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s|s ( lE' '-w SI-.-■ 1 111 itl’iiiiii’ii'i§ ♦ •• Many oi lUe political evils, under which every Country in the world labours, *re not owing to any waul of lov« for our Country, but to aa ignorance ot iU real constitution and intertill*.-PHIKSTEY, NEW SERIES Vol. IX. AUGUSTA, TUESDAY MORNING, MAY 15, 1833, No. 95. U. fcialea ftav\\c \Aerpuri, J {Concluded from our last.) j To an inquiry whether there wore any ( other instances of notes being discounted for ihe 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, eases. On the 3d of April the committee, by re solution, called for the following statements j to assist them in the elucidation of certain tacts which had appeared in other docu ments, viy, Ist. A tubular statement showing the aggregate amount of notes dicoumed and s’ i l l due the bank, drawn and endorsed by non residents of Philadelphia; which wil*!| be found marked A. 21. The aggregate amount of good notes offered for discount, and rejected by the board ; drawn and endorsed by residents ot Philadelphia, on Ihe following days res pectively:9 hos August ;i6 h Dec. 1831; £ January; 10 h February; 2d and 14 h id March. 1832; 24 li September, and 15 h 1 Octobo r , 1830. I tie statement, marked B. * will show toe am unt of notes discounted; but he officers of .hr bank state their in-j ability to disc iminate between those that 1 are good or otherwise. i! Sd. The aggregate amount of notes dis counted on personal security, and made' payable more than six months after date,!' which appear to be only four in number, be sides the case ot J. VV. Webb and M. M, ! Noan. j 1 4th. The aggregate of notes now due the bai k, dis counted for a firm or the partners 1 of a fiim, without the name of some person not belonging to the firm, as drawer or en dorser, distinguishing in each of the above statements the amount loaned to members ot Congress, editors of newspapers, or per-' sons bo ding offices under the G -neral Gov ernment. To his last resolution were add ed the following amendments, viz; “ Ist. A s aterc- at of the loans made by the bank sod its branches, to members of Congress, editors < r newspapers, and officers of the General Government, and the terms of such ■ loans ” 1 2d. And the names and amounts ' ot payments to members of Congress in an ticipation <>f heir pay as members before the passage of f e gei eral appropriation bill.” *‘3•» And he -•mount of money due the United Stales, and on deposit in the bank, after deduc i;-g therefrom 'he sum thus 1 advanced to those to whom the U, States are ind bted ” “And lastly, a statement h detail of the amounts paid to those who ' are oow, or have been rn tnbers of Congress ( or fficers of Government, since 1816, for; services rendered to the bank, stating the' nature of sh« service. For the information ' sought by these inquiries, see papers mark ed C. Besides <hefio, there were furnished the sta entente <’f loans made to five editors or publishers of newspapers, by which it will appear, 'hat the accmnini dations to those*' five editors w -re upwards of 110,000 dollars previous to the institution ol this inquiry. ]; The various reports which have, for a lung period past, chaigt-d the Rank with too ' fiequen' tnteicoursc with brokers, and also ! ( of undue favoii i-urt to certain individuals,I 1 as we l as the large transactions which ex hibited hemselves upon many documents called for by the committee, induced them to * xamme par’iculai y the accounts of the Anns of winch Mr. Thomas Biddle was and is the chief partner with the Bank, as a bi ker, F tur subjects of investigation presented, themselves in relation to their transactions; with he Bunk. j Ist. The allowing and paying interest to them on deposites. 2d. Rela es tocerlin loansupon thepledge of stock, and the discounting of notes made to r. Biddle, by the President or others,, without the knowledge of the Board, and on part of them the pledge of stoi k without interest. The committee weultl refer tor the particulars of these two charges to ihe papers marked No. 13. Ihe third subject is the amount of dis j counts made T. Biddle, and the rate of) interest. Ihe document marked No.lll4 1 will show the amount on the 15th of each' m »nth, from the 15th day of September, 1830, tit the 15th of February, 1832. By this it appears that, on the 15ih of October, 1830, he was discounter upwards of 1,120, 000 dollars, and has at no time since been than 400,000 dollars. The committee! doub -he policy of such large accommoda tions to individuals or firms, at any time, as it deprives the Back of the power