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REPORT.
f the amect Committee to -whom-was referred
MS AddrSs of JVinian Ed-wards.
£ Concluded .]
’HH 0F ,u f’ BKBEV ?ATIVF.S, MAT 25.
the general nature of the ar
.MMfflftV.s as they were adopted and en
rejmSm with the banks. There were,
IHH&variatibn in some other particulars,
i the barnk of Steubenville, for instance, the
iniic money irsthe bank, or due from it at
>e time|bf ihe arrangement, was declared
it to fanwitliin the arrangement: in other
stanffifcnothing is said of such balances: and
iWjjjjfme embraced by be the agreement.
|HBHllowing table shows the amount of
tMHlanent deposite allowed to each
jjHHfpectively, as the equivalent tor the
MHH§Tendered, or expected to be ren
it to the Treasury.
MBBBChillicotiie 100,000
Bank of Columbus ’ 20,000
and Mechanics’ Bank ofln-
U 40,000 i
jpi'ttlllinois at Sliawneetown 50,000 I
w&eifßank of Kentucky at Louis
ville 100,000 [
at Stephen’s 100,000
(mHb and Merchants’ Bank of
M i ssouri 150,000
Vincennes 75,000
Edwardsville 40,000
tnAws and Mechanics Bank of
HHtcinati 100,000
of these permanent deposites
hundred thousand dollars the in
which sum, at six per cent would
gHp four thousand dollars.
|ip|||lledged in the memorial that the sum
i[jm?fbur tliousand dollars was thus annually
HH receiving and transmitting the pub-
a service which, it is said, the
■Hf the United States was bound to per
jH@Sthout any compensation. The com-
HHdoes not seethe ground of this obii-
the Bank of the United States. —
BMjnstitution is indeed bound to give ne
sH§ faeilties for transferring the public
HKfrom place to place, but this can only
funds; and it is bound, also, to re
ivHnoney in deposite for the United
but it is not bound to receive in
He, as cash the bills of any banks what
|3Eut its own, although they may come
provisions of the resolution of
ilbß The committee does not perceive
in the principle of these arrange-
HKvith the bank, either in violation of
contrary to the usage of the Govern
■lUince the Treasury has, for many years,
with more or less of the
u.kHv which the public moneys were
‘pHted in such banks, and drawn from
wanted: certain terms and con
‘kH> as to the mode of drawing, being
ipHted, such as were thought beneficial,
:lß> the Treasury and the banks. In
’?flt may be proper to observe here, that
- Hs to have been assumed, by different
fiHn at the head of the Treasury Depart
jHfthat it was their duty to direct its
Hpons to the support of different mo
gfhp institutions whenever their affairs re
tired } support, so as to defeat combina
)nK against them, and preserve an equili
■HKf credit among them. And the prac
rPbpearsto be in conformity with this
uHlefrom a very early day. That ben
uKy occasionally result, and lias resul
'kH>m such operations, is evident: but
tsKio legal employment of public funds.
iHbthing but a gratuitous loan. The
of the practice, however, as well
i avowal of the principle by different
B&jb. at the head of the i'reasury, will be
BHby referring to a letter from the Se
'eß of the I'reasury to the President of
t Hnate, of the 25th February, 1823, in
isHr to a resolution of that body. Such,
was not either the object, or the
of the agrements with the state
;9L which are the subjects of this examin
ißthe Ist of August, 1820, the Treasury
siR c ' rcu ' ar instructions to the Recei
:iH>fPublic Moneys, authorizing them to
in addition to specie and bdls of the
ggg|pf the United States and its branches,
H§of the incorporated banks in Boston,
IlH’ork, Philadelphia, Baltimore, and
pP|iond, and ip the states of South Caroli-
Georgia, (except the City Bank of
||jg|hore,) and of those specie paying banks
■&§ state in which the Land Office is sit
■gt. “This instruction,” it is added, “su-
Hftdes those which have heretofore been
Hon the subject, except in so far as
the receipt of the paper of
which does not discharge its notes,
in specie: and that prohibition
■K in every case, be rigidly adherred to.
