Western Sun & General Advertiser, Volume 22, Number 42, Vincennes, Knox County, 26 November 1831 — Page 1

A BY ZLLZHU STQUT.J VIHCHHSS, (2ik.) SiLTCJRDiLY, NCV3X?2EES. 26, 1831. VOL. XXIS. 22

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. From the St. Louis Pracon. FU3LIC MEETING BANK OF THE UNITED STATES. jLagality cf the Pills or Draft in circulation. A very large and respectable body of citizens, without' distinction or politics, assembled at the court-house in this city, on Mmidiy afternoon, to hear the promised discussion on the. legality of the Hills or Drafts .f the United States Branch Banks now so generally in circulation. Mr. Benton addressed the meeting for an hour niul i qu tl tei; and the following sketch of his speech is gi -en to the public as the substance of what he said : Mr. Bkntom commenced with stating the occasion of the meeting, lie snid the object of it was not politicalbut legal; it was an inquiry into the legality of almost the whole mass of cii dilating medium now. in the conntry. No citizen who had any rard hr hi tnelf, or the community, would distmb &uc!i a subject wantonly, liglitly 01 inconsiderately. Nothing but the-strongest convictions of n.ht. and the clearest vievs of pi ojtriety, could justify such a step. He trusted he was not obnoxious to the charge of "wantonness in this matter. He had long hd his opinion, and h id only lately m'ide it known. This topic, was to have been used last winter in the Senate of the U. States, in the discussion of the Resolution ainst renewing the charter of the United hutes It ink: but tliP Resolution was kept out; the argument which had been kept in reserve, as the chief and greatest to be relied on, was therefore deferred to the next session, and nothing said about it, not even to his familiar fric.ds, until the question was exploded ia Ohio on the trial of a counterfeiter. After that his opinions was publicly expressed; and as the question was now raised before the people, he deemed it important .to their interest, that they should take it up; that they should have all possible liirht shed upon ir; and that the decision should be correct. Jf the bills or drafts in question were illegal, the people ought to know it; if the Bank Tva not legally bound to pay them, as the people were taught to believe they were vlierever presented to a branch or the parent bank, the people should know it, if they were any way inferior to the promisory notes of the Bank, the people might to know it, that they might exchange them for such notes. If the Bank said the notes and the drafts were equal, it could have no ohjection tt give out the notes in exchange for the drafts; if they did object, that objection should make the people insist. He recommended no run upon the 11 .ink for silver but an exchange for the real promisory notes, about which there was no dispute. The question I come to answer, continued Mr, B.is, whether the drafts usuallv drawn by t'c Presidents of the Branch B inks of the United States, upon the Cashier of the parar.t bank, are leg d instruments; such as will give to the holder the rights and subject the B ink itself to the cbligations and fienalfirs. which the charter attach.es to the h-gal btlls and notes of that institution. A judicial decision in the state of Ohio has determined that question m the negitivc; and, however deplorable uuy have been the consequence of that decision in discharging a counterfeiter from the penitentiary, and proclaiming that there i no law to punish counterfeiting this species of bank paper, I hold the decision to have been correct; and am disposed to lay the blame of turning loose a count t filter to continue, his depreciations upon society, he and all his associates, without further fear ef law or punishment, not upon the Judges who made the decssion, but Upon the Bank Dm-ciors who issue the hills which the charter of the Bank cannot pro tcct. 1 think as the court thought; and now proceed to justify my opinions by reviewing so much of the chartered powers of the Bank as apply to this question. These powers are contained in the 11th section of the ch irter, and are comprised m seventeen articles, which are called the f i'id tment al ai tides of the constitution rf the Bank, and are declared to hv"tlie ri.lcs, fivjTui.ns, t:nii.ifi,ns and restrictions, under which the cm poration mav act. The lith .( these fundam ntal articles enumerates and defines the different species of p iper securities which the corporation may issue: and these may be classed under three heads, t'j :.- 1. Bi'ls under seal: if upon n edit not to be for longer time than Mty days, iu r for a less sum than fcS.GnO. 2. Bills not under seal: if upon credit not to he for longer time than sixty days, nor tor 3 less sum thanSU'O. . Promissory notes: limited by tlu ITsh fund imental article to the minimum size cf S 5. T!.ee three descriptions of paper securi

ties are all tint the corporation of tut Bank can tissue; and the whole of these are required by the same fundamental article which authorizes them, to br .signed by the President oj the Jiarent Punk, and counttrsigrud by the principal cashier Or. treasurer thereof. They are then, for the purpose of transfer and;Wgociaui!ity divided into two classes; one.plass being transferable by endorsement alohe; the oilier by mere delivery; and each -cltss being determinable by the words on the fa.ee of the paper. If made payable to the bearer, they pass by delivery alone; if made payable to a named person, r his order, they are then assimilated to foreign bills of exchange, and are subjected to ail the nice and rigorous law which governs such bills. This is expressly declared in the 12th "fundamental article. Thus issued, the whole of these bills and notes, are declared to be binding and obhgatoty upon the Bank corporation, and are subjected to a variety of provision;, intended for the secuiity and benefit of the holder on-one side, and the safely of the bank 011 the other. Let us now try the drafts in question by the terms of the 12th fundamental article, the one, and the only one, that authorizes an issue of bilis and notes. Thty lead iu this way: "flashier of the Bank of the United StatesPay to George Iv. Mc.Clunnegle, or order, ten dollars. Office of Dist ount and Deposite. St. Louis, St pt. 20th, 1829. Jno.O. Fullon, Prest. Henry Cox. Cash. And on the back these words. 'Pay to bearer." George K. McGunnegle." 1. The first test to which this draft is to be subjected is the. signatures, and there it tails in toto. The names signed and couu-