of fulfill-' jtig 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 overtrading, which produces pecuniary embarrassment and general dis tress. By a statement entitled “Remittances to Europe,” marked No. 16, it appears that the following purchase* l of foreign bills were made of Thomas Biddle & Co. drawn by them, viz; 1831. October 14, I bill 60 days sight, amt at a premium of 10$ per cents. £32,399 68 October 14, 3 bills at 75 to 90 and 105 days, and at a pre mium of 10J per cent. 115.411 11 October 22, 13 bills at 40 to 125 days, and at a premium of 11 per cent. 592.000 00 December 10, 9 bills at 40 to 110 days, and at a premium of 10 per cent. 50C.550 00 1832. February 14, 14 bills at 40 to 105 days, and at a premium of lOi cents. 400,000 GO February 14, 3 bills at 50 to 70 days, and at a premium of 11 percent. 148 000,00 1 794 060 79 By the foregoing statement, it appears! ithat the Batik purchased, between the 24 h of October, 1831, and the 14lh February, 1832, of T. Biddle and Co. foreign bills to the imount of 1,794, 050 79. V'i h regaid to these large loans, the icommittee refer to the statement marked. No. 19 by which it appears that, on the 9 h of April, 1832, the total amount of discounts on billsand notes at the Bank in Philadel phia, was 7,939 679 dollars 52 cents. Os that aunt more than two thirds were loaned to ninety-nins persons, to wit : 5.434 111 dollars. Mors than 3,000 000 dollars were in 'he hands of twenty-seven individuals; & nearly one seventeenth part in the hands .off one person. The commifee have already expressed their conviction, that these large accommodations to a few individuals are in jurious to trade generally, and they wil add, that (hey ought always to be made by either the Board of directors, or the com mittee empowered by them for that purpose. For an explanation of this subject, see papers numbeted 13 and 18. Properly connected with this subject is the accommodation extended by the Bank to individuals on (he pledge of stock. In all the monthly statements of the condition of the Bank, prior to the Ist of March last, there was no column shewing these loans) In that mon'h, for the first time, so far as the Committee can discover, a new column is ezhibhed " loans on other stocks and which appeared, at that time, to have been transferred from the fine called “ bills dis counted on personal security. This change was made in consequence, of a call for stock loans, by the House of Representatives. A s’a ement of the same was called for, mark ed No. 2.0, which exhibits a list of stacks pledged consisting of Theatre shares, Mu suem stock, Arcade stock, Railroad and Canal storks, Coal Company slock, real es tate in Louisiana, &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. i The first statement, tnatked No. 21 shows the amount of specie exported by! the Bank of the United States, during the) year 1831: To London in Mex ican coin $255,000 00 To Paris in Mexican coin, 620,000 To Paris gold 247,000 j do. in mixed bul lion, - . 180,000 ! —— 1,047,000 00 | $1,302,000 oo: 2d. The amount of specie exported since! 1819. will be found in the statement mark i ed N<>. 22. To England, - . 2,598,357 00 To Trance, - - 2,237,398 50 $4,855,755 50 Os this amount, there was in gold, 2,387 927 50 Tn bullion, .... 596,717 00 jin silver, .... 1,871,111 00 ’! $4,855,755 50 I 3d. The amount purchased unco 182.4, (.marked No. 23, shows : of silver 005,850 00 gold coin, .... , 17,596 00 gold bullion, . . . 438,000 00 $1,061,446 00 4'h. Ihe amount of Specie sold since jISI7, marked No, 24, shows it t<> he ■L ..... $5,184,910 29 Os which there was 'i American gold, 84,734 44 British, French and .! Spanish, 48,291 35 ! Silver, 5,051,884 50 I : $5,184,910 29 , sth. ihe amount of specie drawn from j each of the Southern and Western offices, B «'«ce 1820. to the Bank of the U. States , and New-York, marked No. 25, shows the total amount to be 0 , ~ $22,523,387 94 NOf which 20,925,990 07 has been ' drawn to those places since the p[ first of January 1823. 