Hong the banks with which these ne-
Htions were made, the attention of the
Hiittee was called, particularly, to the
Hers and Mechanics’ Bank of Cincinati,
Blank of Chillicothe, and the branch of
State of Kentucky, at Louisville, as for-
H the subject of a charge that does not
Hi to the others. In the several places
He these banks were situated, the Bank
He United States had offices of discount
DARIEN GAZETTE.
and deposite, and the law incorporating that
instiution, as has been before observed,
creates an obligation on the Treasury of the
United states to use them as places of de
pgsite, in preference to any other bank,
uhlgss the Secretary shall, for special rea
sons, otherwise direct—and, in that case,
such reasons shall be laid before Congress
at its then, or next session. The charge is,
that no such communication urns made to
Congress. This omission is acknowledged
by the Secretary, who says it was owing to
inadvertence, and that the inattention to the
provision of the law was unimportant,
inasmuch as the provision was intended, ob
viously* for the benefit of the bank; and the
bank had full notice. The notoriety of the
fact is also relied on, to show that no impro
per conduct, or desire to conceal it, produ
ced the omsssion.
The committee sees no reason to doubt
this statement, or to attribute any improper
motive to the Secretary, in this inattention
to the directions of the act.
The charges relative to the Bank of Mis
souri are, in substance.
That this bank was unworthy of credit at
the time the deposits of public moneys were
suffered to accumulate in it to a large and
improper amount:
That the permanent deposite allowed it
was illegal, and unreasonably large:
That those returns and statements of its
affairs, which the Secretary had himself con
sidered essential, were not exacted:
And finally,that, in payment of its, debt, a
large amount of uncurrent notes was receiv
ed, some of them not'worth twenty-five cents
| in the dollar, contrary to the positive injunc
tions of the resolution of 1816.
The committee thinks it very probable
that the Bank of Missouri did make an im
i proper perhaps an excessive issue of its pa
i per: although the mode adopted in the ad
j dress, of estimating that excess, appears not
I altogether correct, as it omits to mention the
permanent deposite of the government in cal
culating the fund on which the emission
might be made If the capital of the bank
were, as is stated §210,000, and its perma
nent deposite from goverment §150,000, _
supposing it to have no other deposites. a”
discount to the extent of §430,000, would
not have been alarmingly excessive, suppo
sing the loans to have been limited to safe
hands, and that punctuality of payment might
have been expected. It is probable that a
failure in this latter respect was the immedi
ate cause of the bank suspending its pay
ments.
The sum of §726,000, which appears at
one time, to have been in this bank, was
certainly a very large sum to have been suf
fered to remain in a country bank; but,whe
ther it was a greater accumulation than ought
to have been allowed, is a question that de
pends on many considerations, chiefly on
that of thesolidity of theinstitution, on which
itself again depended and the solvency of its
debtors, of this the Committee has n’oother
evidence than that arising from the report
of the Committee of the Legislature of Mis
souri, appointed to examine the affairs of
the bank who declare that the debts due on
personal security, as well as those secured
by mortgage, are safe. If this weye well
founded, the bank, even at the time it stop
ped payment, had in those two items alone,
more than enough to pay all it owed.
What information, to put the secretary on
his guard, would have been derived from
the monthly returns, the Committee cannot
determine. They appear to have been fur
nished only up to Ist of February, 1820,
Nor has the Committee observed any de
mand by the Secretary for a compliance
with this stipulation, at any time between
that date and the time the bank stopped
payment. Whether, however, if it had been
demanded and complied with, any different
result, favorable to the United States would
have been produced, it seems impossible to
determine, because, judging from the last
and most unfavorable return, made immedi
ately previous to the stoppage of the bank,
nothing in those returns would have appear
ed to indicate any danger.
A more important part of the charge is,
that the Secretary received from this bank,
it part payment of its debt a large amount
ol uncurrent notes, contrary to law.
