, 1841-05-22
9l7,194 %
S30I,5JO SO

formed the surplus funds Of
the Institution 1901 $50 SO
from which, it will he recoIlected, 1t was
strongly urged upon the stockholders, as the
main argument in favor of accepting the
charter then offered, that. after making the
most liberal allowance for prnbAblc losses
on the suspended debt and real estate, the en-
tire bonus could be paid, without in the least
degree impairing the capital.
The origin of the cause Of policy, which
has conduced 10 the present situation OF the
affairs of the Institution, dates, however, be-
yond the period of the re-charter by the
State. When il was perceived that the
charter of the late Bank of the United States
would not be renewed nor extended by Con
gresS, the President and Directors comlnen.
ced winding up its c~oncers, and among the
first measures taken to that end, was To sell
or dispose of, as far and as speedily as could
be effected, the assets of its several branch
es. This was generally done 10 State Banks,
who gave for them their Obligations. PAYABLE
by instalment ut distant perions. 1T the
same time, the policy was adopted of con-
veriIng the active debt into loans upOn the
security of stocks, bv which permanent in
~vesiinentS might be provided inr the capital
If the Bank during the long period of It's an
ticipated liquidation. On the 9Th of March,
1885, 1.-THE President submitted To the Board
a general view 0t the situation of the Bank.
it, means and liabilities. It's circulation and
deposits, and the probable future demands
upon it, showing its ample resources and
pnw-rof expansion: whcrcuTon'' the Com.
tnItttpn nj EVDi1D,rA ,,hIrb ,u-c f.A,,r.,Nal
of three Directors, appointed BY the Pre>i.
dent, were authorized 10y the Board "to make
loans on the security of the stock of this
Bank. or other approved security, and il
necessary. ata lower rate than SIX. but not
less than five per cent per annum." This
delegation of power TO the Exchange Con-
mIttcc, was never expressly and formally re-
newrd under the new charter. unless it be
considered rs included under Il general resp
luton al the new Board adopting the BY
laws, Rules. and Regulations" Of the Bank
upon the 81 of March. 1885, the whole u
mount OF loans upon Bank stock, and OIhor
than personal s~erurItv. I.797.956 dollars IS
centS. while by il,at 81 March g.. 1886, these
loans had increased 10 the sum of ~2o.44G.367
dollars SO cents. Under such cIrcumStan.
ces. the active means OF. the Bank were com
pararIvely small, 10 paw the immediate de
mand of the State COR the Bonus. to settle
with the government Of the U. :. for its
stock, and I" meet lis circulation Of 20.Il4.-
227 dollars Sc cents, which contrary To the
anticipation expressed at the period of is
re-chLrtcr. soon began to he rapidly present.
ed for redemption. The Bank was of neccs-
sity driven into the market rs borrowers, and
very soon the first step was taken to obtain
loans abroad, by sending the Cashier TO EI-
rope for that purpose. Two loans were ac-
cordingly negotiated by him; one in Eng.
land, of fl 100000 sterling; and another in
France, Of 100000 francs, on favorable
terms.
In order to provide for the payment of
these loans, and to negotiate others. and in
general to superintend the interest Of the in
s~titution abroad, il was determined by the
Board 10 have Il General Agent. residing in
London, and on the 22nd Of September, Mr..
Samuel Jaudon, then Cashier, was elected
10 that post. and his agency there commen-
ced accordingly November 9, 1897.
At the same time. the Bank entered the
Foreign and Domestic Markets rs borrowers.
upon their Post Notes and Bonds payable in
Europe, the whole amount obtained in this
way at different periods up to July. 1910,
being more than twenty-three millions.
From these causes, as well as from the
general arrangement of affairs, the suspen-
sion of specie payments, and the discredit
Consequently thrown upon American secu-
rites, and more particularly from the course
of the Banks dealing in Foreign Exchange,
by drawing bills to a large amour, without
having previously providedl,he funds for their
payment, and thus subjecting their agent in
London to the necessity of obtaining money
in haste. in orderto maintain the credit of the
Bank, it was no longer found possible to
command funds there upon the same favora-
bic terms as efore. And accordingly upon
Mr.. Jaudons subsequent negotiations for
loans to the amount altogether Of Sl2,212,-
667 as cents, there is chargable to losses the
sum of l,l49,9O7 dollars, 4 cents, being fer
Discounts, Commissions to foreign bankers