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indiscretion on the part of the directors. This, it is not only our duty but our desire to prevent, if possible; and therefore, with some little inconvenience to ourselves, we have made arrangements to pay the note of $15,000 in the course of a few days."
a The evidence of the President of the bank explains the character of these various loans, and the circumstances which induced him to be satisfied with the security, and to make these advances; which, together with all the testimony and correspondence on this subject, will be found in the papers marked No. 9.
In that evidence, it is stated, by the testimony of Webb and Noah, that they knew nothing of the first 15,000 dollar loan made by the President of the bank to Burrows; that Burrows made them believe the $15,000 were loaned to Noah by his father, and that he had his father present to carry on that transaction, and for which loan Noah allowed Burrows. 2 per cent., and did not receive it all for some months after giving his notes; that the notes were discounted by the bank, in their names, without their knowledge, and paid off in the same way. It will appear by the testimony of Mr. Webb, that the paper of which he is the editor, made two publications in the latter part of 1829, favorable to the establishment of branches; that, shortly thereafter, it commenced its opposition to the bank, and was, for sixteen months, warmly opposed to it; and that, on or about the Sth of April, 1831, it changed its course in favor of the bank. Connected with this fact, is an admission, on the part of one of the editors, that, before the first loan was negotiated, he held a conversation with a gentleman through whom the loan was then negotiating, (who the committee know to be Burrows) in which he, Burrows, urged the editors (one of whom, Webb, had expressed himself in favor of a modified re-charter) to advocate an unconditional renewal, “ but expressed great satisfaction at learning that (one) was in favor of a charter under any circumstances."
The committee will state they were anxious to obtain the testimony of Burrows, but were unable to do it. A subpæna was issued for him, and sent to New York, to which the marshal returned he was not to be found. It was then sent to Washington city, and the sergeant-at arms made the same return. The marshal of Pennsylvania was directed, by the chairman, to make and continue a search for the witness in Philadelphia, having heard of his expected arrival in that place; that the marshal reported to the chairman that he ascertained that the witness had arrived in that place on Thursday, the 5th instant, but he was not able to serve the process, because he could not be found.
To an inquiry whether there were any other instances of notes being dis. counted for the accommodation of any merchant and trader, at 1, 2, 3, 4, and 5 years' credit, unless to secure a debt in jeopardy, there was presented to the committee four other cases.
On the 3d of April, the committee, by resolution, called for the follow. ing statements to assist them in the elucidation of certain facts which had appeared in other documents, viz.
1st. A tabular statement showing the aggregate amount of notes discounted and still due the bank, drawn and endorsed by non-residents of Philadelphia; which will be found marked A.
2d. The aggregate amount of good notes offered for discount, and rejected by the board; drawn and endorsed by residents of Philadelphia, on the following days, respectively; 9th of August; 16th December, 1831; 2d January; 10th February; 2d and 14th of March, 1832; 24th September, and 15th October, 1830. The statement marked B, will show the amount of notes discounted; but the officers of the bank state their inability to discriminate between those that are good or otherwise.
3d. The aggregate amount of notes dicounted on personal security, and made payable more than six months after date, which appear to be only four in number, besides the case of J. W. Webb and M. M. Noah.
4th. The aggregate of notes now due the bank, discounted for a firm, or the partners of a firm, without the name of some person not belonging to the firm as drawer or endorser, distinguishing in each of the above state. ments the amount loaned to members of Congress, editors of newspapers, or persons holding offices under the General Government. To this last resolution were added the following amendments, viz. “Ist. A statement of the loans made by the bank and its branches to members of Congress, editors of newspapers, and officers of the General Government, and the terms of such loans."; 662d. And the names and amounts of payments to mem bers of Congress, in anticipation of their pay as members before the passage of the general appropriation bill." "3d. And the amount of money due the United States, and on deposite in the bank, after deducting therefrom the sum thus advanced to those to whom the United States are indebted.” “And, lastly, a statement in detail of the amounts paid to those who are now, or have been members of Congress or officers of Government, since 1816, for services rendered to the bank, stating the nature of the service.' For the information sought by these inquiries, see papers marked C. sides these, there were furnished the statements of loạns made to five editors or publishers of newspapers; by which it will appear that the accommodations to those five editors were upwards of $110,000 previous to the insti. tution of this inquiry.
