Indiana Republican, Volume 3, Number 116, Madison, Jefferson County, 27 February 1819 — Page 2

stock jobbing transactions, ar.d -with respect to Walter Bowne, although his residence .in NewYork did not give the committee the same means of information, yet no evidence has been discovered to implicate him. Jonathan Smith, esq. the Cashier of the bank, has had considerable dealings in the purchase and sale ot stock, and in making and purchasing contracts for its delivery at future periods. The remark is applicable to J. W. M'Culloch, esq. the cashier of rhe office at Baltimore, to a much greater extent. Although these gentlemen might have no direct agencv in the measures which were to affect the price of stock, yet the influence of their stations ouht to be rrrcat ; and ir is to be lamented that they should have placed themselves in a situation where the exercise of that iniluer.ee might be ascribed to improper cauccs. With respect to the other directors, their examinations will enable the house to determine how far thev have minried in thc!e transactions. Besides the objection which Ins alreadv been ure i to the iesolution of the 8th August iSi;, authorizing the president and cashier to discount notes, as being connected with a series of proceedings evident Iv calculated to enhance the price of" stock, by affording facilities to the makingof prompt purchases, it is still more objectionable, as being a delegation of power which, in the opinion of. vour cemmittee, the directors had no ngut to grant. And when, connected .with the power also given to -them, of indefinite and unlimited renewal of the stock notes, it was ohcin the rncat bulk of the capital of the bank entirely within -their control. The same practice appears to have been almost universal at the cilice in Baltimore, where the president and odder, as appears by their eraminations, have, under the authority of the board of directors at that place, always discounted notes -without an Endorser, secured by a pledge of stock. As they were not restricted bv the board, they appear accordingly to have exercised the power to a very considerable extent. Still more objectionable, in the opinion of your committee, h the practice ot that oiiice of ab lowing the -president and cashier to purchase or discount drafts and bills, payable from sWht to sixtv davs ; because, in those discounts, the personal security is the most important circumstance. It has been done to very large amounts, though no loss appears yet to have accrued. At Ricluuond, :v:t equally improper delegation of power to the cashier, appears to have been granted, in authorizing him to discount notes on pledged stock, at 6o clays; ar.d afterwards, a similar authority to di-count at 4 months. After an experiment cf three weeks, the directors of that office had the wisdom to abandon it, vide papers of Richmond oiTicc XLVI. At the oiiice in this city, the power has been discreetly limited, and as discreetly exercised. Two bye laws of the bank seem to your committee to deserve notice one of them, that no discounts shall be made without the consent of thrcefourths cf the directors present and an.

ether, that no director, without special authority, -shall be permitted to inspect the cash account of any person with the bank. These bye laws appear to render nugatory the provisions of the charter, authorizing the appointment, by the government, of one fifth of the whole number of directors, and arc different from the provisions in that respect by the former bank cf the U. States, although most of the local banks in Philadelphia have similar regulations. Should a state ot things exist, in which the stockholders should deem their interest hostile to that of the nation, such provisions as those stated would render the government directors mere spectators of the proceedings of the board. The committee endeavored to obtain a statement of the shares, upon which the instalments had not been paid, ami of the persons owing them. The oilicers of the Bank satisfied them that, from the irregular manner in which the accounts ot the payments had been made, it was impossible to obtain an accurate statement. But the fact is admitted, that the dividend have been paid to some delinquent stockholders, who are few, and to whom but a small amount of stock belongs. The dividends have been uniformly paid to those stockholders whose notes were discounted to the full par value of the stocks with the proceeds of winch they paid their in-tai ments, including the funded part as well as the specie pirt. The injustice of this proceeding towards those who had icallv .paid their instalments according to their engagements, and who received no more benefit from thosepaymcnts than those stockholders who substituted their stock in place of specie and funded debt, is most obvious, The stock that had really never been paid for, but which remained pledged for the very credit given it, was entitled to draw, and did draw, as much dividend as that which had been fairly and punctually paid. Tha root and source of all the-e instances of misconduct, was the illegal and reprehensible division of stock. By the fkbt fundamental article of the charter, no person, co-partnership, or body politic, shall be entitled to more than thirty votes , and yet, in violation of this provision, it will appear, from the examination of Thomas Leiper, George Williams, Dennis A. Smith, and James W. M'Culloch, it was z common and general practice, well known to the judges of the election atul to the directors, to divide shares into small parcels, varying from one to twenty shares to a name, held in the names cf persons who had no interest in them, and to vote upon the shares thus held, as attorneys, lor the pretended proprietors. By some of the witnesses it is avowed that the object was to influence the election. Mr. Leiper, one of the judges of the first election, states that he did so himself. The effect was, that Baltimore, which had about 1 -7 th of the shares owned by individuals, gave more than .t-4th of all the votes that couid be given. In that place there were 1 1 72 shares taken in 117a names, by

