LAST NOTICE OF THE BANK OF THE UNITED STATES.
For ten long years the name of this bank had resounded in the two
Halls of Congress. For twenty successive sessions it had engrossed
the national legislature--lauded, defended, supported--treated as
a power in the State: and vaunted as the sovereign remedy for all
the diseases to which the finances, the currency, and the industry
of the country could be heir. Now, for the first time in that long
period, a session passed by--one specially called to make a bank--in
which the name of that institution was not once mentioned: never
named by its friends! seldom by its foes. Whence this silence?
Whence this avoidance of a name so long, so lately, and so loudly
invoked? Alas! the great bank had run its career of audacity, crime,
oppression, and corruption. It was in the hands of justice, for
its crimes and its debts--was taken out of the hands of its late
insolvent directory--placed in the custody of assignees--and passed
into a state of insolvent liquidation. Goaded by public reproaches,
and left alone in a state of suspension by other banks, she essayed
the perilous effort of a resumption. Her credit was gone. It was
only for payment that any one approached her doors. In twenty days
she was eviscerated of six millions of solid dollars, accumulated by
extraordinary means, to enable her to bid for a re-charter at the
extra session. This was the last hope, and which had been resolved
upon from the moment of General Harrison's election. She was empty.
The seventy-six millions of assets, sworn to the month before, were
either undiscoverable, or unavailable. The shortest month in the
year had been too long for her brief resources. Early in the month
of February, her directory issued a new decree of suspension--the
third one in four years; but it was in vain to undertake to pass
off this stoppage for a suspension. It was felt by all to be an
insolvency, though bolstered by the usual protestations of entire
ability, and firm determination to resume briefly. An avalanche of
suits fell upon the helpless institution, with judgments carrying
twelve per cent. damages, and executions to be levied on whatever
could be found. Alarmed at last, the stockholders assembled in
general meeting, and verified the condition of their property. It
was a wreck! nothing but fragments to be found, and officers of the
bank feeding on these crumbs though already gorged with the spoils
of the monster.
A report of the affairs of the institution was made by a committee
of the stockholders: it was such an exhibition of waste and
destruction, and of downright plundering, and criminal misconduct,
as was never seen before in the annals of banking. Fifty-six
millions and three quarters of capital out of sixty-two millions
and one quarter (including its own of thirty-five) were sunk in
the limits of Philadelphia alone: for the great monster, in going
down, had carried many others along with her; and, like the strong
man in Scripture, slew more in her death than in her life. Vast was
her field of destruction--extending all over the United States--and
reaching to Europe, where four millions sterling of her stock was
held, and large loans had been contracted. Universally on classes
the ruin fell--foreigners as well as citizens--peers and peeresses,
as well as the ploughman and the wash-woman--merchants, tradesmen,
lawyers, divines: widows and orphans, wards and guardians: confiding
friends who came to the rescue: deceived stockholders who held on to
their stock, or purchased more: the credulous masses who believed
in the safety of their deposits, and in the security of the notes
they held--all--all saw themselves the victims of indiscriminate
ruin. An hundred millions of dollars was the lowest at which the
destruction was estimated; and how such ruin could be worked, and
such blind confidence kept up for so long a time, is the instructive
lesson for history: and that lesson the report of the stockholders'
committee enables history to give.
From this authentic report it appears that from the year 1830 to
1836--the period of its struggles for a re-charter--the loans and
discounts of the bank were about doubled--its expenses trebled.
Near thirty millions of these loans were not of a mercantile
character--neither made to persons in trade or business, nor
governed by the rules of safe endorsement and punctual payment
which the by-laws of the institution, and the very safety of the
bank, required; nor even made by the board of directors, as the
charter required; but illegally and clandestinely, by the exchange
committee--a small derivation of three from the body of the
committee, of which the President of the bank was _ex officio_ a
member, and the others as good as nominated by him. It follows then
that these, near thirty millions of loans, were virtually made by
Mr. Biddle himself; and in violation of the charter, the by-laws
and the principles of banking. To whom were they made? To members
of Congress, to editors of newspapers, to brawling politicians, to
brokers and jobbers, to favorites and connections: and all with a
view to purchase a re-charter, or to enrich connections, and exalt
himself--having the puerile vanity to delight in being called the
"Emperor Nicholas." Of course these loans were, in many instances,
not expected to be returned--in few so secured as to compel return:
and, consequently, near all a dead loss to the stockholders, whose
money was thus disposed of.