By the first arrangement made with the
bank, which has been already stated, it was
not responsible, as far as the Conmmittee
can perceive, for the solvency of the banks,
the notes of which might have been deposit
ed in it by the public receivers. ‘ When the
new contract was made, in August 1819, it
did not form any part of that contract, as it
did with some of those of the other banks,
that the bills already on hand should be at
once passed to the credit of the Treasury as
cash, as may be seen by a copy of the con
tract annexed to this report, marked B. So
that the important question is, whether
those notes were received before or after
the 9th of August 1819 the day. on which
the bank assented to the new contract. If
before, then they are received on account
and at the risk of the government; if after,
at the risk of the bank.
_ The committee think there were suffi
cient reasons to justify the Secretary in be
lieving them to have been received before
the 9ih of Aug. because by the letter of the
bank, of that date, it appears that a much
larger sum in notes essentially of the same
description, was in possession of the bank;
and an offer is therein made to transfer them
to various other banks, to the order of the
Treasury. And, by the statement marked
E, annexed to the address of Mr. Edwards
it appears that as early as the 6tii of Septem
ber 1819, a much larger sum, in notes of the
description of those thus offered by the bank
hpd actually been received on account of the
Treasury from the several Receivers, and
were then on hand. On this point the com
mittee also refer to the deposition of Thom
as F. Riddick, hereunto annexed, marked F.
The committee think it proper to add, that
DARIEN, (Georgia,) <£ljual anti <£;t‘act 3|UstiCf. TUESDAY, JUNE 22. 1824.
of the whole sum received by the Treasury
in these notes, from the Bank of m issouri, a
sum of about twenty thousand dollars only
appears t be unpaid: and of this sum it is
stated by the Treasury there are hopes that
a considerable part will be secured.
Avery large part of the address is occu
pied with observations on the transactions
between the Treasury and the Bank of Ed
wardsville. This Bank was made a deposi
tory of public money, at the solicitation of
Mr. Edwards himself, in December, 1818.—
It stopped payment in September, 1821, ow
ing, at that time, a balance to government of
forty-six thousand two hundred and two dol
lars and forty-three cents.
It is not deemed necessary here to repeat
all that is said on that subject in the address
and the answer. The address, in this part
of it, seems to have two objects: one, to clear
Mr. Edwards himself from any imputation,
on account of having, procured the public
deposites to be made in the bank originally,
and to repel the supposition that he had
been the means of continuing them afterthey
became unsafe: the other, to charge the Sec
retary with continuing the deposites, after
he ought to have been alarmed for their safe
ty, and with receiving uncurrent notes from
the bank, against law: and also with the ne
gligent omission of proper means to collect
the debt due from it to government.
It appears to be for this double purpose,
that the address alleges that in 1819, its au
thor made a publication, announcing his in
tention to withdraw from the Bank ill which
he had been a director, and no longer to be
considered responsible for its engagements:
which publication, as is alleged was trans
mitted to the Secretary—that he also advis
ed the Receiver of public moneys to with
hold the deposites from the bank, until he
should receive further order from the Trea
sury; that the Receiver, thereupon, wrote
to the Treasury, enclosing Mr. Edwards’s
publication, and as he afterwards declared,
received a letter from the Secretary, direct
ing him to continue the deposites. The Sec
retary has said, that no such letter from the
Receiver was on file in Oe Department, and
that none of its officers had any recollection
of such a letter—and, moreover, that there
was no record of any answer. The address,
notwithstanding this declaration, aims to
prove that such letter was written—and,
among other arguments, adduces the fact,
that there was about this time, an actual
suspension of deposites at the hank; which
the address attributes to the caution of the
Receiver, under the advice which had been
given to him. To this it is answered by the
Secretary, that this suspension was owing to
the negligence, not the caution of the Recei
ver—that the Receiver was directed fre
quently and repeatedly to continue his de
postes, and to make them regularly and punc
tually—danger then being apprehended, not
from the bank, but from the continuance of
large sums in the hands of the Receiver.
