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shortly thereafter it commenced its opposition offices under the General Government. To

to the bank, and was, for sixteen months warm-this last resolution were added the following l, opposed to it; and that, on or about the 8th amendments, viz.: “1st. A statement of the of April, 1831, it changed its course in favor offloans made by the bank and its branches, to the bank. Connected with this fact, is an admission on the part of one of the editors, that before the first loan was negotiated he held a conversation with a gentleman, through whom the loan was then negotiating, (who the committee know to be Burrows,) in which he, Burrows, urged the editors, one of whom, Webb, hidespressed himself infavor of a modified redureñ) to advocate an unconditional renewal, “but expressed great satisfaction at learning that [one] was in favor of a charter under any circumstances.” The committee will state they were anxious to obtain the testimony of Burrows, but were unable to do it. A subpoena was issued for him and sent to New York, to which the marshal returned he was not to be found. It was then sent to Washington city, and the Sergeant: it-Arms made the same return. The marshal of Pennsylvania was directed, by the chairman, to make and continue a search for the witnes: in Philadelphia, having heard of his expected anival in that place; that the marshal reported to the chairman that he ascertained that the witness had arrived in that place, on Thursday the 5th instant; but he was not able to serve the process becausehe could not be found. To an inquiry whether there were any other instances of notes being discounted for the ac


on of any merchant and trader, at 1,

2,3,4, and 5 years' credit, unless to secure a
debton jeopardy, there was presented to the
committee four other cases.
9nthe 3d of April the committee, by resolu-
lution, called for the following statements to
assist them in the elucidation of certain facts

which had

appeared in other documents, viz:

1st. A tabular statement showing the aggregate amount of notes discounted and still due the bank, drawn and endorsed by non-residents of Philadelphia; which will be found marked A.

2d. The

aggregate amount of good notes of

fered for discount, and rejected by the boatsá;

drawn and

phia, on the following days respectively: 9th of

endorsed by residents of Philadel.

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and 15th October, 1830. That state

*ent, marked B., will show the amount of notes *ounted; but the officers of the bank state theirinability to discriminate between those that

are good or 3d. The

aggregate amount of notes dis-

onted on personal security, and made pay

able more than six months after date, which

Appear to be only four in number, besides the case of J. W. Webb and M. M. Noah.

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members of Congress, editors of newspapers, and officers of the General Government, and the terms of such loans.” “2d. And the names and amounts of payments to members of Congress, in anticipation of their pay as members before the passage of the general appropriation bill.” “3d. And the amount of money due the United States, and on deposite in the bank, after deducting therefrom the sum thus , advanced to those to whom the United States are indebted.” “And lastly, a statement in detail of the amounts paid to those who are now, or have been members of Congress or officers of Government, since 1816, for services rendered to the bank, stating the nature of the service. For the information-sought by these inquiries, see papers marked C. Besides these, there were furnished the statements of loans made to five editors or publishers of newspapers, by which it will?ppear, that the accommodations to those five editors were upwards of $110,000 previous to the institution of this inquiry. The various reports which have, for a long period past, charged the bank with too frequent intercourse with brokers, and also of undue favoritism to certain individuals, as well as the large transactions which exhibited themselves upon many documents called for by the committee, induced them to examine particularly the accounts of the firms of which Mr. Thomas Biddle was and is the chief partner with the bank, as a broker. Four subjects of investigation presented themselves in relation to their transactions with the bank. 1st. The allowing and paying interest to them on deposites. 2d. Relates to certain loans upon the pledge of stock, and the discounting of notes made to T. Biddle by the P. or others, without the knowledge of the board, and on part of them, the pledge of stock, without interest.— The committee would refer for the particulars of * two charges to the papers marked No. 13. The third subject is the amount of discounts made T. Biddle, and the rate of interest. The document marked No. 14 will show the amount on the 15th of each month from the 15th day of September, 1830, to the 15th of February, 1832. By this, it appears, that on the 15th of October, 1830, he had discounted upwards of $1,120,000, and has at no time since been less tha 0,000. The committee doubt the policy ch large accommodations to individuals or firms, at any time, as it deprives the bank of the power of fulfilling one of the great objects of its institution, which is to facilitate trade by loans in time of pressure, and it may be proper to add, that these 1 loans, at a low rate of interest, in times on money is plenty, are usually followed by overtrading, which produces pecuniary embarrassment and