20,925,990 07 6th. The amount of specie, (in the same i statement.) sent to the Southern ami Wcs-1 tern branches, since 1319, is 1896,47* 00 Tha premium received on the Spe cie sold is 97,140 56 The premium paid on the spec)* purchased, it 13.171 85 .... ~ 77,968 71 v\ hat profit* were made oa the specie exported, the Committee did not call for du cumen's to enable them to ascertain ; it must, however, from the great quantity sent away, have been considerate. The Committee called for a statement of alt the specie imported by the Bank from abroad since 1819 jbut as none was return ed, 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 state ments ; but in looking into them the gold [exported is without a designatory name ; jit is believed, however, the amount is con-j siderable. In examining (his subject minutely, the committee find that large amounts of the 1 specie have been drawn from the office a New Orleans. Os this there can be no complaint; i: is the principal debt for re 'turns ot goods shipped to Mexico, which are almost exclusively paid for in specie, and if cannot be expected that it will remain! ■here. But the committee suggest, wheth er the withdrawal of tire specie Irom most of the other ports of the country, and sub stituling paper in its stead, might not be highly injurious to those suctions of cuun tiy subject to its operation. The subject ol the Bank’s furnishing bills of exchange for the trade of India, China, and South America, has been brought tothe ! attention of the committee by document 1 marked N<n 26; and having been so strong ly desciibcd as affix ding great advantages to the country, in the triennial report of Sep ( tember l -st, as “economising” the specie of the country, the committee l ave felt it a du (y to examine and present the subject to the consideration of Congress and die commer cial 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 ol dealing in bills of exchange does not “econo-; inise” the specie of die coun ry a s all. I is a universal law of drawing, that funds must .either go b f*»re or tuilow mter the draft to [honor it at maturity; and whether it g'-eg idirectly or circuitously, the fund .lodis |rharge i‘, must, sooner or ia er, arrive at die place of payment. These bills atelobe paid in England; ba 'hey go-round the Cape of Good Hope before th y reach their place of destination. I nstead, therefore, of send - ing the specie dir.-ctly to Aodia and China, as formerly, who d 'es not perceive that it must now be sent to England, die country upon which thes ■ bills are drawn, there to meet them upon died arrival at the place where they are to be p«id f The Bank con sequently becomes die shipper of the specie, to pay its hills, in place of the merchant to purchase his merchandise in the E st Indies, jit is simply and purely nothing but a change: lof the destination of the specie, with only! ;'he advantage of its going to Lomdon. 1 he mode in which these bills are drawn i and disposed of to the purchasers, having twelve mouths to run, as will be seen by a copy ol the obligation taken by the flank marked No. 27, the committee consider ol doubtful utility to the country. The legiti mate object of batiks (he committee believe to be, granting facilities, not loaning capital. 'The supplying of bills appears even much jmore objectionable than loaning capital, for it encourages an operation which commences andends without the employment of any* | capital whatever, and is sirnilui in their char-! acter to respondentia secuni ». The buyer 1 ,is enabled, within the term of credit, to: . make the voy ge, dispose of his goods, and i obtain from the proceeds the funds to Kite’ l his obligati n, and the Bar k to transmit the! ' same to the place upon which their bills are* j diawn, (width are at six months sight,)long! [before they become due it would seem to produce a greater export of specie evei tual-' , ly, than would otherwise take p ace if the; j operations were commenced with specie, and i not with hills purchased in the manner de-| - scribed; for the rneichant, relying upon his ' immediate resources, would not engage to 1 ; such an extent in the business, and would . 'combine in the operation much of the pro duce of the cuun ry; whereas, relying upon; jan extensive ciedii, he h fcards every thing jon the success of the enterprise. It is a ■ species ot speculation in trade leading to great risks, and certainly terminating in 3 over-trading—he evils of which the couu -1 .try is now sorely experiencing. By loans of! ' a similar characer, by insurance companies * providing funds for ir ders to China. Gov ' eminent has sustained more loss than in any ‘other branches of trade. £ [ The increase of tha number of branches established since 1823, cannot be passed! f over ia silence by the committee, and de- 1 serves, as a source of extended influence of the Bank, the most serious consideration. | In some few instances, where new branch es have been established, peihaps they may [have been called for Ly the community, and [may have been useful to them and profitable to the Hank; but, in most of the cases, the committee doubt whether they were called for from public utility, and their