Constitutional Whig. [volume] (Richmond, Va.) 1824-1832, 1832-05-18
a.. SHAPES, ssANEA.
IN THE HOUSE OF REPRESENTATIVES,
FRIDAY, MAY IL, 1882.

:
of the Bank of the United States, submitted
the following, Us the views of the minority OF
the said COMMITTEES:
The minority of the Committee, appointed q
examine the books and proceedings of the Bank
OF the United States, dissenting from the Report
OF the Majority, beg leave TO present the grounds
OF their dissent for the consideration of the House
The majority of the Committee have submit
ted, without expressing any decided opinion on
them, six cases which they allcgc to have become
SUBJECTS of imputaton against the Bank, touch
ing the violation of its Charter.
| The first of these relates to usurous loans
and occurred far back as 1922, during the Pre-
sidcncy of MIR. Chcvcs The Branch Bank at
| Lexington, had received large amount of the
notes of the Bank of Kentucky, Il portion of them
as Government dcpositcs. These notes were con-
siderably deprecated. The Branch having de-
ciincd issuing any of its own notes, in obedience
to orders of the mother Bank an individual APP
Piled for Il loan of these deprecated bank notes
alleging that he wanted them to pay Il debt, and
that they would answer his purpose as well as any
othcr bills. The loan granted. The Bank of
kentucky was, at the time, regularly paving to
tue Branch, interest on these notes, and finally
redeemed all that renamed, few months after
| the loan In question: 1t thus appears that these
bills were as good as cash to the Bank, and the
borrower alleged that they were of equal value to
an III Is difficult TO conceive any solid ground
Tor considering this "A case of usury. 1t would be
as reasonable to say, that it would have been usu
| rry, for the Bank of Kentucky itself, to make a
| loan OF its own deprecated notes. The utmost
fairness WAS exhibited by the Branch Bank, in this
| transactions; the loan was made with reluctancc
alter repeated applications and yet the Directors
| OF tho Mother Bank, many years afterwards and
since MIR. Biddlc has been at the head of Inc Insti
| tuition, refunded to the borrower of the Kentucky
notes, the full amount of the difference between
their nominal and their real value at the time of
the loan, with interest. This has been also done
| III another similar case; that, in the only two
cases which have been broug ht to the view of the
n MI for 80
wing the amount of the depreciation refunded, the
application has been granted with a promptncss
and hbcrality highly crcditablo to the Institutions
The minority of the Committee will barely re-
mark upon these transactions, that being free
from allimputatOn of intentional usury, and never
| having been sanctioned by the Directors of the
mother Bank, but, on the contrary, corrected they
cannot furnish the slightest ground for lcrinr that
the charter has been violated
The second ground ofimputation, noticed by the
! majority OF the Committee, is, 'thc issuing OF
branch orders circulation"
On this point, the minority deem it sufficient to
remark, that Il branch order is nothing more nor
less than draft bill of exchange drawn bv q
branch upon the mother Bank; and that the charter
expressly authorizes as one of the primary opera
tons OF the Bank, the buying and selling of bills
| of exchange. If the Bank has a right TO issue
these drafts at all, it cannot surely be made 4
ground OF just complaint against it, that they are
used as circulation. That is exclusively the affair
OF the community. The Bank cannot be Justly
| choose to make of these drafts. 1t is the high
credit OF the Bank that gives the charactc. of cir
culatIon to this paper; and it is the voluntary act
OF the community receiving it as such.
In TACT, there Is no part of the Bank circulation
which has been so beneficial to the public. 1t has
in practice, furnished the Southern and Western
States with the means of ctfcctng their exchanges
with the North without any expense whatever.
1t may be we'll doubted however, whc her an
extensive and permanent issue of these drafts
might not prove very inconvcmcnt to the Bank IT.
self, III certain state of the domestic exchanges,
and 1T would be, therefore, a udiciOus measure to
sipcrScdc the necessity lii which these drafts orgi
natcd by authorizing other officers than the Pre-.
sdent and Cashier OF the neither Bank to sign
notes for circulation.
| The third ground Of imputaton, as relates to the
violation of the charter, is, s.thc selling of coin,
par'I yularly American coin"
The minority would respectfully suggest that
the majority have entirely overlooked the nature
and essential purposes of the Bank. 1t may be
well defined to be San institution established for
the purpose of dealing i'll money" Now money
is current coin; yet, a Committee of Congress
very gravely bring it forward a charge touching
the violation of its charter, too that it has been
guilty of dealing i'll current coins, and particular
ly, American COINS, the very end for which it was
created.
AS relates dealing in current coin the rrht to
do so is involved i'll the right of lending money and
of receiving it back. The authority 10 deal in bull
lion is expressly granted III the charter, because
right TO deal in it is not necessarily involved i'll the
right of carrying on banking operations.
The fourth ground of imputation is ''thc sale Of
stock, obtained from Government, under special acts
of Congress"
This charge is, if possible more extraordinary
than the last. If the acts of Congress, which OK.
pressy authorized the bank to subscribe for Go.
vcrnment stock, had any meaning ut all, they
certainly meant to authorize the bank to acquire
the right of property iii the stock for which il was
hOriZcd @ subscribe. The to
at pleasure is of the very essence of the rirht o.
property, and is as clearly conveyed to the corpo
ration by the act authorizing subscriptions as The
| right to receive the interest.
| The rgh to sell, therefore, is indisputable
But the majority of the committee seem to sup
pose that the policy which forbids the bank tC
speculate in stocks with its immense resources by
winch the price might be raised and depressed at
pleasure, equally forbade the bank sell the stool
for which it had subscribed by tho express author
ity of the Government. Now il is apparent, tha
tho evil of dealing in stocks, by such an institution
can only exist in of buyjng ami selling stock
! al tie pleasure NJ Tie bdHh. To raise and dcprcs
prices, the bank must have the right both to bu,
and to sell alternately, may suit its purposes o
speculation. Bat 1t has never pretended to claim
much less TO exercise, the right of buying &c
ycrnmcnt stocks except under the EXP rcss author
ity Of Congress, and by an express stipulation will
the Treasury Department. And after it has obtain
cd large amount of Government stocks in thi
mode, IT is difficult to conceive how it could roig
inc price Of these stocks by coming INFO the mar
kot as so!'cr, how il could promote the purpo
Sos oil stock Iobbing speculation, by deprcssjH!
INC price, the only effect which could result from
offering them for sale. When these stocks wer
SOLD IN 1879, there was an extraordinary prcssur
upon the money market Of the whole CONNIE rcia
world thcy constituted the very resource whicl
the bank mcst required III such a n emergency; an
1t IS now matter of history that it was partly b.
the wise, IudlClOuS, and timely use OF this resource
that he Bunk of tho United Statcs nrcrfcd rro,