The manner in which these loans were made to members of Congress,
was told to me by one of these members who had gone through this
process of bank accommodation; and who, voting against the bank,
after getting the loan, felt himself free from shame in telling
what had been done. He needed $4,000, and could not get it at home:
he went to Philadelphia--to the bank--inquired for Mr. Biddle--was
shown into an ante-room, supplied with newspapers and periodicals;
and asked to sit, and amuse himself--the president being engaged
for the moment. Presently a side door opened. He was ushered
into the presence--graciously received--stated his business--was
smilingly answered that he could have it, and more if he wished it:
that he could leave his note with the exchange committee, and check
at once for the proceeds: and if inconvenient to give an indorser
before he went home, he could do it afterwards: and, whoever he said
was good, would be accepted. And in telling me this, the member said
he could read "bribery" in his eyes.
The loans to brokers to extort usury upon--to jobbers, to put up
and down the price of stocks--to favorites, connections, and bank
officers, were enormous in amount, indefinite in time, on loose
security, or none: and when paid, if at all, chiefly in stocks at
above their value. The report of the committee thus states this
abuse:
"These loans were generally in large amounts. In the list of
debtors on 'bills receivable' of the first of January 1837,
twenty-one individuals, firms and companies, stand charged,
each with an amount of one hundred thousand dollars and
upwards. One firm of this city received accommodations of this
kind between August 1835, and November 1837, to the extent
of 4,213,878 dollars 30 cents--more than half of which was
obtained in 1837. The officers of the bank themselves received
in this way, loans to a large amount. In March 1836, when the
bank went into operation, under its new charter, Mr. Samuel
Jaudon, then elected its principal cashier, was indebted to it,
100,500 dollars. When he resigned the situation of cashier, and
was appointed foreign agent, he was in debt 408,389 dollars 25
cents; and on the first of March 1841, he still stood charged
with an indebtedness of 117,500 dollars. Mr. John Andrews,
first assistant cashier, was indebted to the bank in March
1836, 104,000 dollars. By subsequent loans and advances made
during the next three years, he received in all, the sum of
426,930 dollars 67 cents. Mr. Joseph Cowperthwaite, then second
assistant cashier, was in debt to the bank in March 1836,
115,000 dollars; when he was appointed cashier in September,
1837, 326,382 dollars 50 cents: when he resigned, and was
elected a director by the board, in June 1840, 72,860 dollars,
and he stands charged March 3, 1841, on the books with the sum
of 55,081 dollars 95 cents. It appears on the books of the bank,
that these three gentlemen were engaged in making investments
on their joint accounts, in the stock and loan of the Camden
and Woodbury railroad company Philadelphia, Wilmington, and
Baltimore railroad company, Dauphin and Lycoming coal lands,
and Grand Gulf railroad and banking company."
These enormous loans were chiefly in the year 1837, at the time
when the bank stopped payment on account of the "specie circular,"
the "removal of the deposits," and other alleged misdoings of the
democratic administrations: and this is only a sample of the way
that the institution went on during that period of fictitious
distress, and real oppression--millions to brokers and favorites,
not a dollar to the man of business.
Two agencies were established in London--one for the bank, under Mr.
Jaudon, to borrow money; the other for a private firm, of which Mr.
Biddle was partner, and his young son the London head--its business
being to sell cotton, bought with the dead notes of the old bank.
