The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1841-04-16

that statement showing the condition Of the lnstitu-
ton, after period Of active business extending over
twenty years, and including more than one period 81
serious commercial difficulty, there appeared TO the
credit of Discount, Exchange, and Inter y
est, x42J,SIo ~
Profit and Loss, 3,765,399 d
Contingent Fund, exceeding the Losses !.
chargeable thereto, by the sum of ,456,o Dol ~
Foreign Exchange account S47,oIl "
Fund for extinguishng cost Of Banking :,
Houses, l,lO4, 10 w
Contingent Interest. 44O,s54 IA
ss,ols,7s4 90
These sums, after deducting the amount
of deficiencies and expenses, 2l7,l9 ~
ton, $780, 500 80
from which, it will be recollecteJ it strongly ur-
ged upon the stockholders the main argument IN
favor Of accepting the charter then offered and after
making the most liberal allowance for probable losses
the suspended debt and real estate the entire DO
could be paid without in the least degree impair
ing the capital.
The origin Of the Of policy which has cons
Quoted TO the present situation of the affairs of the In
stution, dates however beyond the period Of the re-
charter by the state. When il perceived that the
charter Of the late Bank of the United States would
not be renewed extended by Congress- the President
and Directors commenced winding up its concerns,
and among the first tax IN to that end,
to sell or dispose Of far and speedily could be
effected the assets Of its several branches This WA
generally done State Banks who gave for them their
obligations payable by instruments at distant period
AT the same time, the policy adopted Of converl'g
the active debt into loans upon the security of stocks
by which permanent investments might be provided
for the capital Of the Bank during the long period Of
its anticipated liquidation On the 9th of March,
1885, " the President submitted TO the Board gener-
al view of the situation of the Bank its and LA
btes, its circulation and depostes and the probable
future demands upon it, showing its ample resources
and power Of expansion: whereupon" the committee
OF Exchange which was composed ofthree Directors,
appointed by the President, were authorized by the
Board to make loans the security of the stock Of
this Bank, other approved security, and if necessa
ry at lower rate than six but not less than five per
cent. per annum."
This delegation of power to the Exchange commit
tee was never expressly and formally renewed under
the charter unless il be considered as included
under general resolution of the Board adopting
"the Bye-Laws, Rules, and Regulations of the for
mer Bank. By the statement of the condition of the
Bank upon the I'd of March, 1885, the whole amount
Of loans upon Bank stock and other than personal
curity 1877 936 dollars So cents while by that
of March 3 1886, these loans had increased TO the
sum of 20, 446, 367 dollars SO cents. Under such cir
cumstances, the active means of the Bank were com
paraveIy small, to pay the immediate demand Of the
State for the Bonus, TO settle with the government of
the United States for its stock and to meet its circulation
of 90 dollars So cents which, contrary to the
anticipation expressed at the period of its recharer
soon began to be rapidly presented for redemption.
borrowers and very soon the first step taken to
obtain loans abroad by sending the Cashier to Europe
for that purpose. Two loans accordingly nego-
tated by him in England of t. 600 900 sterling,
and another in France, Of IL 100000 Francs on ia
vorabc terms.
In order to provide for the payment of these Loans
and to negotiate Others and in general to superntend
the interests of the Institution abroad il deter
mined by the Board to have General Agent residing
in London, and on the 22d of September, Mr. Samuel
Jaudon, then Cashier, elected to that post and
his agency there commenced accordingly November
8, 1887.
AT the same time, the Bank entered the Foreign
and Domestic Markets. as 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, well from the general de-
rangement of affairs the suspension of specie pay
American securities, and more particularly from the
course Of the Danks dealing in Foreign Exchange by
drawing bills 10 large amount without having pre-
viously provided the funds for their payment and
thus subjecting their agent in London to the nccess
ty of Obtaining money in haste, in order to maintain
the credit of the Bank, il no longer found posi-
bile to command funds there upon the same favorable
terms as before, And accordingly, upon Mr.. Jaudons
subsequent negotiations for Loans, to the amount al
together of $i2 G97 AZ cents there is chargeabe
to Losses the of l49 907 dollars, cents, being
for Discount, Commissions to Foreign Bankers, and
other charges; not including Mr.. Jaudons COM
missions, and the expenses Of the Agency in London
amounting up to January J. 1S4l, to the sum of 3d.
3i4 pounds II shillings pence sterling, which at
nine pei cent exchange is equal to 1886 1877 dollars 80
cents.
1t may be proper to explain in passing how this
large for the expenses of the Agency at London
arises. When Mr.. Jaudon elected to the place of
foreign agent, he was the principal cashier at salary
Of 1000 dollars per annum. The bank paid the loss
the sale of his furniture 5074 dollars and the pas
sage of himself and family to london, further sum
of l0l5 dollars. He was to devote himself exclusively
Ia the business of the Bank to negotiate uncover
cd edit in England to provide for the then existing
debt in Europe to receive its funds, to pay its bills and
dividends to effect sales of stocks and generally to
protect the interests of the Bank and the country at
large For these services he was to receive the
mission heretofore charged and allowed to Barring,
Brothers & Company, equal to about $4,000 dollars
per annum. In addition to which, the expenses of
the agency allowed him, including salary Of
1000 pounds sterling TO his brother, Mr.. Charles B
Jaudon, his principal clerk. From the increase of
money operations arising from facilities afforded by
the agency, the amount upon which commissions were
charged greatly augmented so that the sums paid
him for his ordinary services up to January, 1871
amounted at nine per cent exchange to It's 0if dollars
AZ cents, and the expenses of the agency to 80 l66
dollars 80 cents.
In addition TO these sums, he was allowed by the
Exchange Committee an extra commission of one per
cent upon loan effected in October, 1889 of S000 600
pounds, say 1873, 755 ST. and upon his claim for ST.
miar commission, upon subsequent loans in France
and Holland, to the amount of Is l4l 30, tho
board Of directors under the sanction of legal OPT
Mon, from counsel of high standing and the views Of
the former President, by whom the agreement with
Mr. Jaudon made, that the case Of extraordinary
loans was not anticipated nor meant to be included IN
the original arrangement, allowed the further charge
of $S3970 81 These several sums amount to 1885,
937 80, as before stated
Such some of the results of the resolution of
March, 1885, though it cannot he questioned, that
much may be fairly attributed to the unhappy situa
ton of the business and exchanges of the country
concurring with the unfortunate policy pursued by
the administration of the Bank. Thus the lnstiu
ton has gone to increase its Indebtedness abroad
until il has now more money borrowed in Europe,
than its has on loan its list Of Active Debt in Anne