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sources, would not engage to such an extent in the business, and would combine in the operation much of the produce of the country, whereas relying upon an extensive credit, he hazards every thing on the success of the enterprise. It is a species of speculation in trade, leading to great risks, and certainly terminating in overtrading-the evils of which the country is now sorely experiencing. By loans of a similar character by insurance companies, providing funds for traders to China, Government has sustained more loss than in any other branches of trade.

The increase of the number of branches established since 1823, cannot be passed over in silence by the committee, and deserves, as a source of extended influence of the bank, the most serious consideration.

In some few instances, where new branches have been established, perhaps they may have been called for by the community, and may have been useful to them and profitable to the bank, but, in most of the cases, the committee doubt whether they were called for from public utility, and their establishment will, in the end, not only prove unprofitable to the bank, but very injurious to the communities among which they are located. Mr. Cheves, in a letter of the 27th of May, 1819, to Mr. Crawford, then Secretary of the Treasury, says: I am perfectly satisfied that, with the present organization of the bank, it can never be managed well. We have too many branches, and the directors are frequently governed by individual and local interests and feelings. For a time, we must bear with the branches, but I hope they will be reduced."

Again, in the same letter, he observes: "the real and original evil under which the country is suffering is over-banking. This leads to excess in trading, manufacturing, building, and speculating, and the history of the illjudged enterprises which have been undertaken in these several concerns, would give a full history of all the distresses of this country, excepting a little agricultural distress growing out of the inordinate expectations which the others excited." These opinions fully accord with the views of the committee, and they consider them as peculiarly applicable to the present -time, as exhibiting similar causes now operating with more extended force from which similar effects must follow, augmented in proportion to the increase of branches.

The stockholders, at the triennial meeting on the 1st of October, 1822, recommended a withdrawal of some of the branches then existing, in these words, "In taking into view the business of the bank, as connected with its different offices, the committee think it right to recommend to the continued attention of the President and directors, the necessity of withdrawing those branches which are found to be unprofitable, and transferring their funds to other offices which shall seem to require additional capital." Since this period two have been discontinued, and nine others have been established, as per triennial report of 1831. These opinions of Mr. Cheves, in which the committee have concurred, were approved by the stockholders, as will appear by the following extract from their same report in 1822. They say, "they take great pleasure in unanimously declaring that the circumstances of the bank fully realize their anticipations as expressed at their last meeting in regard to the President, (Mr. Gheves,) who, by his talents, disinterestedness, and assiduity, has placed its affairs in an attitude so safe and prosperous, as that the burthen of duty devolving upon his successor will be comparatively light."

The committee cannot but think that, had the succeeding direction of the

bank been guided more by the opinions and wishes of the stockholders, as their expressed, and gone on gradually growing with the growth, and increasing with the natural wants of the country, great sufferings to the community would have been avoided,

In the year 1819, great abuses existed in the branches, of which Mr. Cheves speaks, without reserve, in his last report to the stockholders, as well as in his correspondence with Mr. Crawford; and, upon casting the eye over the monthly statements, it is remarkable to observe what losses have taken place at the branches compared with the mother bank. For instance, on the 1st of January last, the loss of the mother bank, on a capital of sixteen millions and a half, was, in round numbers, $328,000; that of the Baltimore branch was $1,662,000, on a capital of one million and a half, so that it lost more than its capital; that of the Norfolk branch was $229,000, on a capital of 500,000, losing nearly one half its capital; and so with all the rest of the branches, their losses are out of all proportion to their capital, and ten times greater than the mother bank, according to the amount of their respective capitals. These losses, however, were principally incurred prior to 1819. The proper inference to be drawn from these facts, is, that the worst of mismanagement has existed in the branches.

The "Contingent Fund" has claimed the attention of the committee. The object for which it was originally created, and the original amount provided, together with the additional appropriations which have been made to it, and the manner in which the same have been applied at different periods, will all be explained in the following documents.

The report of the board of directors, in July, 1821, published in the gazettes at that time, marked No. 28; the report of the stockholders at the triennial meeting in October, 1822; the report of the Dividend Committee, on the 16th January, 1823, marked No. 29; a statement of the particulars of the debts "considered lost," marked No. 30; a statement of the suspended debt and real estate, with the probable loss thereon, marked No 31; the statement headed "Contingent Fund," marked No. 32; the sales of the forfeited bank stock, marked No. 33; and the dividend reports for July, 1829, January and July, 1830, January and July, 1831, marked No. 34. To these the committee refer for the particulars of the subjects to which they relate, in connexion with the "Contingent Fund."

The committee feel it their duty now to give their views as to the causes of the present distress in the trading community, and which they fear may greatly increase. It is an acknowledged principle that LIKE CAUSES IN ALL CASES, PRODUCE LIKE EFFECTS; and as, in 1819, contraction followed the expansion of 1817 and 1818, so, by the same rule, must contraction follow the immense expansion of 1830 and 1831, and like effects and consequences succeed. To illustrate more clearly the position, and bring it home to the mind of every one, the following table of the state of the bank during some of the months of 1818 and 19, and 1831 and 1832, are here exhibited, embracing the items from which direct calls upon the vaults proceed, and the immediate means which remain to meet them, viz. The first, are, the deposites, circulation and debts abroad, not on permanent loan. The second, the specie, funded debt, and notes of other banks. The amount of each will be found under their proper heads, at the various periods mentioned.

