Alexandria gazette & daily advertiser. [volume] (Alexandria [Va.]) 1817-1822, 1819-01-23

HOUSE OF REPRESENTATIVES,, JAN. i6.
BANK OF THE UNITED STATES.
(Conciuded.)
Besides the objection which has already
been urged to the resolution of the 9Th Aug.
1917, auth rising the president and cashier
to discount notes, as being connected with
series of proceedings evidently calcula-
ted to enhance the price of stock, by at
fording facilities to the making Of prompt
purchases, it is still more Objectionable, as
being delegation of power which, in the
opinion OF your committee, the directors
had no right to grant. And when, connect
ed with the power also given to them, OF
indefinite and unlimited renewal OF the
stock notes it was placing the great bulk OF
the capital Of the bank entirely within their
control. The same practice appears to
have been almost universal at the office IN
Baltimore, where the president and cashier
as appears by their examinations. have I'M
der the authority of the board OF directors
atthat place, always discounted notes with
cut an endorser, secured by pledge OF
stock. As they were not restricted ny the
board they appear accordingly TO have ex-
crcised The power to very considerable ex-
tent. Still more Objectionable in the opin-
ion of your committee, is the practice OF
that Office of allowing the president and
cashier 10 purchase or discount drafts and
bills, payable from sight TOGO days; because
in those discounts, the personal security is
the most important circumstance. II has
been done to very large amount, though
no loss appears yet TO have accrued. AT
Richmond, an equally improper delegation
OF power to the cashier, appears to have
been granted, in authorizing himto discount
notes on pledged stock, at so days; and at
forwards, similar authority to discount at
i months. After an experiment OF three
weeks, the directors of that office had the
wisdom to abandon it, vide papers OF Rich
mopd Office, XLVI. At the Office in this
city, the power has been discreetly limited
and as discreetIy exercised. Two bye laws
Of the bank seem to your committee TO de-
serye notice-one of them, that no discounts
shall be made without the consent OF three
iourths of the directors present and an
other. that no director, without special au-
thority, shall he permitted to inspect the
cash account OF any person with the bank,
These bye laws appear to render nugatory
5 the provisions of the charter, authorizing
the appointment, by the government, Of
one-6fih of the whole number of directors;
and are different from the provisions in that
respect by the former bank of the United
States, although most of the local banks
in Philadelphia have similar regulations.
Should state of things exist, in which the
Stockholders should deem their interest hos
tile 10 that of the nation, such provisions as
those stated would render the government
directors mere spectators of the proceedings
OF the board. The committee endeavoured
TO obtain statement of the shares, upon
which the instruments had not been paid,
AMI of the persons owing them. The 9th
GERS OF the Bank satisfied them that, from
The irregular manner in which the accounts
of the payments had been made, ii was I'M
possible to obtain an accurate statement.
But the fact is admitted, that the dividends
have been paid 10 some delinquent stockhol-
ders. who are few, and to whom but a small
amount of stock belongs. The dividends
have been uniformly paid TO those stockhol-
ders whose notes were discounted to the
full par value of the stock, with the proceeds
of which they paid their instalments, inciu-
ding the funded part as we'll as the specie
part. The injustice Of this proceeding to-
wards those Who had really paid their III
stsiments according to their engagements,
and who received no more benefit from
those payments than those stockholders who
substituted heir stock in place OF specie y
funded debt, is most obvious. The stock
thai had really never been paid for, but
which remained pledged for the very credit
given it, was entitled 10 draw, and did draw
as much dividend as that which had been
fairly and punctually paid.
The root and source of all these instances
of misconduct, was the illegal and repre-
hensibled iyision Of stock. By the first fun
damcntal article of the charter, no person,
sopartnership, or body polite, shall be en-