George Williams, as attorney, the whole of which, on examination, he owned. At Philadelphia, nearly one third of the shares was owned, and the votes given at that place were about two ninths of the whole authorised. For a more particular knowledge of these divisions of shares, the committee refer to the statement herewith submitted, marked xlvii. They arc not aware that any remarks which could be made by them could present the subject in a stronger light than the above statement of facts. The same persons who thus held the power of appointing directors, arc found to have the greatest loans on stock. It is alleged that they have now consolidated the shares, but, when occasion shall require their division, former practice will facilitate the operation. In the opinion of the committee it is the greatest evil in the whole system, and is the origin of all others. So long as the larc stockholders can controd the choice of directors, so long can they hold and acquire immense amounts of stock, by the proceeds of notes discounted on their shares, and, so long as they can obtain such discounts, they can control the election of directors. '1 he system places the property of the other stockholders, and of the government, the credit ot the bank, end of individuals, and in a neasurc, that of the nation, the mercy of a few hsge stockholders, who, without having really contributed to the wealth or value of the institution, have the control of if,-- concerns. It requires a corrective, and the committee are of opinion, that it is in the power of Congress to pass a supplementary law, not contrary to, but in support of the provision charter, and to give it the true and real effect originally contemplated. And they have instructed their chairman to ask leave to report a bill prepared for that purpose. To be c included in cur t:::;t.

House or R. ?R i.SKNT ATI VhS. t ;,v.jy, Feb. 1. Bank cf the United States. Mr. SpeoTt x presented for consideration the following resolution : Resolved, by the Senate and House cf Representatives cf the United States cf America, in Congress assembled, That "the Secretary of the Treasury shall cause all the public deposits in the bank of the United States and its several offices of discount and deposit, to be withdrawn or. the first day of Jan. uary next ; that after the said day, the bills or notes of the g aid corporation shall no longer be . receivable in any payments to the United States ; and the Attorney general of the United States shall on that day, or zs soon thereafter as -may be, cause a scire facias to be sued out in conformity to the provisions o! the " Act to incorporate the subscribers to the bank of the U. States," calling upon the said corporation to shew cause why its charter should not be declared forfeited ; unless the said corporation shall, by a legal act to he delivered to, and approved by, the Attorney General, and to be by him transmitted to

Congress at the next session thereof, declare its assent to the following propositions, on or before the said first-day of July next, viz. I. That Congress may y law provide such means as may be necessary to enforce the first fundamental article of the said charter respecting the right of voting for directors, and particularly to provide that transfers of stock shall always

be made to the real owners thereof, or to some person or persons in trust for the owners, who shall always be named in such transfer ; that stock shall always be deemed to belong to the person or persons in whose name it may stand, or for whose use it may be declared in the certificate to be held, and

that no evidence whatever shall fore become a part ot the charbe received in ?ny court to ter of the bank. contradict or explain the certi- The resolution having been iicatcs of ownership. read, and the question stated