Of the expenses and doings of these agencies, all bottomed upon the
money of the stockholders (so far as it was left), the committee
gave this account:
"When Mr. Jaudon was elected to the place of foreign agent, he
was the principal cashier, at a salary of 7,000 dollars per
annum. The bank paid the loss on the sale of his furniture,
5,074 dollars, and the passage of himself and family to London,
a further sum of 1,015 dollars. He was to devote himself
exclusively to the business of the bank, to negotiate an
uncovered credit in England, to provide for the then existing
debt in Europe, to receive its funds, to pay its bills and
dividends, to effect sales of stocks, and generally to protect
the interests of the bank and 'the country at large.' For
these services he was to receive the commission theretofore
charged and allowed to Baring Brothers & Company, equal to
about 28,000 dollars per annum. In addition to which, the
expenses of the agency were allowed him, including a salary of
1,000 pounds sterling to his brother, Mr. Charles B. Jaudon,
as his principal clerk. From the increase of money operations,
arising from facilities afforded by the agency, the amount
upon which commissions were charged was greatly augmented, so
that the sums paid him for his country services up to January,
1841, amounted at nine per cent. exchange to 178,044 dollars
47 cents, and the expenses of the agency to 35,166 dollars 99
cents. In addition to these sums, he was allowed by the exchange
committee, an extra commission of one per cent. upon a loan
effected in October, 1839, of 800,000 pounds, say $38,755 56;
and upon his claim for a similar commission, upon subsequent
loans in France and Holland, to the amount of $8,337,141 90, the
board of directors, under the sanction of a legal opinion, from
counsel of high standing, and the views of the former president,
by whom the agreement with Mr. Jaudon was made, that the case
of extraordinary loans was not anticipated, nor meant to be
included in the original arrangement, allowed the further charge
of $83,970 37. These several sums amount to $335,937, 39, as
before stated."
A pretty expensive agency, although the agent was to devote himself
exclusively to the business of the bank, protecting its interests,
and those of "the country at large"--an addition to his mission,
this protection of the country at large, which illustrates the
insolent pretensions of this imperious corporation. Protect the
country at large! while plundering its own stockholders of their
last dollar. And that furniture of this bank clerk! the loss on
the sale of which was $5,074! and which loss the stockholders made
up: while but few of them had that much in their houses. The whole
amount of loans effected by this agency was twenty-three millions
of dollars; of which a considerable part was raised upon fictitious
bills, drawn in Philadelphia without funds to meet them, and to
raise money to make runs upon the New York banks, compel them to
close again: and so cover her own insolvency in another general
suspension: for all these operations took place after the suspension
of 1837. The committee thus report upon these loans, and the
gambling in stock speculations at home:
"Such were some of the results of the resolution of March,
1835, though it cannot be questioned, that much may be fairly
attributed to the unhappy situation of the business and
exchanges of the country, concurring with the unfortunate
policy pursued by the administration of the bank. Thus the
institution has gone on to increase its indebtedness abroad,
until it has now more money borrowed in Europe, than it has on
loan on its list of active debt in America. To this has been
superadded, extensive dealing in stocks, and a continuation
of the policy of loaning upon stock securities, though it
was evidently proper upon the recharter, that such a policy
should be at once and entirely abandoned. Such indeed was its
avowed purpose, yet one year afterwards, in March, 1837, its
loans on stocks and other than personal security had increased
$7,821,541, while the bills discounted on personal security,
and domestic exchange had suffered a diminution of $9,516,463
78. It seems to have been sufficient, to obtain money on loan,
to pledge the stock of an 'incorporated company,' however
remote its operation or uncertain its prospects. Many large
loans originally made on a pledge of stocks, were paid for in
the same kind of property, and that too at par, when in many
instances they had become depreciated in value. It is very
evident to the committee, that several of the officers of the
bank were themselves engaged in large operations in stocks and
speculations, of a similar character, with funds obtained of the
bank, and at the same time loans were made to the companies in
which they were interested, and to others engaged in the same
kind of operations, in amounts greatly disproportionate to the
means of the parties, or to their proper and legitimate wants
and dealings. The effect of this system, was to monopolize the
active means of the institution, and disable it from aiding and
accommodating men engaged in business really productive and
useful to the community; and as might have been anticipated, a
large part of the sums thus loaned were ultimately lost, or the
bank compelled, on disadvantageous terms as to price, to take in
payment stocks, back lands and other fragments of the estates of
great speculators."