The various reports which have, for a long period past, charged the bank with too frequent intercourse with brokers, and also of undue favoritism to certain individuals, as well as the large transactions which exhibited themselves upon many documents called for by the committee, induced them to examine particularly the accounts of the firms of which Mr. Thomas Biddle was, and is, the chief partner with the bank, as a broker.
Four subjects of investigation presented themselves in relation to their transactions with the bank.
1st. The allowing and paying interest to them on deposites.
2d. Relates to certain loans upon the pledge of stock, and the discounting of notes made to T. Biddle by the President or others, without the knowledge of the board, and, on part of them, the pledge of stock, without interest. The committee would refer, for the particulars of these two charges, to the papers marked No. 13.
"The third subject is the amount of discounts made T. Biddle, and the rate of interest. The document marked No. 14 will show the amount on the 15th of each month, from the 15th day of September, 1830, to the 15th of February, 1832. By this it appears sthat, on the 15th of October, 1830, he was discounter upwards of $1,120,000, and has, at no time since, been less than $400,000. The committee doubt the policy of such large-accommodations to individuals or firms, at any time, as it deprives the bank of the power of fulfilling one of the great objects of its institution, which is to facilitate trade by loans in time of pressure, and it may be proper to add that these large loans, at a low rate of interest, in times when money is plenty, are usually followed by over trading, which produces pecuniary embarrassment and general distress.
By a statement, entitled “ Remittances to Europe,' 'marked No. 16, it appears that the following purchases of foreign bills were made of Thomas Biddle and Co., drawn by them, viz.
1831. Oct. 14, 1 bill at 60 days sight, and at a premium of 10% per cts. $32,399 68 “ 14, 3“ 75 to 90, and 105 days,
115,411 11 " 22, 13“ 40 to 125
592,000 00 Dec. 10, 9 40 to 110
506,250 00 1832. Feb. 14, 14“ 40 to 105
400,000 00 “ 14,3" 50 to 70
By the foregoing statement, it appears that the bank purchased, between the 14th of October, 1831, and the 14th February, 1832, of T. Biddle and Co. foreign bills to the amount of $1,794,060 79.
With regard to these large loans, the committee refer to the statement marked No. 19, by which it appears that, on the 9th of April, 1832, the total amount of discounts on bills and notes at the bank in Philadelphia, was $7,939,679 52. Of that sum, more than two-thirds were loaned to ninetynine persons, to wit, $5,434,111. More than $3,000,000 were in the hands of twenty-seven individuals; and nearly one-seventeenth part in the hands of one person. The committee have already expressed their conviction that these large accommodations, to a few individuals, are injurious to trade generally, and they will add that they ought always to be made by either the board of directors, or the committees empowered by them for that purpose. For an explanation of this subject, see papers numbered 13 and 18.
Properly connected with this subject, is the accommodation extended by the bank to individuals on the pledge of stock. In all the monthly statements of the condition of the bank, prior to the first of March last, there was no column showing these loans." In that month, for the first time, so far as the committee can discover, a new column is exhibited, entitled “ loans on other stocks," and which appeared, at that time, to have been transferred from the line called “ bills discounted on personal security.” This change was made in consequence of a call for stock loans, by the House of Representatives. A statement of the same was called for, marked No. 20, which exhibits a list of stocks pledged, consisting of Theatre shares, Museum stock, Arcade stock, Railroad and Canal stocks, Coal Company stock, Real Estate in Louisiana, &c. &c., amounting to the sum of $1,713,297 34.
The various transactions, in specie, by the bank, has been a subject of special notice by the committee, and various statements called for, show the magnitude of them.
