ernment on that of France for about $900,000, being the first instalment of the French indemnity, and which the bank had purchased. The purchase money was left in the use of the bank, being simply added to the treasury deposit ; and yet the bank demanded fifteen per cent. as damages, when no damage beyond a trifling expense had been sustained, Such a fiscal agent of the government was not worthy of further trust. To this the directors reply, that the bank, in this operation, was not the fiscal agent of the government. The bank did not wish to purchase the bill at all, but proposed to collect it, paying the money only after it had been received by its agents in France. It was not true that the money was left in the use of the bank, and simply added to the treasury deposit. The sum was passed to the credit of the treasurer, and the proceeds of this identical bill had been used by the government for paying its ordinary expenses. And when the bill was protested in Paris, the agents of the bank there came forward and paid it: it had thus been paid twice over; so that the disbursements by the bank on account of the bill had actually been $1,800,000. It had called on the government for the principal and damages; and the government was bound on the principles of common honesty to pay the damages. It had been the uniform practice of the government itself, when it had purchased bills from private citizens which had been returned protested, to enforce its claim for damages.

All the allegations of the president against the bank were separately considered, and explained or denied. There had been no studied exclusion of government directors from committees. Nor had there been any “unusual remodeling" of committees. Nor was it true that “the president of the bank, by his single will, originated and executed many of the most important measures," &c.

The expenditures during the years 1831 and 1832, under authority of certain resolutions, were not $80,000; they were exactly $48,278 90, as explained in the report.

It was not true, as charged, “that publications had been prepared and circulated, containing the grossest invectives against the officers of the government;" or that the president of the bank had unlimited discretion to expend its funds,” in the manner alleged, " to operate on elections and secure a renewal of its charter.” The power actually given which had been exercised, and would continue to be exercised, was for the defense of the bank against the calumnies with which, for four years, the institution had been pursued.

The report of the directors also reviews the report of the four "gov. ernment directors;” but we may not extend this reply.

At the commencement of the next session of congress in December,

(

1833, secretary Taney made a long report to congress, giving his reasons for removing the deposits. His reasons were founded mainly upon the statements and allegations of the president and government directors, as given in preceding pages.

CHAPTER XLIX.

CONTINUATION OF THE BANK AND DEPOSIT QUESTION.—CLAY'S RESOLU

TIONS, AND THE PRESIDENT'S PROTEST.-POST-OFFICE INVESTIGATION.

The removal of the deposits took place the 1st of October, 1833; or, strictly speaking, the public moneys were no longer deposited in the bank of the United States; those remaining therein, being only drawn out as they were wanted by the government. The loans of the bank were curtailed; and a severe money pressure soon pervaded the country. Business of most kinds was greatly depressed. Bills of state banks depreciated in value on account of the demand for money; and banks were compelled to reduce their discounts. Public meetings were held in many places, and memorials to congress were prepared, praying for a return of the deposits to the bank of the United States. The memorial of the Philadelphia chamber of commerce, in enumerating the effects of this measure, mentioned the decline in the price of public stocks from 10 to 30 per cent.; the depression of the foreign and domestic exchanges; the fall in value of all the principal articles of domestic produce; the impossibility of borrowing on mortgage as formerly, even at the highest legal rates of interest; the ruinous discount on good mercantile

paper, which varied from 12 to 18 per cent.; the difficulty of obtaining cash advances on produce or merchandise; the discharge of laborers, and the suspension of mechanical and manufacturing business; the decline in the value of real estate, &c.

While the friends of the bank regarded this state of things as a natural and necessary consequence of the removal of the deposits, its opponents considered the scarcity of money as only artificial, and attributed the pressure to the panic produced by the bank and its friends for political purposes, or with a view to the renewal of its charter.

Its discounts, they said, had been unnecessarily reduced, with a design to embarrass the state banks, which had been compelled to contract their issues.

At no former stage of the bank controversy was there so intense an excitement on this question. This act of the president alineated many

of his former supporters. Meetings in many places were called, irrespec tive of party, and numerously attended by the friends of the administration; and resolutions unanimously adopted, condemning the removal of the deposits. Similar resolutions were also passed by the legislatures of several of the states. Those adopted by the Virginia house of dele

. gates, while they reiterated the opinion of the general assembly against the power of congress to establish a bank, pronounced the act of the president in exerting a control over the federal revenue, by causing its remoral, on his own responsibility, from the bank, where it had been deposited under the authority of congress," an unauthorized assumption and dangerous exercise of executive power;" and instructed their senators, and requested their representatives, in congress, to vindicate the constitution, and redress the evils thus occasioned. The legislatures of New York, New Jersey, Ohio and Tennessee, on the other hand passed resolutions approving the course of the president.

The reality of the scarcity of money was a fact too palpable to be disputed; the great point in controversy was the cause. The aggregate loans of the bank, on the 1st of January, 1833, were $61,695,613, when it had in deposit, $20,271,221. January 1st, 1834, three months after the deposits were removed, the amount of loans was $54,911,461, and of deposits, $10,965,375; showing the reduction of loans to have been $2,521,393 less than the reduction of deposits, during the year.