The cotton agency seemed to be an ambidextrous concern--both
individual and corporation--its American office in the Bank of the
United States--the purchases made upon ten millions of its defunct
notes--the profits going to the private firm--the losses to the
bank. The committee give this history:
"In the course of the investigation the attention of the
committee has been directed to certain accounts, which appear
on the books as 'advances on merchandise,' but which were,
in fact, payments for cotton, tobacco and other produce,
purchased by the direction of the then President, Mr. Nicholas
Biddle, and shipped to Europe on account of himself and others.
These accounts were kept by a clerk in the foreign exchange
department, this department being under the charge of Mr.
Cowperthwaite, until September 22, 1837, when he was elected
cashier, and of Mr. Thomas Dunlap, until March 20, 1840, when
he was chosen president. The original documents, necessary to
enable the committee to arrive at all the facts in relation to
these transactions, were not accessible, having been retained,
as was supposed, by the parties interested, as private papers. A
succinct view of the whole matter, sufficient to convey to the
stockholders a general idea of its character, may be drawn from
the report of a committee of the board of directors, appointed
on the 21st of July, 1840, for the purpose of adjusting and
settling these accounts, and who reported on the 21st of
December, 1840, which report with the accompanying accounts, is
spread at large upon the minutes. The first transactions were in
July, 1837, and appear as advances, to A. G. Jaudon, to purchase
cotton for shipment to Baring Brothers & Co. of Liverpool, the
proceeds to be remitted to their house in London, then acting
as the agents of the bank. The amount of these shipments was
2,182,998 dollars 28 cents. The proceeds were passed to the
credit of the bank, and the account appears to be balanced.
The results, as to the profit and loss, do not appear, and the
committee had no means of ascertaining them, nor the names of
the parties interested. In the autumn of 1837, when the second
of these transactions commenced, it will be recollected, that
Mr. Samuel Jaudon had been appointed the agent of the bank
to reside in London. About the same time, a co-partnership
was formed between Mr. May Humphreys, then a director of the
bank, and a son of Mr. Nicholas Biddle, under the firm of
Biddle & Humphreys. This house was established at Liverpool,
and thenceforward acted as agents for the sale of the produce
shipped to that place which comprised a large proportion of the
whole amount. In explanation of these proceedings, the committee
annex to their report a copy of a letter dated Philadelphia,
December 28, 1840, to the president and directors of the bank,
from Mr. Joseph Cabot, one of the firm of Bevan & Humphreys, and
who became a director at the election in January, 1838. This
letter was read to the board, December 29, 1840, but was not
inserted on the minutes.
"This arrangement continued during the years 1837, 1838 and
1839, the transactions of which amounted to 8,969,450 dollars
95 cents. The shipments were made principally to Biddle and
Humphreys, were paid for by drafts on Bevan and Humphreys--the
funds advanced by the bank, and the proceeds remitted to Mr.
Samuel Jaudon, agent of the bank in London. It appears that
there was paid to Messrs. Bevan and Humphreys by the bank in
Philadelphia during the months of March, April, and May, 1839,
the sum of eight hundred thousand dollars, and the account was
thus balanced. The committee have reason to believe, that this
sum constituted a part or perhaps the whole of the profits
derived from the second series of shipments. How, and among
whom, it was distributed, they have not been informed, but from
the terms of the final settlement, to be adverted to presently,
each one will be at liberty to make his own inferences. The
third and last account, amounting to 3,241,042 dollars 83 cents,
appears on the books, as 'bills on London, advances S. V. S.
W.' These letters stand for the name of S. V. S. Wilder, of New
York.--Messrs. Humphreys and Biddle, to whom these consignments
were made, continued their accounts in the name of Bevan and
Humphreys, but without the knowledge of that firm, as appears
by Mr. Cabot's letter of December 28, 1840. The result of these
last shipments, was a loss of 962,524 dollars 13 cents. Of this
amount the sum of 553,908 dollars 57 cents was for excess of
payments by Messrs. Humphreys and Biddle to the London agency,
beyond the proceeds of sale, with interest thereon. The
parties interested, claimed and were allowed a deduction for
loss on 526,000 dollars of southern funds, used in the purchase
of cotton, when at a discount, the sum of 310,071 dollars 30
cents; and also this sum, being banker's commission to Messrs.
