Life of James Buchanan, Fifteenth President of the United States. v. 1 (of 2)

by George Ticknor Curtis

And here an incident occurs to me which will be an additional proof how lawless is this bank, whenever obedience to its charter interferes in the least degree with its policy. By the tenth fundamental article of that charter, it is required to “make to the Auditor General monthly returns of its condition, showing the details of its operations according to the forms of the returns the Bank of the United States now makes to the Secretary of the Treasury of the United States, or according to such form as may be established by law.” From no idle curiosity, but from a desire to ascertain, as far as possible, the condition of the banks of the country, and the amount of their circulation, I requested the Auditor General, during the late special session of Congress in September, to send me the return of the bank for that month. In answer, he informed me, under date of the 22d of September, that the bank had not made any return to his office since the 15th of the preceding May. Thus, from the date of the suspension of specie payments until some time after the 22d of September last, how long I do not know, a period during which the public mind was most anxious on the subject, the bank put this provision of its charter at defiance. Whether it thus omitted its duty because at the date of the suspension of specie payments it had less than a million and a half of specie in its vaults, I shall not pretend to determine. If this were the reason, I have no doubt that it sent to the Auditor General all the intermediate monthly returns on the 2d of October, 1837, because at that period it had increased its gold and silver to more than three millions of dollars.

In order to illustrate the enormity of the offence now proposed to be punished, Senators have instituted several comparisons. No case which they have imagined equals the offence as it actually exists. Would it not, says one gentleman, be a flagrant breach of trust for an executor, entrusted with the settlement of his testator’s estate, to reissue, and again put in circulation for his own benefit, the bills of exchange or promissory notes which he had found among the papers of the deceased, and which had been paid and extinguished in his lifetime? I answer, that it would. But, in that case, the imposition upon the community would necessarily be limited, whilst the means of detection would be ample. The same may be observed in regard to the case of the trustee, which has been suggested. What comparison do these cases bear to that of the conduct of the bank? The amount of its reissues of these dead notes of its testator is many millions. Their circulation is coextensive with the Union, and there is no possible means of detection. No man who receives this paper can tell whether it belongs to that class which the new bank originally found dead in its vaults, or to that which it has since redeemed and reissued, in violation of law; or to that which has remained circulating lawfully in the community, and has never been redeemed since the old charter expired. There is no earmark upon these notes. It is impossible to distinguish those which have been illegally reissued from the remainder.

I can imagine but one case which would present any thing like a parallel to the conduct of the bank. In October last, we authorized the issue of $10,000,000 of Treasury notes, and directed that when they were received in payment of the public dues, they should not be reissued, but be canceled. Now, suppose the Secretary of the Treasury had happened to be the president of a bank in this District, and, in that character, had reissued these dead treasury notes, which he ought to have canceled, and again put them into circulation, in violation of the law, then a case would exist which might be compared with that now before the Senate. If such a case should ever occur, would not the Secretary at once be impeached; and is there a Senator upon this floor, who would not pronounce him guilty? The pecuniary injury to the United States might be greater in the supposed than in the actual case; but the degree of moral guilt would be the same.

Whether it be politic to pass this law is a more doubtful question. Judging from past experience, the bank may openly violate its provisions with impunity. It can easily evade them by sending packages of these old notes to the South and Southwest, by its agents, there to be reissued by banks or individuals in its confidence. There is one fact, however, from which I am encouraged to hope that this law may prove effectual. No man on this floor has attempted to justify, or even to palliate, the conduct of the bank. Its best friends have not dared to utter a single word in its defence against this charge. The moral influence of their silence, and the open condemnation of its conduct by some of them, may induce the bank to obey the law.

I now approach the question—do Congress possess the power under the Constitution to pass this bill? In other words, have we power to restrain the trustees of our own bank from reissuing the old notes of that institution which have already been redeemed and ought to be destroyed? Can there be a doubt of the existence of this power? The bare statement of the question seems to me sufficient to remove every difficulty. It is almost too plain for argument. I should be glad if any gentleman would even prove this power to be doubtful. In that event I should refrain from its exercise. I am a State rights man, and in favor of a strict construction of the Constitution. The older I grow, and the more experience I acquire, the more deeply rooted does this doctrine become in my mind. I consider a strict construction of the Constitution necessary not only to the harmony which ought to exist between the Federal and State Governments, but to the perpetuation of the Union. I shall exercise no power which I do not consider clear. I call upon gentlemen, therefore, to break their determined silence upon this subject, and convince me even that the existence of the power is doubtful. If they do, I pledge myself to vote against the passage of the bill.