establish ment will, in the end, not only prove profit able to the Bank, but very injurious to the communities among which they are located. Mr. Cheves, in a letter of the 27th ol May, 1819, to Mr. Crawford, then Secretary of the Treasury, says—" lam perfectly satis fied that, with the present organization of dm Biok, it can never be managed well. fFe have too many branches, and the direc * tors are frequently governed by individual and local interests and feelings. For a time 1 we must bear with the branches, but 1 hope ' they will be reduced.” I Again, in the same letter, he observes : i|“ The real and original evil under which' i* he country is suff ring, is oveibanking. jTbis leads to excess in trading, manulacfur-| ‘ ing. building, and speculating; and the his : lory of the ill-judged enter pi ises which have been undertaken in these several concerns, 1 would give a full history of all the distress-, es of this country, excepting a little agt i-l cultural distress growing out of the inordi-, mate expectations which the others excit-l led.” 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 ope- ( ; rating with more extended force, from which similar effects must follow, augment ed in proportion to the increase ol blanches. ' The stockholder, at the triennial meet ing on (he Ist October, 1822, recommend ed a withdrawal of some of the branches 1 .then existing, in these words: " In taking into view the business of the Bank, as * connected with its different offices, the com 'Jmittee think it right to recommend to the ‘ continued attention of the President and [Directors the necessity of withdrawing those ; branches which are f und to be unprofitable, and transfer ing their funds to other offices ■ which shall serin to require additional capi tal.” Since this period two have been dis continued, and nine others have been es tablished, as per triennial report of 1831. These opinions of Mr. Cheves, in which the 1 committee have concurred, were approved ,hy the stockholders, c,3 will appear by the ' following extract hone this same report in 1822. They say. “ They take great plea sure in unanirn usiy declaring that the cir cumstances of the Bank fully realise their anticipations, as expressed at their last ‘meeting, in regard to the President, (Mr. Cheves,) who, by his talents, disiuleresied ness, and assidui y, has placed its affdrs in an attitude so safe and prosperous as that 'he burthen of duty devolving upon his successor will be comparatively light,” The committe cannot but think that, had the succeeding direction of the bank been guided more by the opinions and wishes of Ihe stockholders, as then expressed, and 'gone on gradually growing wi ll the giowth, and increasing with the natural wants of jthe country, great sull'crings to the com munity would have been avoided. In the year 1819, great abuses existed ini the branches, of which Mr. Cheves speaks wi'hout reserve, in his last report to the) stockholders, as well as his correspondence with Mr. Crawford, ami upon casting the, eye over the monthly statements, it is re mark hie to observe what losses have taken place at the branches compared with the mother bank. For instance ; on the Ist of January lust, the loss of the mother bank, on a capital of sixteen millions and a half was, in round numbers, 328,000 dollars ; . h it of the Baltimore bunch was 1662,000 dollars, 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 jdollars, on a capital of 500,000 dollars, los jing nearly one half of us capital, and so 1 ;wiih all the rest of the branches, their loss-j ! jes are out of all proportion to (heir capital, ; and ten times greater than the mother bank, [according to the amount ol their respective capitals. These losses, however, were prin cipally incurred prior to 1819. Thepioper inlerence to be drawn from these fact is, [that the worst of management has existed 1 in the branches, 'l The “ Contingent Fund” lias claimed the attention of the committee. The ob ject for which it was originally created, i and the oiiginal amount piovided, together 1 with the additional appropriations which ‘have been made to it, and the manner in 1 which the same have been applied at differ*! 