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.