; and gave further details upon the manner in which they had been systematically excluded from a participation in conducting the main business of the bank, and even from a knowledge of what was done. They said:

"Selected by the President and Senate as government directors of the Bank of the United States, we have endeavored, during the present year, faithfully to discharge the duties of that responsible trust. Appointed without solicitation, deriving from the office no emolument, we have been guided in our conduct by no views but a determination to uphold, so far as was in our power, those principles which we believe actuated the people of the United States in establishing a national bank, and in providing by its charter that they should be represented at the board of directors. We have regarded that institution, not merely as a source of profit to individuals, but as an organ of the government, established by the nation for its own benefit. We have regarded ourselves, not as mere agents of those whose funds have been subscribed towards the capital of the bank, but as officers appointed on behalf of the American people. We have endeavored to govern all our conduct as faithful representatives of them. We have been deterred from this by no preconcerted system to deprive us of our rights, by no impeachment of our motives, by no false views of policy, by no course of management which might be supposed to promote the interests of those concerned in the institution, at the danger or sacrifice of the general good. We have left the other directors to govern themselves as they may think best for the interests of those by whom they were chosen. For ourselves, we have been determined, that where any differences have arisen, involving on the one hand that open and correct course which is beneficial to the whole community, and, on the other, what are supposed to be the interests of the bank, our efforts should be steadily directed to uphold the former, our remonstrances against the latter should be resolute and constant; and, when they proved unavailing, our appeal should be made to those who were more immediately intrusted with the protection of the public welfare.

"In pursuing this course we have been met by an organized system of opposition, on the part of the majority. Our efforts have been thwarted, our motives and actions have been misrepresented, our rights have been denied, and the limits of our duties have been gratuitously pointed out to us, by those who have sought to curtail them to meet their own policy, not that which we believe led to the creation of the offices we hold. Asserting that injury has been done to them by the late measure of the Secretary of the Treasury, in removing the public deposits, an elaborate statement has been prepared and widely circulated; and taking that as their basis, it has been resolved by the majority to present a memorial to the Senate and House of Representatives. We have not, and do not interfere in the controversy which exists between the majority of the board and the executive department of the government; but unjustly assailed as we have been in the statement to which we have referred, we respectfully claim the same right of submitting our conduct to the same tribunal, and asking of the assembled representatives of the American people that impartial hearing, and that fair protection, which all their officers and all citizens have a right to demand. We shall endeavor to present the view we have taken of the relation in which we are placed, as well towards the institution in question as towards the government and people of the United States, to prove that from the moment we took our seats among the directors of the bank, we have been the objects of a systematic opposition; our rights trampled upon, our just interference prevented, and our offices rendered utterly useless, for all the purposes required by the charter; and to show that the statements by the majority of the board, in the document to which we refer, convey an account of their proceedings and conduct altogether illusory and incorrect."

The four gentlemen then state their opinions of their rights, and their duties, as government directors – that they were devised as instruments for the attainment of public objects – that they were public directors, not elected by stockholders, but appointed by the President and Senate – that their duties were not merely to represent a moneyed interest and promote the largest dividend for stockholders, but also to guard all the public and political interest of the government in an institution so largely sharing its support and so deeply interested in its safe and honorable management. And in support of this opinion of their duties they quoted the authority of Gen. Hamilton, founder of the first bank of the United States; and that of Mr. Alexander Dallas, founder of the second and present bank; showing that each of them, and at the time of establishing the two banks respectively, considered the government directors as public officers, bound to watch over the operations of the bank, to oppose all malpractices, and to report them to the government whenever they occurred. And they thus quoted the opinions of those two gentlemen:

"In the celebrated report of Alexander Hamilton, in 1790, that eminent statesman and financier, although then impressed with a persuasion that the government of the country might well leave the management of a national bank to 'the keen, steady, and, as it were, magnetic sense of their own interest,' existing among the private stockholders, yet holds the following remarkable and pregnant language: 'If the paper of a bank is permitted to insinuate itself into all the revenues and receipts of a country; if it is even to be tolerated as the substitute for gold and silver, in all the transactions of business; it becomes, in either view, a national concern of the first magnitude. As such, the ordinary rules of prudence require that the government should possess the means of ascertaining, whenever it thinks fit, that so delicate a trust is executed with fidelity and care. A right of this nature is not only desirable, as it respects the government, but it ought to be equally so to all those concerned in the institution, as an additional title to public and private confidence, and as a thing which can only be formidable to practices that imply mismanagement.'

"In the letter addressed by Alexander James Dallas, the author of the existing bank, to the chairman of the committee on a national currency, in 1815, the sentiments of that truly distinguished and patriotic statesman are explicitly conveyed upon this very point. 'Nor can it be doubted,' he remarks, 'that the department of the government which is invested with the power of appointment to all the important offices of the State, is a proper department to exercise the power of appointment in relation to a national trust of incalculable magnitude. The national bank ought not to be regarded simply as a commercial bank. It will not operate on the funds of the stockholders alone, but much more on the funds of the nation. Its conduct, good or bad, will not affect the corporate credit and resources alone, but much more the credit and resources of the government. In fine, it is not an institution created for the purposes of commerce and profit alone, but much more for the purposes of national policy, as an auxiliary in the exercise of some of the highest powers of the government. Under such circumstances, the public interests cannot be too cautiously guarded, and the guards proposed can never be injurious to the commercial interests of the institution. The right to inspect the general accounts of the bank, may be employed to detect the evils of a mal-administration, but an interior agency in the direction of its affairs will best serve to prevent them.' This last sentence, extracted from the able document of Secretary Dallas, developes at a glance what had been the experience of the American government and people, in the period which elapsed between the time of Alexander Hamilton and that immediately preceding the formation of the present bank. Hamilton conceived that 'a right to inspect the general accounts of the bank,' would enable government 'to detect the evils of a mal-administration,' and their detection he thought sufficient. He was mistaken: at least so thought Congress and their constituents, in 1815. Hence the inflexible spirit which prevailed at the organization of a new bank, in establishing 'an interior agency in the direction of its affairs,' by the appointment of public officers, through whom the evils of a mal-administration might be carefully watched and prevented."

The four gentlemen also showed, in their memorial, that when the bill for the charter of the present bank was under consideration in the Senate, a motion was made to strike out the clause authorizing the appointment of the government directors; and that that motion was resisted, and successfully, upon the ground that they were to be the guardians of the public interests, and to secure a just and honorable administration of the affairs of the bank; that they were not mere bank directors, but government officers, bound to watch over the rights and interests of the government, and to secure a safe and honest management of an institution which bore the name of the United States – was created by it – and in which the United States had so much at stake in its stock, in its deposits, in its circulation, and in the safety of the community which put their faith in it. Having vindicated the official quality of their characters, and shown their duty as well as their right to inform the government of all mal-practices, they entered upon an examination of the information actually given, showing the truth of all that was communicated, and declaring it to be susceptible of proof, by the inspection of the books of the institution, and by an examination of its directors and clerks.