One of the reasons alleged for the curtailment of its operations, was the apprehension of an attempt, on the part of the government, to embarrass it. Mr. Kendall, the government agent, in a letter to a New York editor, a few days after the removal of the deposits, spoke of the effects of a sudden withdrawal of the public moneys, (then nearly ten millions) from the bank, and added: “Yes, sir, this boasting giant is but a reptile beneath the feet of the secretary of the treasury, which he can crush at will. It exists by his forbearance, and will, for the next forty days; and great forbearance will it require to save it from destruction.”

A few weeks after, the bank was surprised by the presentation of a number of large drafts, one of $100,000 at the branch in Baltimore, and two others, one of $100,000, and another of $500,000, at the bank in Philadelphia, all of which were paid. Three others, of $500,000 each, had been drawn upon the branch in New York. These drafts were all in favor of the state banks in these places selected to receive the deposits. It had been the uniform practice of the treasury to transmit to the bank a weekly statement of drafts to be made upon it; but these large sums were drawn for without the usual previous notice. The belief that the unexpected demand of these secret drafts was designed to embarrass the

bank, was strengthened by certain articles in the official paper, the Globe, in one of which, alluding to the “ runs upon Mr. Biddle's bank,” the editor said: “In more ways than one can the people make their power manifest; and the trepidation displayed in the bank hive when the people, in a portion of Kentucky, by a spontaneous movement, began last year to cash its paper, has taught us how to make war with effect, whenever the conduct of the bank shall make it necessary or expedient."

The 23d congress met on the 3d of December, 1833; and some hopes were entertained that measures would be adopted to mitigate the distress which pervaded the whole union, and affected almost every branch of business. During the winter and spring of 1834, many banks were compelled to stop payment. A large number of memorials were sent in to congress, praying for a restoration of the deposits to the bank of the United States. Numerous remonstrances also were presented against their return to that institution. The state of parties in congress at this time was such as to forbid the adoption of the measure prayed for, or of any other which was designed to afford relief.

In the senate, Mr. Calhoun and his friends now acting with the opposition, the administration party was in the minority. In the house, parties were subdivided into the Jackson party proper; the Jackson Van Buren party; the Jackson anti-Van Buren party; the anti-Jackson party; the nullifying anti-Jackson party; and the anti-masonic and anti-Jackson party. The three first named generally acting together, gave the administration a considerable majority, as appcared from the vote in the choice of speaker; Andrew Stevenson, of Virginia, being reëlected by a vote of 142 to 66, and 9 blanks.

In the senate, the practice which had existed in that body since 1828, of the appointment of committees by the president of the senate, was changed. Their appointment by the senate itself was reëstablished.

The removal of the deposits oocupied a large share of the attention of congress at this session. It was brought to their consideration, both by the message of the president, and the report of the secretary of the treasury communicating his reasons for the removal. It was discussed on a great variety of motions, resolutions, calls for information, &c.

In the house, on the motion to refer the secretary's report to the committee of ways and means, Mr. M'Duffie moved to instruct the committee " to report a resolution, providing that the public revenue hereafter collected shall be deposited in the bank of the United States, in compliance with the public faith, pledged by the charter of the said bank." He supported his motion by a long speech, in which he reviewed the conduct of the president and secretary in removing the deposits, alleging that the author of the act was the president, who had no power over the deposits. He spoke of the distress produced by that measure, and he vindicated the bank from the numerous charges pre. ferred against it by the president and secretary.

He was replied to by Mr. Polk, at great length, in defense of the president, and in reprehending the conduct of the bank. Mr. P. maintained that the president had power over the heads of the departments. Being responsible to the people for the faithful execution of the laws, he must have the power to control the conduct of his assistants, not excepting the secretary of the treasury. It would not be pretended that congress could either appoint or remove that officer; they could reach him only by the tedious process of impeachment.

Mr. P. referred to Mr. Madison and his cotemporaries to prove the responsibility of the president for the executive department, and the consequent power of removal.

He also referred to the act of secretary Crawford, in 1817, who informed congress that he had made deposits in local banks, to aid them in resuming specie payments, and for other purposes.

Mr. Polk considered the several allegations against the bank of misconduct, and endeavored to show that they were well founded; that there was no necessity for the system of curtailment adopted by the bank. The secretary had stated in his report, and the bank returns corroborated the statement, that from August 1, to October 1, 1833, the bank had curtailed its discounts upwards of $4,000,000, while its means of discounting had been increased by an increase of deposits. He said the bank had so timed its reduction as to produce a pressure about the time of the meeting of congress, to induce the state banks to appeal to congress for a recharter of the bank of the United States. The mere transfer of the public money could not have produced the pressure; the money was still in the country. Nor must the pressure be charged to the local banks; their curtailments had become necessary to protect themselves from the effect of the excessive reductions by the bank of the United States.

Mr. Polk, in noticing the reasons assigned for the large increase of loans by the bank from Jan. 1, 1831, to May 1, 1832, said, if it had become necessary, in consequence of the unusually large importations, for the bank to extend its business, to enable the merchants to sustain themselves and the credit of the country, it was equally incumbent on the bank to extend its accommodations to the importing merchants in 1833, when the importations exceeded those of 1831, by eight mil. lions. But it was apparent that the course of the bank was governed by political considerations.

Against the statement of the president of the bank, that the post