The first statement, marked No. 21, shows the amount of specie exported by the Bank of the United States during the year 1831: To London, in Mexican coin,
$255,000 00 To Paris, do do
2d. The amount of specie exported since 1819, will be found in the
statement marked No. 22. To England,
2,598,357 00 To France,
$4,855, 755 50
of this amount there was, in gold,
596,717 00 1,871,111 00
3d. The amount purchased since 1824, marked No. 23, shows: Of silver,
605,850 00 gold coin,
17,596 00 gold bullion,
4th. The amount of specie sold since 1817, marked No.
24, shows it to be
Of which there was, American gold,
84,734 44 British, French and Spanish, 48,291 35 Silver,
5th. The amount of specie drawn from each of the southern
and western offices, since 1820, to the Bank of the
- $22,523,387 94
Of which $20,925,990 07 has been drawn to those places since the 1st of January, 1823,
- $20,925,990 07
6th. The amount of specie (in the same statement) sent to
the southern and western branches, since 1819, is
The premium received on the specie sold, is
97,140 56 19,171 85
What profits were made on the specie exported, the committee did not call for documents to enable them to ascertain. It must, however, from the great quantity sent away, have been considerable.
The committee called for a statement of all the specie imported by the bank from abroad, since 1919; but, as none was returned, they presume none was imported.
What proportion of the gold exported was American coin, the committee have not before them the means to determine; it was expected to have been given in the statements, but, in looking into them, the gold exported is without a designatory name : it is believed, however, the amount is considerable.
In examining this subject minutely, the committee find that large amounts of the specie have been drawn from the office at New Orleans. Of this there can be no complaint; it is the principal depot for returns of goods shipped to Mexico, which are almost exclusively paid for in specie, and it cannot be expected that it will remain there. But the committee suggest whether the withdrawal of the specie from most of the other ports of the country, and substituting paper in its stead, might not be highly injurious to those sections of country subject to its operation.
The subject of the bank's furnishing bills of exchange for the trade of India, China, and South America, has been brought to the attention of the committee by document marked No. 26 ; and having been so strongly described as affording great advantages to the country, in the triennial report of September last, as “economizing” the specie of the country; the committee have felt it a duty to examine and present the subject to the consideration of Congress and the commercial community, believing, as they do, that there is something delusive in the operation. The result of their examination has led them to the conviction that this new method of dealing in bills of exchange, does not "economize" the specie of the country at all. It is a universal law of drawing, that funds must either go before or follow after the draft to honor it at maturity; and whether it goes directly or circuitously, the funds to discharge it must sooner or later arrive at the place of payment. These bills are to be paid in England; but they go round the Cape of Good Hope before they reach their place of destination. Instead, therefore, of sending the specie directly to India and China, as formerly, who does not perceive that it must now be sent to England, the country upon which these bills are drawn, there to meet them upon their arrival at the place where they are to be paid ?. The bank consequently becomes the shipper of the specie, to pay its bills, in place of the merchant, to purchase his merchandise in the East Indies. It is simply and purely nothing but a change of the destination of the specie, with only the advantage of its going to London.
The mode in which these bills are drawn and disposed of to the purchasers, having twelve months to run, as will be seen by a copy of the obligation taken by the bank, marked No. 27, the committee consider of doubtful utility to the country. The legitimate object of banks, the committee believe to be, granting facilities, not loaning capital. The supplying of bills appears even much more objectionable than loaning capital, for it encourages an operation which commences and ends without the employment of any capital whatever, and is similar in their character to respondentia securities. The buyer is enabled, within the term of credit, to make the voyage, dispose of his goods, and obtain from the proceeds the funds to meet his obligation, and the bank to transmit the same to the place upon which their bills are drawn, (which are at six months sight,) long before they become due. It would seem to produce a greater export of specie, eventually, than would otherwise take place, if the operations were commenced with specie and not with bills purchased in the manner described; for the merchant, relying upon his immediate re