Humphreys and Biddle on advances to Samuel Jaudon, agent, 21,061
dollars 86 cents, making 331,133 dollars 16 cents, and leaving
to be settled by the parties the sum of 631,390 dollars 97
cents."
Thus, the profit of eight hundred thousand dollars on the first
shipments of cotton went to this private firm, though not shown
on the books to whom; and the loss of nine hundred and sixty-two
thousand five hundred and twenty-four dollars and thirteen cents
on the last shipments went to the bank; but this being objected
to by some of the directors, it was settled by Mr. Biddle and
the rest--the bank taking from them stocks, chiefly of Texas, at
par--the sales of the same being slow at a tithe of their face. The
bank had also a way of guaranteeing the individual contracts of Mr.
Biddle for millions; of which the report gives this account:
"Upon the eighteenth day of August, 1838, the bank guaranteed a
contract made by Mr. Nicholas Biddle in his individual capacity,
for the purchase of two thousand five hundred bonds of the State
of Mississippi, of two thousand dollars each, amounting in the
whole to 5,000,000 dollars. The signature of Mr. Thomas Dunlap,
then second assistant cashier, was affixed to the guarantee, in
behalf of the bank, upon the verbal authority of the president.
Upon the 29th of January, 1839, the bank guaranteed to the
State of Michigan, the punctual fulfilment of the obligations
of the Morris canal and banking company, for the purchase of
bonds of that state, to the extent of 3,145,687 dollars 50
cents. for 2,700,000 taken at par, and including interest on the
instalments payable every three months up to January, 1843. On
the 29th of April, 1839, the bank guaranteed a contract entered
into by Mr. Thomas Dunlap in his individual capacity for the
purchase of one million of dollars of the 'Illinois and Michigan
canal stock.' In regard to these transactions, the committee can
find no authority on the minutes of the board, and have been
referred to none, by the president, upon whom they called for
information."
Unintelligible accounts of large amounts appeared in the profit and
loss side of the bank ledger; which, not explaining themselves,
the parties named as receiving the money, were called upon for
explanations--which they refused to give. Thus:
"In this last account there is a charge under date of June
30, 1840, of $400,000 to 'parent bank notes account,' which
has not been explained to the satisfaction of the committee.
It must be also mentioned, that among the expenditures of the
bank, there is entered, at various dates, commencing May 5,
1836, sums amounting in all to 618,640 dollars 15 cents, as
paid on the 'receipts of Mr. N. Biddle,' of 'Mr. N. Biddle and
J. Cowperthwaite,' and 'cashier's vouchers.' As the committee
were unable to obtain satisfactory information upon the subject
of these expenses from the books or officers of the bank,
application was made by letter to Mr. N. Biddle and Mr. J.
Cowperthwaite, from whom no reply has been received."
These enormous transactions generally without the knowledge of the
directory, usually upon the initials of a member of the exchange
committee; and frequently upon a deposit of stock in the cash
drawer. Besides direct loans to members of Congress, and immense
fees, there was a process of entertainment for them at immense
expense--nightly dinners at hotels--covers for fifty: and the most
costly wines and viands: and this all the time. Besides direct
applications of money in elections, the bank became a fountain of
supply in raising an election fund where needed, taking the loss on
itself. Thus, in 1833, in the presidential election in Kentucky,
some politicians went into the branch bank at Lexington, assessed
the party in each county for the amount wanted in that county--drew
drafts for the amount of the assessment on some ardent friends in
the county, received the cash for the drafts from the bank, and
applied it to the election--themselves not liable if the assessment
was not paid, but the same to go to the profit and loss account of
the bank. In such operations as all these, and these are not all, it
was easy for the bank to be swallowed up: and swallowed up it was
totally.