Without entering into a detail of all the
facts connected with this subject, it seems
to the committee, that there is no doubt that
Mr. Edwards did make a publication, [paper
Cj in the newspapers in 1819, as he repre
sents, and that he gave advice as he rep
resents, to the Receiver. But there is no
evidence that the Receiver communicated it,
or wrote on the subject of it, to the Secre
tary. Indeed; it is not very probable he
would have done so. It is Jo be remember
ed that he was President of the bank, as well
as .Receiver of public moneys, and he would
hardly advise the Secretary that he, as Re
ceiver, could not repose confidence in the
bank, the President and head of which he
was. The committee does not deem it
material to inquire whether the Secretary
received or saw acopy of Mr. Edwards’s pub
lication. There is nothing in that communi
cation which should have alarmed him for
the safety of the public money in the Ed
wardsville Bank—for although Mr. Edwards
announces his intention of withdrawing from
a participation in the direction of it, he speaks
in most, decided terms of its solvency and
safety. while the committee sees no reason
to believe that Mr. Edwards’acted with any
impropriety in procuring the deposite of
the public money in that Bank, or in regard
to the continuance of such deposite; it per
ceives, on the other hand, no reason whate
ver for supposing that the Secretary conti
nued the deposites after being admonished
by the Receiver, that, they were unsafe.—
Ou the contrary, the committee thinks the
correspondence fully shows, that the depo
sits were omitted, or thought to be so, thro’
negligence and default: and that, in enforc
ing and insisting on them, the Secretary was
governed by a proper regard for the securi
ty of the public funds. The committee, how
ever, would take this occasion to observe
that, in their opinions, the appointment of
the Presidents of the local banks, in which
public moneys are deposited, to be Recei
vers of the public money’s to be deposited
in the same bank, is injudicious—that is has
happened in several cases—and that incon
venience or mischief may be not unlikely to
result from such a practice. •
As to the charge of receiving uncurrent
notes from this Bank also, contrary to law,
the committee thinks that the construction,
which appears to have been contended for
by the bank, and acquiesced in by the Sec
retary, of the first article of the arrangement
between them, is not the true construction:
especially, if nothing be regarded but the
terms of the contract. The words of the first
article are, “That the public moneys shall
be entered to the credit of the Treasurer as
cash.” It would seem impossible that these
terms could mean any thing else than that,
for the amount of these deposites, the bank
should become directly debtor to the United
Stales, and that this debt, thus assumed,
should like others, be legally paid. If this
construction, which the committee has given
to the contract, be correct, these notes were
illegally received.
The Secretary’s view of the case appears
however, to have been different. He says,
the term “cash” was used in opposition to
the term “special deposite,” and was not in
tended to subject the bank to the payment
of specie for notes which were not converti
ble into specie; and that it was not understood
by either of the parties that the bank was re
sponsible for the cretfit of other banks whose
notes were deptwit#! in it. The correspon
dence sufficiently shows that the bank ex
pressed the same opinion, at an early period
of the connexion, and long before this case
arose. The construction insisted upon was,
in effect, that the bank was to receive such
bills as the Receivers had lawfully taken, and
wished to deposite; and as these would be
of difftrent banks, more or less remote, the
bank should, for the compensation which it
received, be at the expence of collecting
them, so that the proceeds might be trans
ferred without farther expence or trouble on
the part of the government, to the order of
the treasury; but that, nevertheless, if any
such bill became discredited, while in pro
cess of collection, by the failure of the bank
which issued them, the loss should fall on the
government.
Although the committee do not agree to
the correctness of this construction, yet they
see no reason to doubt that the Sec’ry may
have honestly supposed that the banks en
tered into the arrangement with this under
standing of its meaning; nor any ground to
believe his conduct, in this respect, to have
been governed by any improper motive
It ought to be added that the secretaiw-'jtates,
that one reason for receiving these biift from
the Edwardsville Bank, was that he had at
that time some reason to apprehend a want
of punctuality or good faith on the part of
that bank itself.