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The preceding table shows that, at no period in 1819, when the bank was very near suspending payment, was it less able to extend relief to a suffering community as at the present moment. In April of that year, the month in which its difficulties were the greatest, its means of specie, notes of other banks, and funded debt (which could have been turned into specie or notes of other banks) amounted to upwards of ten millions of dollars; and the whole demands, which could come against it in the same month, of circulation, deposites, and debts owing abroad, amounted only to about fourteen millions. But the committee feel bound, in candor to state, that this was after a number of months of constant contraction, not only by the Bank of the United States, but also by most of the other banking institutions of the country, where a general exhaustion had been produced. It was on the 6th April, 1819, that Mr. Crawford, then Secretary of the Treasury, writes to Mr. Cheves thus: "It is even doubtful whether it is practicable, with all the exertions which it is in your power to make, to continue specie payments through the year." Under the same date, he says, "My impression is, that the safety of the bank can only be effected by withdrawing nearly the whole of its paper in circulation. If the bank does this, all other solvent banks will be compelled to do the same. When this is effected, gold and silver will be introduced into the country, and make a substantial part of the circulation, and enable the banking institutions gradually to resume their accustomed operations. Whilst this is effecting, the community, in all its relations, will be greatly distressed. Considering the extent of the suffering, it is greatly to be desired that some good may result from it."

The committee believe that the course of operations by the bank, during the years 1830 and 1831, have been nearly of a similar character to those of the years 1817 and 1818. Drafts and notes, payable at distant offices, were then freely discounted at the Bank of the United States, and the different offices. Bank notes were issued by the bank without regard to the wants of the community, or the effect upon the circulating medium, which became depreciated, driving the precious metals from the country; and, until the reaction had operated to check them, led to extravagant speculations, which ended in ruin; and relief was not obtained until the circulation of the Bank of the United States had been reduced to about 4,000,000 of dollars. Before this was accomplished, the expedient was resorted to of curtailing loans; and, while they were doing that, they continued the issue of bank notes, thereby continuing the evil which they were striving to avert. What is the state of the Bank now?

On the 1st of March, (see monthly statement marked No. 35,) the bank had $6,800,000 specie, $2,840,000 notes of other banks, and of funded debt none!! making an aggregate of $9,640,000 to meet its circulation of $23,717,000, deposites $17,050,000, and foreign debts owing $1,876,000, making an aggregate of $42,643,000; and this evil exists while a reaction or contraction is operating to a considerable extent.

This contraction commenced on the 7th of October last, and is evidenced by the following circular, which indicates, beyond all doubt, that the bank had over traded.

CIRCULAR.

BANK UNITED STATES,

October 7, 1831.

SIR: The unusually heavy reimbursement of six millions of funded debt, which was, on the 1st instant, advertised by the Government to take place on the 1st and 2d days of January next; but which, according to a subsequent notice from the Treasury Department, under yesterday's date, may, it appears, be demanded of the bank, by the public creditors, at any period of the present quarter, is calculated to press very inconveniently upon the par. ent bank, and upon the office at New York; the more so, from our uncertainty as to the time when the necessary provision must be made, and from the prevailing active demand for money. Be pleased, therefore, so to shape your business immediately, as that, without denying reasonable accommodation to your own customers, or sacrificing the interest of your office, you may throw, as early as possible, a large amount of available means into our hands in Philadelphia and New York, and, at the same time, abstain, as far as prac ticable, from drawing upon either of those points; checks and short drafts on the local banks, and on individuals, will prove particularly acceptable for several months to come, and whenever direct claims of that kind, on those two places are not to be procured, you might materially aid us by taking drafts upon the large cities nearest to them.

I am, respectfully,

Your obedient servant,

W. McILVAINE, Cashier.

Addressed to the CASHIERS of all the offices.

Since the 1st of September last, the bank has diminished its means to meet the demands which may come upon it

First. The whole of the funded debt which it then held $3,497,681 06: Second. The difference between the specie it then held $11,545,116 51 And the amount it possessed on the 1st April

6,799,753 63

4,745,362 SS

The

Making an aggregate diminution of its means to meet its momentary demands, since the 1st of September, of $8,243,043 94, while, during the same period, those demands have increased $4,197,871 51, viz. the circulation, deposites, and foreign debt, the aggregate of which, was, on the 1st of September, $38,452,758 67, and on the 1st April $42,650,630 18. The measures and the effect appear to be similar to those preceding 1819. extensive discounting of domestic bills and drafts, payable at distant branches, the amount being, on the 1st of April, per monthly statement, $20,354,748 79. The orders for curtailing at all the western branches, and the curtailing at the principal offices in the Atlantic cities, and at the Bank of the United States, the amount of which, at the Bank of the United States, between the 5th day of January and the 29th day of March, is $1,810,408 37; at the office of New York, between the 4th day of January and the 28th day of March, is $259,305 43; at the office of Boston, between the 5th day of January and the 29th day of March, is $167,860 85; (and that, too, on a discount line of less than two and a half million of dollars;) at the office of Baltimore, between the 16th of January and the 2d day

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