Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1832-05-22
Tsvcmty-seeoaad Congrcss.--Sess. 4.
UNITED STATES BANK.

United States, submitted the following as the views Of
the minority Of the said COMMITTEES:
The minority of the committee appointed TO examine
me books and proceedings OF the Bank Of the u. States
dissenting from the report the majority beg leave pre-
House.
The majority ofhe committee have submitted without
expressing any decided opinion them, six which
thcy aege to have become subjects OF mputaon against
the bank. touching the violation OF lis charter
The first OF these relates to usuous loans and
occurred far beck as 1922 during the presidency of Mr.
CheVes The Branch Bank OF Lexington had received
large amount Of the notes OF the Bank OF Kentucky por-
ton OF them AZ Government dcpocs. Tb,Se noes were
considerably depreciatcd1ho branch having declined
issuing any ot own notes, in obedience TO orders of the
mother bank! an individual applied for loan these de-
pr2ciatcd bank notes, alleging that he wanted them pay
debt ana tathey would answer his purpose well
any other bills. The loan granted. The Bank OF
Kentucky at the time regularly paving the branch
interest these notes, and finally redeemed all that re-
NAMED, few months after the loan in question 1t Inns
appears that these bills good cash the bank
ana the borrower alleged that they were equal value 10
HIM lt'dicult TO conceive any solid ground for con-
siderng This case OF usuy 1t would he reasonable to
say btit would have been usry, for the Bank of Ken
lucky itself, to make loan OF its deprecated
ne utmost fairness was exhibited by the branch bank in
this transaction the loan made with reluctance after
repeated applications and yet the directors oil the mother
bank many years afterwards and since Mr. Riddle hos
been the head OF the institution refunded to the bor.
rover oil the Kentucky notes, the ull of tho diff
terence between their nominal and their real value at the
ne OF the loan, with interest. This has been also done
' ''on'r similar case; so That in the only two
which have been brought the view of the directors NJ
rhadepma Tor the purpose OF having the OF the
depreciation refunded, the application has granted
with Promptncss and liberaly highly crcditable to the
institution
The minority of the Committee will barely remark ~,
on thesc Transactions that being free from all mpuaions
OF intentional usuy and never having been sanctioned h.,
the Directors OF the mother Bank but on the contrary cor
rccted they cannot furnish the slightest ground for oeg
ing That the charter has been violated
ne second ground oil impuaton noticed by the MAORI
circulation"
On this point, the minority deem it sufficient 10 remark
at branch order nothing less than draft or
o o, exchange drawn by branch upon the mother banks
ana that the charter expressly authorizes as one of the
primary operations OF the bank the buying and selling of
1s oil exchange Ii the bank has right 10 issue these
drafts at ALL it cannot, surely, be made ground of ms,
complaint against 1t, that they used as circulation;
ina" is exclusively the affair of the community The
"hK cannot be justly made responsible for the use which
e puDhc may choose TO make of these drafts Ii is the
nigh credit the bank that gives the character of crcu
ao 10 hl paper and it is the voluntary act of the COM
munity receiving il such.