general distress. -

By a statement entitled “Remittances to Europe,” marked No. 16, it appears that the foreign purchase of foreign bills were made of Thomas Biddle and Co., drawn by them, viz: 1831. Oct. 14, 1 bill 60 days sight, and at a premium of 103 per cents. $32,399 68 Oct. 14, 3 bills at 75 to 90 and 105 days, and at a premium of 104 per cents. Oct. 22, 13 bills at 40 to 125 days, and at a premium of 11 per cent. Dec. 10, 9 bills at 40 to 110 days, and at a premium of 10 per cent. 1832. Feb. 14, 14 bills at 40 to 105 days, and at a premium of 10% cents. Feb. 14,3 bills at 50 to 70 days, ‘and at a premium of 11 per ct. 148,000 00

$1,794,060 79 By the foregoing statement, it appears that the bank purchased, between the 14th of October, 1831, and the 14th February, 1832, of T. Biddle and Co. foreign bills to the amount of $1,794,060 79. With regard to these large loans, the committee refer to the statement marked No. 19, by which it appears that, on the 9th of April, 1832, the total amount of discounts on bills and notes at the bank in Philadelphia, was $7,939,679 52. Of that sum more than two-thirds were loaned to ninety-nine persons, to wit, $5,434,111. More than $3,000,000 were in the hands of twenty-seven individuals; and nearly one seventeenth part in the hands of one person. “The committee have already expressed their conviction that these large accommodations, to a few individuals, are injurious to trade generally, and they will add, that they ought always to be made by either the board of directors, or the committees empowered by them for that purpose. For an explanation of this subject, see papers numbered 13 and 18. Properly connected with this subject is the accommodation extended by the bank to individuals on the pledge of stock. In all the monthly statements of the condition of the bank, prior to the first of March last, there was no column showing these loans. In that month,

115,411 11 592,000 00 506,250 00

400,000 00

for the first time, so far as the committee can],

discover, a new column is exhibited, entitled “loans on other stocks,” and which appeared, at that time, to have been transferre line called “bills discounted on personal securi ty.” This change was made in consequence of a call for stock loans, by the House of Representatives. A statement of the same called for, marked No. 20, which exhibi list of stocks pledged, consisting of Theatre shares, Museum stock, Arcade stock, Railroad and Canal stocks, Coal company stock, real estate in Louisiana, &c. &c., amounting to the sum of $1,713,297 34. The various transactions in specie, by the bank, has been a subject of special notice by the committee, and various statements called

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branches, since 1819, is $896,472 10 The premium received on the specie sold, is - - " 97,14056 The premium paid on the specie purchased, is - - 19,171 85 $77,968 71

What profits were made on the specie exported, the committee did not call for documents to enable them to ascertain; it must, however, from the great quantity sent away, have been considerable.

The committee called for a statement of all the specie imported by the bank from abroad, since 1819; but, as none was returned, they presume none was imported.

What proportion of the gold exported was American coin the committee have not before them the means to determine ; it was expected to have been given in the statement; but in

for, show the magnitude of them. *

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looking into them the gold exported is without
a designatory name; it is believed, however,
the amount is considerable.
In examining this subject minutely, the com-
mittee find that large amounts of the specie
have been drawn from the office at New Or-
leans. Of this there can be no complaint ; it is
the principal depot for returns of goods shipped
to Mexico, which are almost exclusively paid

from the proceeds the funds to meet his obligation, and the bank to transmit the same to the place upon which their bills are drawn, (which are at six months sight,) long before they become due. It would seem to produce a greater export of specie eventually, than would otherwise take place if the operations were commenced with specie, and not with bills purchased in the manner described; for the merchant, re

* on specie, and it cannot be expected that it lying upon his immediate resources, would not – will remain there. But the committee suggestsengage to such an extent in the business, and ... whether the withdrawal of the specie from most would combine in the operation much of the * Mthe other ports of the country, and substitut-produce of the country; whereas, relying up* ing paperin its stead, might not be highly inju-son an extensive credit, he hazards everything o wo those sections of country subject to its on the success of the enterprise. It is a spe**, operation. cies of speculation in e leading to great – The subject of the bank's furnishing bills of risks,and certainly terminating in overtrading— ... exchange for the trade of India, China, and the evils of which the country is now solely ex; South Amerits, has been brought to the atten-periencing. By loans of a similar character by ," tion of the committee by document marked No. insurance companies providing funds for traders | 25; and having been so stongly...described as to China, Government has sustained more loss T. affording great advantages to the country, in than in any other branches of trade. of the tennial repdot of September last, as “eco-l. The increase of the number of branches esta* nomising” the specie of the country. The blished since 1832, cannot be passed over in # committee have felt it a duty to examine and silence by the committee, and deserves, as a present the subject to the consideration of Con-source of extended influence of the bank, the | and the commercial community, believ-most serious consideration. ing, as they do, that there is something delu-|. In some few instances where new branches