The losses to the stockholders were deplorable, and in many
instances attended with circumstances which aggravated the
loss. Many were widows and children, their _all_ invested where
it was believed to be safe; and an ascertained income relied
on as certain, with eventual return of the capital. Many were
unfortunately deceived into the purchase or retention of stock, by
the delusive bank reports. The makers of these reports themselves
held no quantity of the stock--only the few shares necessary to
qualify them for the direction. Foreign holders were numerous,
attracted by the, heretofore, high credit of American securities,
and by the implications of the name--Bank of the United States;
implying a national ownership, which guaranteed national care
in its management, and national liability on its winding up.
Holland, England, France suffered, but the English most of all the
foreigners. The London Banker's Circular thus described their loss:
"The proportion of its capital held by British subjects is
nearly four millions sterling; it may be described as an entire
loss. And the loss we venture, upon some consideration, to say
is greater than the aggregate of all the losses sustained by
the inhabitants of the British Islands, from failure of banks
in this country, since Mr. Patterson established the banks of
England and Scotland at the close of the seventeenth century.
The small population of Guernsey and Jersey hold £200,000 of the
stock of this U. States Bank. Call it an entire loss, and it is
equal to a levy of three or four pounds on every man, woman, and
child in the whole community of those islands--a sum greater
than was ever raised by taxation in a single year on any people
in the whole world. Are these important facts? if facts they
be. Then let statesmen meditate upon them, for by their errors
and reckless confidence in delusive theories they have been
produced."
The credit of the bank, and the price of stock was kept up by
delusive statements of profits, and fictitious exhibition of assets
and false declarations of surpluses. Thus, declaring a half-yearly
dividend of four per centum, January 1st, 1839, with a surplus of
more than four millions; on the first of July of the same year,
another half-yearly dividend of four per centum, with a surplus of
more than four millions; on the 15th of January, the same year,
announcing a surplus of three millions; and six weeks thereafter, on
the first of January, announcing a surplus of five millions; while
the assets of the bank were carried up to seventy-six millions.
In this way credit was kept up. The creating of suspensions--that
of 1837, and subsequent--cost immense sums, and involved the most
enormous villainy; and the last of these attempts--the run upon the
New York banks to stop them again before she herself stopped for
the last time--was gigantically criminal, and ruinous to itself.
Mr. Joseph Cowperthwaite (perfectly familiar with the operation)
describes it to the life, and with the indifference of a common
business transaction. Premising that a second suspension was coming
on, it was deemed best (as in the first one of 1837) to make it
begin in New York; and the operation for that purpose is thus
narrated:
"After the feverish excitement consequent on this too speedy
effort to return to cash payments had in a good degree subsided,
another crisis was anticipated, and it was feared that the
banks generally would be obliged again to suspend. This was,
unhappily, too soon to be realized, for the storm was then ready
to burst, but, instead of meeting its full force at once, it
was deemed best to make it fall first upon the banks of New
York. To effect this purpose, large means were necessary, and to
procure these, resort was had to the sale of foreign exchange.
The state of the accounts of the bank with its agents abroad did
not warrant any large drafts upon them, especially that of the
Messrs. Hottinguer in Paris. This difficulty, however, it was
thought might be avoided, by shipping the coin to be drawn from
the New York banks immediately to meet the bills. Accordingly,
large masses of exchange, particularly bills on Paris, which
were then in great demand, were sent to New York to be sold
without limit. Indeed, the bills were signed in blank, and so
sent to New York; and although a large book was thus forwarded,
it was soon exhausted, and application was made to the agent
of the Paris house in New York for a further supply, who drew
a considerable amount besides. The proceeds of these immense
sales of exchange created very heavy balances against the New
York banks, which, after all, signally failed in producing the
contemplated effect. The bills not being provided for, nor even
regularly advised, as had uniformly been the custom of the bank,
were dishonored; and although the agent in London did every
thing which skill and judgment could accomplish, the credit of
the bank was gone, and from that day to the present its effects
upon the institution have been more and more disastrous."
