TRANSMIGRATION OF THE BANK OF THE UNITED STATES FROM A FEDERAL TO A
STATE INSTITUTION.
This institution having again appeared on the public theatre,
politically and financially, and with power to influence national
legislation, and to control moneyed corporations, and with
art and skill enough to deceive astute merchants and trained
politicians,--(for it is not to be supposed that such men would
have committed themselves in her favor if they had known her
condition,)--it becomes necessary to trace her history since the
expiration of her charter, and learn by what means she continued an
existence, apparently without change, after having undergone the
process which, in law and in reason, is the death of a corporation.
It is a marvellous history, opening a new chapter in the necrology
of corporations, very curious to study, and involving in its
solution, besides the biological mystery, the exposure of a legal
fraud and juggle, a legislative smuggle, and a corrupt enactment.
The charter of the corporation had expired upon its own limitation
in the year 1836: it was entitled to two years to wind up its
affairs, engaging in no new business: but was seen to go on after
the expiration, as if still in full life, and without the change of
an attribute or feature. The explanation is this:
On the 19th day of January, in the year 1836, a bill was reported
in the House of Representatives of the General Assembly of
Pennsylvania, entitled, "_An act to repeal the State tax, and to
continue the improvement of the State by railroads and canals;
and for other purposes_." It came from the standing committee on
"_Inland navigation and internal improvement_;" and was, in fact,
a bill to repeal a tax and make roads and canals, but which,
under the vague and usually unimportant generality of "_other
purposes_," contained the entire draught of a charter for the
Bank of the United States--adopting it as a Pennsylvania State
bank. The introduction of the bill, with this addendum, colossal
tail to it, was a surprise upon the House. No petition had asked
for such a bank: no motion had been made in relation to it: no
inquiry had been sent to any committee: no notice of any kind
had heralded its approach: no resolve authorized its report: the
unimportant clause of "_other purposes_," hung on at the end of
the title, could excite no suspicion of the enormous measures
which lurked under its unpretentious phraseology. Its advent was
an apparition: its entrance an intrusion. Some members looked at
each other in amazement. But it was soon evident that it was the
minority only that was mystified--that a majority of the elected
members in the House, and a cluster of exotics in the lobbies,
perfectly understood the intrusive movement:--in brief, it had been
smuggled into the House, and a power was present to protect it
there. This was the first intimation that had reached the General
Assembly, the people of Pennsylvania, or the people of the United
States, that the Bank of the United States was transmigrating!
changing itself from a national to a local institution--from a
federal to a State charter--from an imperial to a provincial
institution--retaining all the while its body and essence, its
nature and attributes, its name and local habitation. It was a new
species of metempsychosis, heretofore confined to souls separated
from bodies, but now appearing in a body that never had a soul: for
that, according to Sir Edward Coke, is the psychological condition
of a corporation--and, above all, of a moneyed corporation.
The mystified members demanded explanations; and it was a case in
which explanations could not be denied. Mr. Biddle, in a public
letter to an eminent citizen, on whose name he had been accustomed
to hang such productions, (Mr. John Quincy Adams,) attributed the
procedure, so far as he had moved in it, to a "_formal application
on the part of the legislature to know from him on what terms
the expiring bank would receive a charter from it_;" and gave up
the names of two members who had conveyed the application. The
legislature had no knowledge of the proceeding. The two members
whose names had been vouched disavowed the legislative application,
but admitted that, in compliance with suggestions, they had written
a letter to Mr. Biddle in their own names, making the inquiry; but
without the sanction of the legislature, or the knowledge of the
committees of which they were members. They did not explain the
reason which induced them to take the initiative in so important
business; and the belief took root that their good nature had
yielded to an importunity from an invisible source, and that they
had consented to give a private and bungling commencement to what
must have a beginning, and which could not find it in any open or
parliamentary form. It was truly a case in which the first step
cost the difficulty. How to begin was the puzzle, and so to begin
as to conceal the beginning, was the desideratum. The finger of
the bank must not be seen in it, yet, without the touch of that
finger, the movement could not begin. Without something from the
Bank--without some request or application from it, it would have
been gratuitous and impertinent, and might have been insulting and
offensive, to have offered it a State charter. To apply openly for
a charter was to incur a publicity which would be the defeat of
the whole movement. The answer of Mr. Biddle to the two members,
dexterously treating their private letter, obtained by solicitation,
as a formal legislative application, surmounted the difficulty! and
got the Bank before the legislature, where there were friends enough
secretly prepared for the purpose to pass it through. The terms
had been arranged with Mr. Biddle beforehand, so that there was
nothing to be done but to vote. The principal item in these terms
was the stipulation to pay the State the sum of $1,300,000, to be
expended in works of internal improvements; and it was upon this
slender connection with the subject that the whole charter referred
itself to the committee of "_Inland navigation and internal
improvement_;"--to take its place as a proviso to a bill entitled,
"_To repeal the State tax, and to continue the improvements of the
State by railroads and canals_;"--and to be no further indicated in
the title to that act than what could be found under the addendum
of that vague and flexible generality, "_other purposes_;" usually
added to point attention to something not worth a specification.