sive in the operation. The result of their exa-
mination has led them to the conviction that
this new method of dealing in bills of exchange
does not “economise” the specie of the coun-
tly at all. It is a universal law of . that
funds must either go before or follow after the
draft to honor it at maturity; and whether it
goes directly or circuitously, the funds to dis-
charge it must, sooner or later, arrive at
the place of payment. These hills are to
be paid in England; but they go round the
Cope of Good Hope before they reach their
Place of destination Instead, therefore, of
**ing the specie directly to India and China,
*formerly, who does not perceive that it must
now be sent to England, the country upon
which these bills are drawn, there to meet them
upon their arrival at the place where they are
to be paid? The bank consequently becomes
the shipper of the specie, to pay its bills, in
Place of the merchant to purchase his merchan-
dise in the East Indies. It is simply and purely
nothing but a change of the destination of the
operie, with only the advantage of its going to
The mode in which these bills are drawn and

have been established, perhaps they may have
been called for by the community, and may
have been useful to them and profitable to the
bank; but, in most of the cases, the committee
doubt whether they were called for from pub-
lic utility, and their establishment will, in the
end, not only prove unprofitable to the bank,
but very injurious to the communities among
which they are located. Mr. Cheves, in a let-
ter of the 27th of May, 1819, to Mr. Crawford,
then Secretary of the Treasury, says: “I am
perfectly satisfied that, with the present orga-
nization of the bank, it can never be managed
well. We have too many branches, and the di-
rectors are frequently governed by individual
and local interests and feelings. For a time we
must bear with the branches, but I hope they
will be reduced.”
Again, in the same letter, he observes, “the
real and original evil under which the country
is suffering is over-banking. This leads to ex-
cess in trading, manufacturing, building; and
the history of the ill-judged enterprises which
have been undertaken in these several con-
cerns, would give a full history of all the dis-
tresses of this country, excepting a little agri-

disposed of to the pnrchasers, having twelve cultural distress growing out of the inordinate monthsto run, as will be seen by a copy of the expectations which the others excited.” These obligation taken by the bank, marked No. 27, opinions fully accord with the views of the comthe committee consider of doubtful utility tolmittee; and they consider them as peculiarly apthe country. The legitimate object ofbanks, the plicable to the present time, as exhibiting simiomittee belive to be, the granting facilities, lar causes now operating with extended force, otkaning capital.The supplying of billsappears from which similar effects must follow, aug. even much more objectionable than loaning ca-lmented in proportion to the increase of its pital, for it encourages an operation which com-branches.

mences and ends without the employment of The stockholders, at the triennial meeting on any capital whatever, and is similar in their cha-the 1st of October, 1822, recommended a withfacter to respondentia securities. The buyer drawal of some of the branches then existing, * enabled, within the term of credit, to make|in these words: “In taking into view the busithe voyage, dispose of his goods, and obtain'ness of the bank, as connected with its offices,



the committee think it right to recommend to
the continued attention of the president and di-
rectors the necessity of withdrawing those
branches which are found to be unprofitable,
and transferring their funds to the offices which
shall seem to require additional capital.” Since
this period two have been discontinued, and
nine others have been established, as per tri-
ennial report of 1831. These opinions of Mr.
Cheves, in which the committee have coneur-
red, were approved by the stockholders, as will
appear by the following extract from this same
report in 1822. . They say, “they take great
pleasure invunanimously declaring that the cir-
cumstances of the bank fully realize their an-
ticipations as expressed at their last meeting in
regard to the president, (Mr. Cheves,) who,
by his talents, disinterestedness, and assiduity,
has placed its affairs in an attitude so safe and
prosperous as that the burthen of duty devolv.
ing upon his successor will be comparatively
li t.”
*. committee cannot but think that, had

the succeeding direction of the bank been gui-
ded more by the opinions and wishes of the
stockholders, as then expressed, and gone on
gradually growing with the growth, and in-
creasing with the natural wants of the country,
great sufferings to the community would have
been avoided. * - - ,