"Deemed best to make the storm fall first upon the banks of New
York;" and for that purpose to draw bills without limit, without
funds to meet them, in such rapid succession as to preclude the
possibility of giving notice--relying upon sending the gold which
they drew out of the New York banks to Paris, to meet the same bills
(all the while laying that exportation of gold to the wickedness of
the specie circular), and failing to get the money there as fast
as these "race-horse" bills went--they returned dishonored--came
rolling back by millions, protested in Paris, to be again protested
in Philadelphia. Then the bubble burst. The credit which sustained
the monster was gone. Ruin fell upon itself, and upon all who put
their trust in it; and certainly this last act, for the criminality
of its intent and the audacity of its means, was worthy to cap and
crown the career of such an institution.
It was the largest ruin, and the most criminal that has been
seen since the South Sea and Mississippi schemes; yet no one was
punished, or made to refund. Bills of indictment were found by the
grand jury of the county of Philadelphia against Nicholas Biddle,
Samuel Jaudon, and John Andrews, for a conspiracy to defraud the
stockholders in the bank; and they were arrested, and held to bail
for trial. But they surrendered themselves into custody, procured
writs of _habeas corpus_ for their release; and were discharged in
vacation by judges before whom they were brought. It has been found
difficult in the United States to punish great offenders--much
more so than in England or France. In the cases of the South Sea
and Mississippi frauds, the principal actors, though men of high
position, were criminally punished, and made to pay damages. While
these delinquencies were going on in the Bank of the United States,
an eminent banker of London--Mr. Fauntleroy--was hanged at Tyburn,
like a common felon--for his bank misdeeds: and while some plundered
stockholders are now (autumn of 1855) assembled in Philadelphia,
searching in vain for a shilling of their stock, three of the
greatest bankers in London are receiving sentence of transportation
for fourteen years for offences, neither in money nor morals, the
hundredth part of the ruin and crime perpetrated by our American
bank--bearing the name of the United States. The case presents
too strong a contrast, and teaches too great a lesson to criminal
justice to be omitted; and here it is:
"The firm had been in existence for nearly two centuries. The
two elder partners of the firm had been distinguished for
munificent charities, for an advocacy of great moral reforms,
and an active participation in the religious or philanthropic
measures of the day. They had always been liberal givers,
had presided at Exeter Hall meetings, built chapels, and
generally acted the part of liberal and useful members of
society; and one of them, Sir John Dean Paul, was a baronet
by descent, and allied to some of the highest nobility of
England. He was first cousin to the present Lord Ravensworth,
the honorable Augustus and Adolphus Liddell, the rector of St.
Paul's, Knightsbridge, the Countess of Hardwicke, Viscountess
Barrington, Lady Bloomfield; and, above all, the honorable
Mrs. Villiers, sister-in-law to the Earl of Clarendon. These
connections, however, in a country where rank and social
position have peculiar influence, did not save them from a
criminal trial and utter disgrace. One of their customers, in
obedience to what he believed to be a duty to society, having
personally inquired into the affairs of the firm, proceeded to
lay a criminal information against Messrs. Strahan, Paul, and
Bates, which led to their indictment and subsequent trial before
the criminal court. This gentleman was the Rev. Dr. Griffith,
Prebendary of Rochester, a wealthy ecclesiastic and a personal
friend of all the partners of the firm, with which he had
been a large depositor for many years. On the twenty-fifth of
October the trial came on before Mr. Baron Alderson, assisted
by Baron Martin and Justice Willes. The defendants appeared
in court, attended by Sir Frederick Thesiger, Mr. Ballantyne,
Sergeant Byles, and other almost equally eminent counsel. The
Attorney-general appeared for the prosecution, and the evidence
adduced at the trial, disclosed the following facts: Dr.
Griffith, the prosecutor in the proceedings, and who, at the
time of the failure of the defendants, had money and securities
on deposit with them to the amount of £22,000, about five years
ago empowered them to purchase for him on three different
occasions, Danish five per cent. bonds to the value of £5,000.