In fact, there il part of the bank which has bcor ca
oehehci TO the public 1t has, in practice furnished the
southern and western States with The means of eectin
whatever. 10y "fo'
1t may be well doubted however. whether an ox,en-
slFe and permanent issue othcsc drafts might not prove
very announcement TO the bank itself in certain state offbc
domestic exchanges, and would be therefore ucious
measure TO 'npcrsedc the necessity ia which these drafts
,fGinned, by authorizing other officers thon Inc pcsi
"e ana cashier OF the mother bank To sign notes for cir
culation. % ~ 'o' CIT
The third ground orimpuation, as relates to te viola
American COIN " ' 10y
The minority would resp .ctfuly suggest, ,ha. the ma
IoF'y nave entirely overlooked the nature and essential
purposes oil me bank may he well defined TO be can
institution established for the purpose ofdean in ,nonc,
no" money is current coin; yet a committee of Can
grCss very gravcy bring 10, ward as charge ,o,;
INC violation OF It's charter too that it has been Guilty II
ue"hg /" current coins, and particularly American coins
The very end for which it was created
As relates 10 dealing in current coin the rioh, 70 do On
IL involved in Tie right Of lending money and r
IL back The authority deal in bnIlon j. IL,
RI"en IN me charter because bullion is not current coin
NM Oh course me right TO deal in it is necessarily in
VOWED IN the right of carrying banking operations
ne fourth ground OF impuldon is CHE sale of stool,
oo'hnsH from Government, under special acts Of Con-
rms charge is, if possible, more extraordinary than
me ia' II the acts of Congress- which expressly an
lo'seu inc paN to subscribe for Government stock had
any meaning al an they certainly TO authorize the
bank 10 acquire the right OF property in the stock for
winch was authorized TO subscribe The right TO soil
TINS stock at pleasure is OF the very essence of bc iobt
oi property, and is clearly conveyed to the
ny ue act authorizing subscription tie right to receive
The right to sell, therefore, is indisputabe.
But the majority Of the committee seem to suppose that
INC Pohcy winch iorbids tie bank speculate in stocks
WIN Us Immense resources by which tho price might he
raised ana depressed at pleasure, equally forbade The
bank TO sell the stock for which il had subscribed h, ti
express authority OF the Government Now if il anna,
r9nt, that the evil OF dealing i'm stocks bv s,,ch Al, i
tuition only exist i'm cases Of J,g,;yg ,,J cU;
at the pleasure IF The EGak 10 raise and denrcss
prices the bank must have the right both to buy and TO
p"' has never pretended to claim, much less TO ycr-
else the right OF buying Government stocks excent IN
deF e express authority OF Congress- and by an pross
stipulation with Tie Treasury Department. And aGcr IL
mas obtained large amount of Cove nmcnt stocks i'm is
mo'c' 'diHlcult TO conceive how it could r0iae Tho
price hose stocks by coming into the market as sell
it''OT now u could promote tic purpose of sork -io
bns speculation by depressing the price the onIy cc
lect winch could result from Offering for sale When
'"e'e sOckS were sold IN 1925 there an cXaolinv
pressure upon The money market of the whole CONNER
cM world lhey constituted the very resource which
VIC o"N most required IN such an emergency; aud il now
"''cr history, hat II was partly by c wise udcioi,s
and timely use Of dis resource that the bank Of be n
STATES aVecd from this country the calamity Of general
i'urc OF Oe banks and widely extended scene Of COM
mercial bankruptcy.
The majority Of The committee seems 10 regard II ,s q
maueroi complaint, That tie Government permitted the
b'nk to subscribe for these stocks i'm II, od
duaIt II this Is, indeed Just cause Of complaint il
.'ou 90 made against the Government and not against
'ne O'hk' when Congress expressly authorizes the Sec
fc''Iy OF the Treasury 10 obtain loan from the bank and
ne secretary shpuates the terms OF that Loan il is inpos
,'o'G 70 conceive how any blame be imputed to the
o'ilN' ~ " ihthiully performs lis ennaecmcnts
Hue mn ground Of ippudton prescnlcIn the repor n
other objects" ' ''''''' OH"
10 Two Instances, the directors subscribed small sums r.,
certain internal improvements in tho vicinity Of the real
estate OF inc BANK This they did in the exercise Of their
proprietary right, and with view 10 the Improvement of
the value Of their property For dis exercisc Of noe,
hey arc responsible to the stockholders alone: and th
quc'ohls whether they have have not made propsr am
Pc'Ion OF the funds Of tie corporation with vie,y In
INC promotion Of It's interests TO what extent the value
o inc real estate Of The bank has been increased v tf
internal improvements in question: has no, been
ed; but II may be well supposed that h exrce,is d. 60
appropriated by the directors 70, snd n ;ho construction Of
these improvements.