In the year 1819, great abuses existed in the branches, of which Mr. Cheves speaks without reserve, in his last report to the stockholders,as well as in his correspondence" with Mr. Crawford, and upon casting the eye over the monthly statements, it is remarkable to observe what losses have taken place at the branches compared with the mother bank. For instance: on the 1st of Jan last, the loss of the mother bank, on a capital of sixteen millions and a half was, in round numbers, $328,000; that of the Baltimore branch was, $1,662,000, on a capital of one million and a half, so that it lost more than its capital. That of the Norfolk branch was $229,000, on a capital of 500,000, losing nearly one half of its capital, and so with all the rest of the branches, their losses are out of all proportion to their capital, and ten times greater than the mother bank, according to the amount of their respective capitals. These los. ses, however, were principally incurred prior to 1819. The proper inference to be drawn from these facts is, that the worst of mismanagement has existed in the branches.

The “Contingent Fund” has claimed the attention of the committee. The object for which it was originally created, and the original amount provided, together with the additional ap: propriations which have been made to it, and the manner in which the same have been ap

lied at different periods, will all be explained in the following documents.

The report of the board of directors, in July, 1821, published in the gazettes at that time,

marked No. 30; a statement of the suspended

thereon, marked No. 31; the statement head.
ed “Contingent Fund,” marked No. 32; the
sales of the forfeited bank stock, marked No.
33; and the dividend reports for July, 1829, Ja.
nuary and July, 1830, January and July, 1831,
marked No. 34. To these the committee refer
for the particulars of the subjects to which they
relate, in eonmection with the “Contingent
Fund.” -
The committee feel it their duty now to give
their views as to the causes of the present dis-
tress in the trading community, and which they
fear may greatly increase. It is an acknow.
ledged principle that like causes, in all casa,
produce like effects; and as in 1819 contraction
followeed the expansion of 1817 and 1818, so
by the same rule must contraction follow the
immense expansion of 1830 and 1831, and like
effects and consequences succeed. To illus.
trate more clearly the position, and bring it
home to the minds of every one, the following
table of the state of the bank during some of
the mouths of 1818 and 19, and 1831 and '32,
are here exhibited, embracing items from
which direct calls upon the vaults proceed,
the immediate means which remain to meet
them, viz: The first are the deposites, circula.
tion and debts abroad, not on permanentloan.
The second, the specie, funded debt, and notes
of other banks, the amount of each will be
found under their proper heads at the various
periods mentioned. [For table see page 192.]
The preceding table shows that, at no period
in 1819, when the bank was very near suspend-
ing payment, was it less able to extend relief to
a suffering community as at the present mo
ment. In April of that year, the month in
which its difficulties were the greatest, it:
means of specie, notes of other banks, and
funded debt (which could have been turned in-
to specie or notes of other banks) amounted to
upwards of ten millions of dollars; and the
whole demands, which could come against it in
the same month, of circulation, deposites, and
debts owing abroad, amounted only to about
fourteen millions. But the committee feel
bound, in candor, to state, that this was after a
number of months of constant contraction, not
only by the Bank of the United States, but also
by most of the other banking institutions of the
country, where a general exhaustion had been
produced. It was on the 6th April, 1819, that
Mr. Crawford, then Secretary of the Treasury,
writes to Mr. Cheves thus: “It is even doubt-
ful whether it is practicable, with all the exer.
tions which it is in your power to make, to con-
tinue specie payments through the year.” Un-
der the same date, he says: “My impression is:
that the safety of the bank can only be effected
by withdrawing nearly the whole of its papers
in circulation. "If the bank does this, all other

marked No. 28; the report of the stockholderssolvent banks will be compelled to de the same,

at the triennial meeting in October, 1822; the

When this is effected, gold and silver will be

report of the Dividend Committee, on the 16th introduced into the country, and make a subJanuary, 1823, marked No. 29; a statement of stantial part of the circulation, and enable the

the particulars of the debts “considered lost,” to

debt and real estate, with the probable loss t


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o: *notes, payable at distant offices, were then ... to discounted at the Bank of the United