The case of the hank of Tombeckbe as it
is explained in the Secretary’s answer does
not call for any partiucar observations. It is
not unlike that of Edwardsville, except that,
in the former case, no loss appears to have
occurred. The loss in the case of the bank
of Edwardsville, arising from the receipt of
uncurrent notes, will be twenty thousand
dollars, unless it should turn out as the Sec
retary says he is assured it will, that the notes
will yet be paid.
The committee has requested of the De
partment, to be informed of the present
amount due to the United Stated States from
the following Banks: to wit, The Branch
Bank of Kentucky, at Louisville: the Hunts
ville Bank, the Bank of Missouri, the Bank
of Vincennes, the Bank of Edwardsville, and
the Farmers and Mechanics’ Bank of Cin
cinnati; and of the present circumstances of
those Banks; and, whether there be reason
to apprehend loss from any other Bank in
which the: public money is deposited. In
answer to this request, the Secretary lias
pommunicated a statement of the Treasurer,
giving the information required, which ac
companies this report, marked I).
By this it would appear, that the balance
now due the Government from these Banks,
is four hundred and forty thousand eight
hundred and twenty dollars and sixty-three
cents.
The committee has no particular informa
tion bf the measures which have been adopt
ed to enforce the collections of these balan
ces. In regard to some of them, as has alrea
dy appeared, the Secretary expresses a con
fident hope ol ultimate payment; a great
portion of the amount, however inay be con
sidered as lost.
The amount of money collected on account
of internal taxes, and from the sales of the
public lands, mostly the latter, since 1816, is
stated by the Secretary at twenty-one millions
of dollars. If of this sum, half a million
should be lost by means of the failure of the
Banks which have stopped payment, the loss
would be less than two and an half per cent
on the whole sum. •
Considering the great and Violent shock
which credit of all kinds hassustained'within
this period in the Western states, and com
paring the amount of loss, if it should even
tually happen, with that of the Bank of the
United States, of other banks, and of indivi
duals, arising in the sartle part of the country,
from similar causes, the committee is of opi
nion, that the result does not shew in the
Treasury Department any want either of
fidelity or prudence in the management of
the public funds.
The other division of the charge contain
ed in the address, relates to the alledged sup
pression, or withholding of papers called for
by different resolutions of the Houses of Con
gress.
One specification under this head is that
relating to the correspondency between the
Secretary and Mr. Stephenson, the Presi
dent of the Edwardsville Bank. The opi
nion of the committee on that subject has
been already given, and need not rfl repeated.
Another relates to the correspondence
with the several Western banks, generally.
The charge is, that material parts of it were
retained, when all was called for by the
House.
The first call was made on the 9th of Jan
uary, 1822, and was, as the committee think,
limited in its proper construction to a requi
sition for the correspondence relative to the
contracts for making deposites. In this way,
the Secretary says, he understood it, but that
he did, nevertheless transmit letters not di
rectly embraced by the resolution,but which,
he thought, were necessary to elucidate the
subject.
The next resolution was on the 12th of
March in the same year; and the only corres
pondence it called for wa3 that with the Mis
souri Bank, and there is no reason to believe
that this was not substantially complied with.
A third call was made in the same year,
on the Bth of May, requiring the correspon
dence with all Ihe banks that had not before
been communicated.
The committee have not been able to dis
cover, in the last very voluminous return to
this last resolution any material letters not
before communicated, except a circular in-
struction to the western Banks, directing
them to note, on the back of each retnrn of
the Treasurer’s account, a description of thq
moneys credited in such return, and the
amount of each, according to a form of re
turn therein giveo. This form is the same
with that in which the return referred to in
Mr. Edwards’s address, marked E, is made
out. This circumstance would seem to give
a greater weight to the evidences to be
drawn from that paper considering it as an
official document intended for the treasury,
under the agreement.
Another charge of suppression, inciden.
tally made, but which the committee deem
it proper to notice, relates to a report made
by the Secretary, in obedience to a resolu
tion of the House of the 31st December,
1819, calling lor such information as he pos
sessed in relation to the introduction of slaves
into the United States. On this point, the
committee addressed an inquiry to the Sec
retary, and received from him the answer an- ’
nexed to marked E.