2. That congress may pro- whether the house would nor; vide for the reduction of the consider it y capital stock of the bank, in a Mr. Spencer, with the view ! just and equal proportion, by of removing any objection the stockholders thereof, when which might be felt to the conconvened in a general meeting. . sidcration of the motion, stated 3. That the power of re- that it was not now his wish to moving any director for mis- go into a discussion of it, but conduct, may be vested in the only to be enabled to have i: President of the United States, referred to the commutes of 4. That the bank may pur- the whole house, to which had chase not exceeding five mil- been committed the report lions of dollars of the funded concerning the management cf debt rf the United States, and the Bank. may hold the same without Mr. Tyler asked leave to , hemp subject to redemption make one remark. He hoped unlc:i consented to by it, un- the house would agree to ccn. til the time or times specified sider the resolution, that it in thc certificates thereof. might take the course suggest. 5. That no bye-law of the ed by the mover, and have a corporation shall exclude the full and fair discussion. He directors appointed by the go- wished that every member ; vert itnent from a full know- might have an opportunity of iedgv; of all the concerns of the exhibiting his views, and that han't, and of the accounts of the house might make its km! evei.-y person dealing with it ; decision with all the lights to j and that the assent of at least be derived from deliberate dis- f

one-public director shall benecc$.sary to allow any discount, aird to render valid every act of the board of directors. 6. Th it the provision in the second fundamental article, prohibiting any director from holding his office more than three years out of four in suecession, may be modified or repealed by Congress. 7. No discount shall in any case In made by the bank at Philadelphia, or bv anv office, A 9 without' the conned of at least four directors of tle bank, or the oflice, as the case may be. S. Congress may authorize the bank to del and trade in other things than those cnumeratcd in the rffnth fundamental article, so as to receive pledges of its own, stock, and of the funded debt of the U. States, in security for loans, and to sell such pledges on a forfeiture thereof. 9. That persons holding stock, upon which any instalment shall have been paid by the proceeds of notes discounted, shall be compelled gradually, and as soon as circumstances will admit, to pay the full amount of such instalment in coin, or in coin and funded debt, according to the provisions of the charter; and no dividend of profits shall be allowed to such stock, until the said payment is completed. 10. That the Secretary of the Treasury shall be permitted ' '..1 at any umc, ciuier 111 person, or by agent to be appointed by him, to inspect all the books, ' . 1 papcis, cm icapuuuciiec, mm. utes, and proceedings of the board of directors of the bank,

and of all its offices, and of all their officers, 11. That Congress may ex. tend the time for the payment of the whole, or any part 0f the sum of 1,500,000 dollars required to be paid by the 20th section of the charter, 12. That a scire facias may be issued out of any circuit court in the United States, i the case stated in the charter; and whenever it shall be issued

out of any other court than k. x the circuit court of Pcnnsylva. h nia, sworn copies of the booknfl and papers of the bank shslM received as evidence,'1 Vjp . of the originals. t y The foregoing provisions, or ;Lc any of them, may at any time f o be enacted into a law or laws, f C' by Congress, and shall, there, fb

cussion and mature reflection; : but he would here say, that J J whenever the question on the !; 1 adoption of this motion should j be presented to him, he should j ' be obliged to vote for its rejec- ; J tion, under the hope that the , house would, in preference, ! direct a odre facias to be forth- , with issued. I The house having agreed to j consider the resolution. : Mr. Spencer moved that it ; : be committed to the committee of the whole house on the state of the Union, to which : was referred the report of the 1 committee appointed to investigate the management of tha y : Bank of the U. States. ; Mr. Johnson, of Virginia, , hoped the resolution would net be committed, but that i . . would belaid on the table. jJ lie hoped the question wouli j be fully met ; and it had been his intention, if no other mem- f ; br would do so, to move to jr - instruct the committee on the , judiciary to report a bill to re- j peal the charter of the Bank. j: The patient, Mr. J. said, was too far gone to be recovered; expedients were useless, a f'if solution was inevitable, a.v;;: was better to meet the question at once. lie, therefore, mcrt j ed to lay this resolution on th y. table. i i

Mr. Spencer was as willing as any one to meet the qteS tion fullv. and to eive the subject a fair and ample cu$' I T .1 ik. !' cussion ; anu ne inougnt 1; course he proposed to psC ' the resolution, was the be I . iT I r II ! t way 10 airora it a run cou,v j ration, because the report already committed, and, b)T r:

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