Having mastered the first step--the one of greatest difficulty, if
there is truth in the proverb--the remainder of the proceeding was
easy and rapid, the bill, with its proviso, being reported, read a
first, second, and third time, passed the House--sent to the Senate;
read a first, second, and third time there, and passed--sent to
the Governor and approved, and made a law of the land: and all in
as little time as it usually requires to make an act for changing
the name of a man or a county. To add to its titles to infamy, the
repeal of the State tax which it assumed to make, took the air of
a bamboozle, the tax being a temporary imposition, and to expire
within a few days upon its own limitation. The distribution of the
bonus took the aspect of a bribe to the people, being piddled out
in driblets to the inhabitants of the counties: and, to stain the
bill with the last suspicion, a strong lobby force from Philadelphia
hung over its progress, and cheered it along with the affection
and solicitude of parents for their offspring. Every circumstance
of its enactment announced corruption--bribery in the members who
passed the act, and an attempt to bribe the people by distributing
the bonus among them: and the outburst of indignation throughout
the State was vehement and universal. People met in masses to
condemn the act, demand its repeal, to denounce the members who
voted for it, and to call for investigation into the manner in
which it passed. Of course, the legislature which passed it was in
no haste to respond to these demands; but their successors were
different. An election intervened; great changes of members took
place; two-thirds of the new legislature demanded investigation,
and resolved to have it. A committee was appointed, with the usual
ample powers, and sat the usual length of time, and worked with the
usual indefatigability, and made the usual voluminous report; and
with the usual "lame and impotent conclusion." A mass of pregnant
circumstances were collected, covering the whole case with black
suspicion: but direct bribery was proved upon no one. Probably, the
case of the Yazoo fraud is to be the last, as it was the first, in
which a succeeding general assembly has fully and unqualifiedly
condemned its predecessor for corruption.
The charter thus obtained was accepted: and, without the change
of form or substance in any particular, the old bank moved on as
if nothing had happened--as if the Congress charter was still in
force--as if a corporate institution and all its affairs could
be shifted by statute from one foundation to another;--as if
a transmigration of corporate existence could be operated by
legislative enactment, and the debtors, creditors, depositors, and
stockholders in one bank changed, transformed, and constituted
into debtors, creditors, depositors and stockholders in another.
The illegality of the whole proceeding was as flagrant as it was
corrupt--as scandalous as it was notorious--and could only find
its motive in the consciousness of a condition in which detection
adds infamy to ruin; and in which no infamy, to be incurred, can
exceed that from which escape is sought. And yet it was this broken
and rotten institution--this criminal committing crimes to escape
from the detection of crimes--this "counterfeit presentment" of a
defunct corporation--this addendum to a Pennsylvania railroad--this
whited sepulchre filled with dead men's bones, thus bribed and
smuggled through a local legislature--that was still able to
set up for a power and a benefactor! still able to influence
federal legislation--control other banks--deceive merchants
and statesmen--excite a popular current in its favor--assume a
guardianship over the public affairs, and actually dominate for
months longer in the legislation and the business of the country.
It is for the part she acted--the dominating part--in contriving
the financial distress and the general suspension of the banks in
1837--the last one which has afflicted our country,--that renders
necessary and proper this notice of her corrupt transit through the
General Assembly of the State of Pennsylvania.