Although"they are of opinion that there
were paiHbi n the Department containing
informatioTPfafUed for by the resolution, and
which ought to have been communicated, yet,
judging from the statement made by the Sec
retary, in his answer, connected with the
fact, that the papers in question were com
municated to the Attorney General, it is the
opinion of the committee that the omission
was not caused by a design to screen the per
son implicated from punishment or blame.
As to the other cases in which the Secre
tary is charged in the address, with having
suppressed or withheld papers or informa
tion called for by the Houses of Congress,
the committee is of opinion, that, although
papers coming within the scope of the reso
lutions, or call: were not, in some instances,
communicated, such omissions were either
the result of accident, or of a belief on the
part of the Secretary, or of the persons ne
cessarily employed by him on such occasions,
that the papers so omitted were not called
for, or were not material; and the committee
have seen no evidence that any documents
or information has been withheld from the
House, from the operation of any improper
motive or design.
Referring to what has been said in the in
troduction to this report, and repeating that
Mr. Edwards has not had an opportunity of
supporting his charges by his presence and
testimony, the result of the facts which have
appeared to the committee, thus far, in this
investigation, and of their instructions from
them, when applied to the recapitulation of
charges, as stated at the end of the address, is;
First, That tne evidence referred to and
examined, does not support the charge of
having mismanaged the public funds.
Secopd. That the uncurrent notes, men
tioned in the second charge, appear, by evi
dence satisfactory to the committee, to have
been received and deposited by the Public
Receivers, at a time when they were receiv
able under the resolution of Congress oflßl6.
That in the principal case, that of Missouri,
the bank did not make itself responsible for
such notes as cash, and, therefore, the Sec
retary was bound to receive them from the
bank: that, although the banks of Tombeck
be and Edwardsville were liable to account
for such deposites as cash, if the construction
which the committee gives to their contracts
be correct, yet, that both the Secretary and
the banks expressed a different opinion as to
the meaning of those contracts, and that the
Secretary, in receiving fifteen thousand dol
lars from the one, and twenty thousand dol
lars from the other, of those banks, appears
to have acted according to what he suppos
ed to be the rights of the parties, and with a
proper regard to the interest of the United
States, under the circumstances which then
existed.
Third. That no intentional misstatement
has been made to the House, of the amount
of uncurrent bills received from the banks;
although a sum of two hundred and eighty
dollars of such bills was omitted through
mistake.
Fourth. That, although the Secretary may
have misconstrued the effect of some of the
contracts with the banks to the extent before
mentioned, the committee find no grounds
for the charge that he has misrepresented
them, inasmuch as the contracts themselves
were submitted, with the report, to the house.
Fifth. That the Secretary did omit to com
municate to Congress the reasons which led
him to direct the deposite of public moneys
in the three local banks of Chilicothe, Cin
cinnati, and Louisville, where the Bank of
the United States had branches, but there is
no reason for supposing that any conceal
ment was intended, or that the omission was
occasioned by design.
Sixth. That, in some instances, papers call
ed for by resolutions of the House have not
been communicated with other papers sent
in answer to such calls, but that these omis
sions have happened either from accident,
or from a belief that the papers so omitted
were immaterial or not called for: and that
there is no evidence that any document or
information has been withheld from impro
per motives.
Having already expressed the opinion that
this investigation ought not to be terminated,
until the person preferring the charges shall
have been examined, and regretting the cir
cumstances which render such an examina
tion impracticable during the present session
of Congress, and thinking that Mr. Edwards
may be expected at Washington, within a
few days, the committee feel it their duty to
recommend to the House that they be re
quired to sit after the adjournment, for the
purpose of taking his examination, if an op,
portunity shall be presented.
DOCUMENT,
Accompanying ihe Report of the Committee of
Investigation, “ 1
E.
Treasury Department , 20 th March, 1824,
The Secretary of the Treasury hatjiad tb*
JVo. 23.