Wales, and the different offices. ... one issued by the bank, without regard to the

outs of the community, or the effect upon the othing medium, which became depreciated, o the precious metals from the country; ... od, until the reaction had operated to check ... too, led to extravagant speculations, which - in ruin; and relief was not obtained until the circulation of the Bank of the United

i. dollars. Before his was accomplished, the ex-
o ent was resorted to, of curtailing loans;
oo and, while they were doing that, they continued
... theisle of bank notes, thereby continuing the
“ilwhich they were striving to avert.
Whitis the state of the banknow?.
On the 1st of March, (see monthly statement
marked No. 35) the bank had $6,800,000
pede, $2,840,000 notes of other banks, and of
olded debt none!! making an aggregate of
$54,000 to meetitscirculation of$33,717,000,
*Polesł17,050,000, and foreign debts owing
o,000, making in aggregate of $42,643,-
W; and this evil exists while a reaction or con-
tortion is operating to a considerable extent,
This contraction commenced on the 7th of
%toberlast, and is evidenced by the following
†ollar, which indicates, beyond all doubt, that
the bank had overtruded.

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o Baxx United States, Oct. 7, 1831.
... .St.Theunusually heavy reimbursements of
* | * millions of funded debt, which was, on the
o l; instant, advertised by the Government to
o * Place on the 1st and 2d days of Jamuary
* * * but which, according to subsequent no-
tite from the T Department, under yes-
! Wray's date, may, it appears, be demanded of
* * bank, by the public creditors, at any period
o le Present quarter, is calculated to press
o: Wilconveniently upon the parent bank, and
* Upon the office at New York; the more so, from
*ntertainty as to the time when the necessa-
, owision must be made, and from the pre-
§ active demand for money. Be pleased,
l o, so to shape your business immediate-
low without denying reasonable accom.
* to your own customers, or sacrificing
otest of your office, you may throw, as
* possible, a large amount of available
*into our hands in Philadelphia and New
ls, and at the same time abstain, as far as
orable, from drawing upon either of those
* checks and short drafts on the local
and on individuals, will prove particu-

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| The committee believe that the course of o, orations by the bank, during the years 1830 ad1831, have been nearly of a similar characto those of theyears 1817 and 1818. Drafts

Bank notes

i States had been reduced to about 4,000,000 of

r|larly acceptable for several months to come, and
whenever directolaims of that kind, on those two
places are not to be procured, you might mate-
rially aid us, by taking drafts upon the large ci-
ties nearest to them.
I am, respectfully, your obedient servant,
W. McILWAINE, Cashier.
Addressed to the CAshi Ehs of all the offices.

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Making an aggregate diminution of its means to meet its momentary demands, since the 1st of September, of $8,243,043 94, whilst during the same period, those demands have increased $4,197,871 51, viz: the circulation, deposites, and foreign debt, the aggregate of which was, on the 1st September $38,452,758 67, and on the 1st April $42,650,630 18. The measures and the effect appear to be similar to those preceding 1819. The extensive discounting of domestic bills and drafts, payable at distant branches, the amount being on the 1st of April, per monthly statement, $20,354,748 79. The orders for curtailing at the western branches, and the curtailing at the principal offices in the Atlantic cities, and at the Bank of the United States, the amount of which, at the Bank of the United States, between the 5th day of January and the 29th day of March, is $1,810,408 37; at the of. fice of New York, between the 4th day of January and the 28th day of March, is $259,305 43; at the office of Boston, betweea the 5th day of January and the 29th day of March, is $167,860 85; (and that too, on a discount line of less than two and a half millions of dollars;) at the office of Baltimore, between the 16th of January and the 2d day of April, $123,741 63, and on a discount line of little more than two millions of dollars, as will be seen by the weekly statement of those offices and the Bank of the United States, marked No. 36. The most remarkable feature which presents itself to the view of the committee, connected with the present situation of the bank, and the course of operations upon it since the 1st of Septemberlast, is the increase in the circulation of its notes, which amounted on the 1st September to $22,399,447 52, and on the 1st April to $23,717,441 14, making the increase of$1,317,993 62. During this period the bank undertook to check the exportation of specie by supplying bills at such a rate as left no inducement for individuals to ship it; to do which, they exhausted all the o which they could procure from Svery source. Over $5,000,000 were remitted, as per statement marked No. 16, and still left them with a debt of more than $1,700,000 in Europe at this

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