If this power could only be maintained by some of the arguments advanced by the friends of the bill, in the early part of this discussion, it never should receive my vote. Principles were then avowed scarcely less dangerous and unsound than the principle on which the Senator from Vermont (Mr. Prentiss) insists that the friends of the bill must claim this power. He contends that it does not exist at all, unless it be under that construction of the Constitution advocated by his friend from Massachusetts (Mr. Webster), which would give to Congress power over the whole paper currency of the country under the coining and commercial powers of the Constitution. The Senator from Connecticut (Mr. Niles) was the first in this debate who presented in bold relief the principle on which this bill can securely rest.

Neither shall I dodge this question, as some Senators have done, by taking shelter under the pretext that it is a question for the judiciary to decide, whether the general language of the bill be applicable to the officers of the Bank of the United States under the Pennsylvania charter. We all know that it was intended to embrace them. Indeed, it was their conduct, and that alone, which called this bill into existence. It is true that the provisions of the bill extend to all corporations created by Congress; but it is equally certain, that had it not been intended to apply to the Bank of the United States, it would have been confined in express terms to the District of Columbia, where alone corporations now exist under the authority of Congress. Away with all such subterfuges! I will have none of them.

Suppose, sir, that at any time within the period of two years thus allowed by the charter to the president and directors of the bank to wind up its affairs, these officers, created under your own authority, had attempted to throw thirty millions of dollars of their dead paper again into circulation, would you have had no power to pass a law to prevent and to punish such an atrocious fraud? Would you have been compelled to look on and patiently submit to such a violation of the charter which you had granted? Have you created an institution, and expressly limited its term of existence, which you cannot destroy after that term has expired? This would indeed be a political Hydra which must exist forever, without any Hercules to destroy it. If you possess no power to restrain the circulation of the notes of the old bank, they may continue to circulate forever in defiance of the power which called them into existence. You have created that which you have no power to destroy, although the law which gave it birth limited the term of its existence. Will any Senator contend that during these two years allowed by the charter for winding up the concerns of the bank, we possessed no power to restrain its president and directors from reissuing these old notes? There is no man on this floor bold enough to advance such a doctrine. This point being conceded, the power to pass the present bill follows as a necessary consequence.

If the president and directors of the old bank could not evade our authority, the next question is, whether, by assigning the property of the corporation to a trustee the day before the charter expired, and delivering up to him the old notes which ought to have been canceled, they were able to cut this trustee loose from the obligations which had been imposed upon them by the charter, and from the authority of Congress. Vain and impotent, indeed, would this Government be, if its authority could be set at nought by such a shallow contrivance. No, sir, the fountain cannot ascend beyond its source. The assignee in such a case is not released from any obligation which the assignor assumed by accepting the original charter. In regard to Congress, the trustee stands in the same situation with the president and directors of the old bank. We have the same power to compel him to wind up the concerns of the bank, according to the charter, that we might have exercised against those from whom he accepted the assignment. The question is too plain for argument.

The present case is still stronger than the one which I have presented. It is an assignment by the old Bank of the United States, not to strangers, not to third persons, but to themselves, in the new character conferred upon them by the legislature of Pennsylvania. This new charter expressly incorporates all the stockholders of the old bank, except the United States, so that the individuals composing both corporations were identical. For the purpose of effecting this transfer from themselves to themselves, they got up the machinery of one president and one board of directors for the old bank, and another president and another board of directors for the new bank. What kind of answer, then, would it be to Congress for them to say: True, we accepted a charter under your authority, by which we were bound to reissue none of our old notes after the 3d March, 1836, but we have since assumed a new character; and under our old character, we have transferred the bank which you created, to ourselves in our new character; and we have thus released ourselves from all our old obligations, and you have no constitutional power to enforce them against us? No sir, no sir; we have the power, and it is our duty, to compel the president and directors of the bank, which we established, or their assignees, to close its concerns; and this power will continue until the duty shall be finally accomplished. The one power is a necessary implication from the other. If this duty has not been performed within the two years which we have allowed for its fulfilment, our power depends not upon any such limitation, but upon the fact whether the concerns of the bank have been actually closed. If this were not the case, then all the affairs of the bank left unfinished at the end of these two years would be outlawed. This limitation was intended not to abridge the power of Congress, but to hasten the action of the president and directors in winding up the concerns of the bank. At this very session, and since the two years have expired, Congress has passed an act, without a shadow of opposition from any quarter, giving the president and directors of the old bank authority to prosecute and defend existing suits. I should be glad to see any Senator rise in his place, and make even a plausible argument in opposition to these plain and almost self-evident positions.