The defendants purchased the bonds, upon which they regularly
received the dividends, and credited Dr. Griffith with the same
on their books. This continued until March, 1854, when Sir John
D. Paul, to relieve the embarrassments under which the firm
were laboring, sold these securities, together with others
with which they were entrusted, and appropriated the proceeds,
amounting to over £12,000, to the use of the firm. This, as we
have stated, was no offence at common law, and the indictment
was preferred upon a statutory provision found in the 7th and
8th of George IV., cap. 29. The rigid severity of the penal
law in England on this subject will be better appreciated when
we add, that the bonds were replaced by others of equal value,
in the June following their misappropriation, just one year
previous to the failure of the firm; and that the indictment
only charged the defendants with misappropriating them in this
single instance, although it was shown that the second set of
bonds were again sold for the use of the firm in April, 1855;
Dr. Griffith having, in the interval, regularly received his
dividends; so that, although the firm might be perfectly solvent
at this moment, the fact that they had sold the bonds in March,
1851, even if they had replaced them in June, 1854, and had
credited Dr. Griffith with the dividends on them between those
dates, would still render them liable to an indictment. The
case, therefore, overlooking the final misappropriation of the
bonds, and the failure of the firm in 1855, was narrowed down to
the single issue--whether they had been sold in 1854 without the
consent of Dr. Griffith."
For misappropriating sixty thousand dollars of one of their
customers--using it without his consent--these three great London
bankers were sentenced to fourteen years' transportation: for
misappropriating thirty-five millions, and sinking twenty-one
millions more in other institutions, the wrong-doers go free in the
United States--giving some countenance among us to the sarcasm of
the Scythian philosopher, that laws are cobwebs which catch the weak
flies, and let the strong ones break through. The Judge (Mr. Baron
Alderson) who tried this case (that of the three London bankers),
had as much heart and feeling as any judge, or man ought to have;
but he also had a sense of his own duty, and of his obligations to
the laws, and to the country; and in sentencing men of such high
position, and with whom he had been intimate and social, he combined
in the highest degree the feelings of a man with the duties of the
judge. He said to the prisoners:
"William Strahan, Sir John Dean Paul, and Robert Makin Bates,
the jury have now found you guilty of the offence charged upon
you in the indictment--the offence of disposing of securities
which were entrusted by your customers to you as bankers, for
the purpose of being kept safe for their use, and which you
appropriated, under circumstances of temptation, to your own.
A greater and more serious offence can hardly be imagined in a
great commercial city like this. It tends to shake confidence
in all persons in the position you occupied, and it has shaken
the public confidence in establishments like that you for a
long period honorably conducted. I do very, very much regret
that it falls to my lot to pass any sentence on persons in
your situation; but yet the public interest and public justice
require it; and it is not for me to shrink from the discharge of
any duty, however painful, which properly belongs to my office.
I should have been very glad, if it had pleased God that some
one else now had to discharge that duty. I have seen (continued
the learned judge, with deep emotion) at least one of you under
very different circumstances, sitting at my side in high office,
instead of being where you now are, and I could scarcely then
have fancied to myself that it would ever come to me to pass
sentence on you. But so it is, and this is a proof, therefore,
that we all ought to pray not to be led into temptation. You
have been well educated, and held a high position in life, and
the punishment which must fall on you will consequently be the
more seriously and severely felt by you, and will also greatly
affect those connected with you, who will most sensitively feel
the disgrace of your position. All that I have to say is, that
I cannot conceive any worse case of the sort arising under the
act of Parliament, applicable to your offence. Therefore, as I
cannot conceive any worse case under the act, I can do nothing
else but impose the sentence therein provided for the worst
case, namely, the most severe punishment, which is, that you be
severally transported for fourteen years."
For the admiration of all in our America--for the imitation of
those who may be called to act in the like cases--with the sad
conviction that the administration of criminal justice is not equal
in our Republic to what it is in the monarchies of Europe: for
the benefit of all such, this brief notice of judicial action in
an English court against eminent, but culpable bankers, is here
given--contrasting so strikingly with the vain attempts to prosecute
those so much more culpable in our own country.