1 enl periods, will be explained in the follow ing documents. The report of the Board of Directors, 1 in July, 1821, published in the Gazettes at that time, marked No. 23; the report of. ':the stockholders at the triennial meeting ini, October, 1822: the report ol the Dividend ‘.Committee, on the lOth January, 1323,, Ijinarked No. 29; a statement of the parti- ! ■ culars of the debts " cons',dersd lout,’? marked No. 30 ; a statement of the sns pended debt and real estate, with the pro bable lose (hereon, marked No 3| -%, e statement headed " Contingent Fund ” marked No. 32 ; the sates of the forfti ed bank stock, marked No. 33; and the divi dend reports for July, 1829, January and July. 1830, January and July, 1831, mark ed No. 34. To these the committee n fer for (he particulars of he subject* to which they relate, in connexion with the ** Con tingent /V end The c inmittee lee I it their duty now to give (heir view* no to the causes of the pre jsent distrea- in the trading community, and ■ which they (ear may greatly increase. U , is an acknowledged principle that like can ■l*6*.fn all rases, produce like effect; and fas in 1819 contraction followed the exp.n . sion of 1817 and 1818, so by the same rule ; must contraction follow the immense ex pansion of 1830 and 183 J, and liktfeffVcts -and consequences succeed. To illustrate i more cleaily the position, and bring it home ,!to the mind of every one, the following ta . ble of the state of the bank during some of the months of 1818 and ’l9. 1831 and ’32, . are here exhibited, embracing items from j w, 'ich direct calls upon the vaults proceed, and the in mediate means which remain to meet them, viz ; The first are the deposites, circulation, and debts abroad, not on per manent loan, Ihe second, the specie, lund ,ed debt, and notes of other bank,. the a mount of each will be found under their proper heads at the various periods men ..turned. , [ i i ; iFundeddebt. Specie, Notesofoth’r issues. . Circulation. Deposites. sueinsarope banks. J September 9,430,926 60 ; 2,780,726 15 2,838 632 19 19.622,881 59 a214,885 10 12.484,420 16 1,908,706 57 October, (7,425,549 12 2,818.208 96 2,541 072 90.19.854,881 39. 3,713,551 0b 12,986,543 83 173.072 80 November, 7,393,049 12; 2,176,928 92 1,974.037 OT 9.968,934 15 8.348,421 82l 8 682 734 85 ! 596,432 99 December, 7,395.049 12! 2.389,626 28 2,039,001 58 19,989,618 07; 7,286,069 49- 9,134,033 14! 499,517 04 1819. ' | ! | January, 7.391,823 64,' 2,665.696 52 1.8 77.909 13 13,719,828 49 6,563,750 19 ! 5,792,871 40 ! 2,049,212 72 February, j 7,391,523 64 2,184.088 57 1,999.537 84 ’3,719,828 49 6,441.407 17 6.374 907 53 1 665,083 69 Mi-rch, 7,322,823 64 2,053,622 90 2,048,108 08 13,719,828 49* 5 994,301 1~ 6,5°.l 929 4911,130,941 13 April, 7.160,210 71, 2,104,739 53 1,749,951 40 15.867,828 49 6.829.690 21 6 147,610 691 876,648 00 May, 7,159 485 36 2 283,882 49 1,830,514 55 14,068,138 49 5,610.C24 91 5,658 935 72 445,320 00 June, 7,139,485 36 2,510.371 27 1,415.530 35 14,084,138 49 5,083 613 40) 5,424,707 87 356,007 31 1831. I | September 1, .3,497,631 06 11,545,116 51 2,080,442 33 35,811,623 96 22,399,447 52 15,884.938 43 168,372 72 1832. I January 1, 2,200 00 7,038,823 13 2,171 676 31140,621,211 18 24,630,747 60117 997 889 57 1 447.748 68 April 1, j Nuue. 6,790,753 63 2,836,900 40.42,118,452 13 23,717,441 1017,056,386 69j 1,876,802 39 j The preceding table shows that at Do pe r;od in 181), when the Bank wag very near suspending payment, was it less able to ex tend relief to a suffering community as at the present moment. In April of hat year, the month in which ils d ftiruttie* were the greatest, its means of specie, no'ea of other banks, and funded debt, (which could have been turned into specie or note* of other banks,) amounted to upwards often millions of dollars > an«i the whole demands,, which could come against it in the same month, of circulation, dep< sites, and debt* own g abroad, amounted only to about four teen millions. But (he committee feel bound, in candor, to state, that this wng af ter a number of mon'hs ol constate con traction, not only by the Bank of the Unit ed States, but also by most of the other banking institutions ol the country, wnere r general exhaustion had been produced. It was on the sth April, 1819, that Mr Crew ‘ord, then Secretary of the Treasury, wii 1 * to Mr. Cheves thus : “ fr ia even doubt ful 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 (hat the safely of the Hank can oe only effected by withdrawing neaily the whole of its paper in circulation, it the Bank doe* this, all other solvent hanks will be compelled to do the same When this is effected, gold ai d f iUer will tie introduced into the country, and make r (Substantial part of the circulation, and en (able (he banking institutions gradually (<j Resume their accustomed operations. Whilal jthie is effecting, the community,in all its lations, will be greatly distressed. { sidering the extent of the suffer'.rp, a jr greatly to be desired that some c od ma result from it ”