WASHINGTON, _March 11, 1834_.
_To the Senate_:
I renominate Henry D. Gilpin, Peter Wager, and John T. Sullivan, of
Philadelphia, and Hugh McEldery, of Baltimore, to be directors in the
Bank of the United States for the year 1834.
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 renominated
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 something 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 deposit.
The truth of the facts stated in these reports is not, I presume,
questioned by anyone. 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 can not 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 are made in obedience to my official directions, and I
herewith transmit copies of my letters 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 practiced? 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 can not 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 director 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 can not 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.
The whole frame of the charter, as well as the manner of their
appointment, proves this to be their true character. The United States
are not represented at the board by these directors merely on account
of the stock held by the Government. The right of the United States to
appoint directors and the number appointed do not depend upon the amount
of the stock, for if every share should be sold and the United States
cease to be a stockholder altogether, yet under the charter the right
to appoint five directors would still remain. In such a case what would
be the character of the directors? They would represent no stock and
be chosen by no stockholders. Yet they would have a right to sit at
the board, to vote on all questions submitted to it, and to be made
acquainted with all the proceedings of the corporation. They would not
in such a case be ordinary directors chosen by the stockholders in
proportion to their stock, but they would be public officers, appointed
to guard the public interest, and their duties must conform to their
office. They are not the duties of an ordinary director chosen by a
stockholder, but they are the peculiar duties of a public officer who
is bound on all occasions to protect to the utmost of his lawful means
the public interests, and, where his own authority is not sufficient
to prevent injury, to inform those to whom the law has confided the
necessary power. Such, then, is the character and such are the duties
of the directors appointed by the United States, whether the public be
stockholders or not. They are officers of the United States, and not
the mere representatives of a stockholder.
The mode of their appointment and their tenure of office confirm this
position. They are appointed like other officers of the Government and
by the same authority. They do not hold their offices irrevocably a year
after their appointment; on the contrary, by the express terms of the
law, they are liable to be removed from office at any time by the
President when in his judgment the public interest shall require it.
In every aspect, therefore, in which the subject can be considered it is
evident that the five directors appointed by the United States are to be
regarded as public officers who are placed there in order to observe the
conduct of the corporation and to prevent abuses which might otherwise
be committed.
Such being the character of the directors appointed on behalf of the
United States, it is obviously their duty to resist, and in case of
failure to report to the President or to the Secretary of the Treasury,
any proceedings of the board by which the public interests may be
injuriously affected. The President may order a _scire facias_ against
the bank for a violation of its charter, and the Secretary of the
Treasury is empowered to direct the money of the United States to be
deposited elsewhere when in his judgment the public interest requires it
to be done. The directors of this bank, like all others, are accustomed
to sit with closed doors, and do not report their proceedings to any
department of the Government.
The monthly return which the charter requires to be made to the Treasury
Department gives nothing more than a general statement of its pecuniary
condition, and of that but an imperfect one; for although it shows the
amount loaned at the bank and its different branches, it does not show
the condition of its debtors nor the circumstances under which the loans
were made. It does not show whether they were in truth accommodations
granted in the regular and ordinary course of business upon fair banking
principles or from other motives. Under the name of loans advances may
be made to persons notoriously insolvent for the most corrupt and
improper purposes, and a course of proceeding may be adopted in
violation of its charter, while upon the face of its monthly statement
everything would appear to be fair and correct.
How, then, is the executive branch of the Government to become
acquainted with the official conduct of the public directors or the
abuses practiced by the corporation for its private ends and in
violation of its duty to the public? The power of displacing the public
directors and that of issuing a _scire facias_ and of removing the
deposits were not intended to be idle and nugatory provisions without
the means of enforcement. Yet they must be wholly inoperative and
useless unless there be some means by which the official conduct of the
public directors and the abuses of power on the part of the corporation
may be brought to the knowledge of the executive department of the
Government.
Will it be said that the power is given to the Secretary of the
Treasury to examine himself, or by his authorized agent, into the
conduct and condition of the bank? The answer is obvious. It could not
have been expected or intended that he would make an examination unless
information was first given to him which excited his suspicions; and
if he did make such a general examination without previous information
of misconduct, it is most probable that in the complex concerns and
accounts of a bank it would result in nothing, whatever abuses might
have been practiced.
It is, indeed, the duty of every director to give information of such
misconduct on the part of the board. But the power to issue a _scire
facias_ and to remove the deposits presupposes that the directors
elected by the stockholders might abuse their power, and it can not be
presumed that Congress intended to rely on these same directors to give
information of their own misconduct. The Government is not accustomed
to rely on the offending party to disclose his offense. It was intended
that the power to issue a _scire facias_ and remove the deposits be
real and effective. The necessary means of information were therefore
provided in the charter, and five officers of the Government, appointed
in the usual manner, responsible to the public and not to the
stockholders, were placed as sentinels at the board, and are bound by
the nature and character of their office to resist, and if unsuccessful
to report to the proper authority, every infraction of the charter and
every abuse of power, in order that due measures should be taken to
punish or correct it; and in like manner it is their duty to give, when
called upon, any explanation of their own official conduct touching the
management of the institution.
It was perhaps scarcely necessary to present to the Senate these views
of the power 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 everything 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 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 anyone 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.
But if I do not mistake the principles on which the Senate have recently
rejected them, the conduct which I deem worthy of praise they treat as
a breach of duty, and in their judgment the measures which they took to
obtain the informations and their efforts to put an end to the practices
disclosed and the reports they have made to the Executive, although true
in all their parts, are regarded as an offense and supposed to require
some decisive mark of strong disapprobation.
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 can not consent to place before the Senate
the name of anyone 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 can not 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 if 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 can not 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.
I repeat that I do not claim a right to inquire into or officially
to censure the acts of the Senate, but the situation in which the
important interests of the American people vested in the Bank of the
United States and affected by its arrangements must necessarily be left
by the rejection of the gentlemen now renominated has made it my duty
to give this explanation to the Senate and submit the matter to their
reconsideration. If it shall be determined by the Senate that all
channels of information in relation to the corrupt proceedings of this
dangerous corporation shall be cut off and the Government and country
left exposed to its unrestrained machinations against the purity of the
press and public liberty, I shall, after having made this effort to
avert so great an evil, rest for the justification of my official course
with respectful confidence on the judgment of the American people.
In conclusion it is proper I should inform the Senate that there is now
no Government director appointed for the present year, Mr. Bayard, who
was nominated, and confirmed by the Senate, having refused to accept
that appointment.