signed are not those cf the President of the parent Bank, and of the principal cashier, or treasurer thereof. This is a naked matter of fact which every eye can see, and there is no room for debate or argument about it. The draft in question is, therefore, unauthorized by the 12th fund oriental article, an 1 is illegal and void against the corporation so far as that article is concerned. 2. The next test to which I will subject it is iu that part of the constitution or the Bank which authorizes Branch Banks, or as they are called in the charter and in legal proceedings. "Offices of Discount and Deposite," to be established. I his is the 14th fundamental article. It authorizes the Directors of the B.tnk (and by the word Bank the parent Bank is always intended) toes tablish offices of Discount and Deposite in the States and Territories, and to commit "the management" of them, and of their business, "to such persons" and under such regulations, as they shall think proper, "not being contrary to law or the constitution of the Bank." Not less than seven, nor more thdn thirteen, "managers or directors" are to be thus appointed. And with this the article ceases. Not one word in it to authorize the emission of any species of circulating u.edium whatever. They may discount notes, that is to say, lend money when they have it; and this money properly consists of the promisory notes of the parent Bank, payable to bearer on demand, at the branch named on the face of the note. And they must receive money deposited with them for safe keeping, to be restored on demand. This is what the branches may do; and for the faithful performance of these two duties the Bank and all its funds are bound, as I will hereafter shew. One other thing the branches may do, but not by virtue of this fundamental article, and I will, therefore, defer its consideration till I come to that part of the charter; they can 4deal" and "trade" in bills of exchange. Of this heieafter. I will proceed with subjecting this draft to the test of the provisions, limitations, restrictions and penalties which attach to the legally issued bills and notes cf the Bank. 3. The 8th fundamental article provides against excessive issues of bank paper. It declares that the corporation shall collect debts shall not owe above thirty five millions of dollars, (over and abov e for monies deposited) unless authorized by a law of Congress. In case of excess, the Directors under whose administration it happened are made liable iu their private capacities, un less they were absent, or dissented. and made known their dissent to the President of the United States, and to the stockhol ders, at a general meeting which they may call for that purpose. This provision applies only to the directors of the parent Batik, not to the managers of the Offices of Discount and Deposite. Thi provision, tin n, against exctssiv e issues does not apply to these drafts; and at this test they also fail. 4, The lTth section of the charter forbids the suspension of specie payments, and es tablishes a high rate of damages for a delay or failure in such payment. Its substantive woidsare: That if the Cerebration shall at any time refuse or neglect to pay on demand any bid, note, or obligation, "issued by the corporation" according to the contract, firomise or undertaking, expressed therein; or shall neglect, or refuse to pay on demand any monies in deposite in the Bank or anv of its offices, the person entitled to receive the same, or the holder of any such notes, bids, or obligations, shall tie entitled to recover 12 per cent, dajnages. This section, in its terms and in its tenor, applies exclusively to the notes, bills, and obligations authorizes to be issued by the 12th fundamenal article of the constitution id' the Bank. . It can have no application to this draft, because, in the first place, it is neither a bill, a n -.He, nr an obligation, signed by the President of the Bo.k, and countersigned by the priiicip l cashier or treasurer; in the second place, there is no contiaet, promise, or undei taking, for the payment of money expressed m the face of it; in the third place, it is nothing but an order, which must goto Phil idelphu, and be refused payment there, befoic even a condition il and implied liability would rest upon the drawer and endorser in St. Louiv There is, theiefoie, no legal right in any one to demand the pa) -aui.t ct t!ui draft i.: St. Louis, of couu uo

1 . . .U 1 - - rj .f paviiicni. emu .uii- ai nie viui point en nun payment on demand, and double intei est for delayed payment, this dm ft totally tails! Let us continue the ordeal a little further, j 5. The 17th fundamental article limits the niir.inuim size of the notes issued by the B ink to five dollars. The limitation applies to notes alone; it has no application to bills and obligations. The object of this is clear. Promissory notes, payable on demand, to bearer, were the only species of paper intended to circulate; bills and bonds pa) able to a named individual or his order, were n at for circulating, and could not be. They would have to be paid when due, and once paid, were done with; and wererembarrassed besides with all the law relativ e to making and proving indorsements. Notes alone were to circulate; and" the evil to be prov ided aga'mst was an issue, of c'ucidatiug paper of one, two, three and four dollars. This evil the charter has prohibited; but if the circulation can be supplied, if the promissory notes can be withheld and their place supplied by bills of exchange, or bills of any kind which are not promissory notes, the evil intended to suppress may grow and flourish in full vigor; for these bills may be for sixpence, or for a penny! And here again the draft before us stands condemned. 6. Again: I he 13th fundamental article of the constitution of the Bank erects the Secretary of the Treasury into a standing guard a permanent supervisor over the solvency of the institution; and, for this purpose, authorizes him to demand from the Bank, weekly, if he pleases, a statement under all the heads essential to its soundness, viz: 0 1. A statement of the amount of capital stock. 2. A statement of the amount cfdebts due to the Bank. 3 A statement of the amount rf money in deposite. 4. A statement of the amount of notes in cii culatinn. 5. A statement of the amount of specie on hand. And for verifying these statements, the Seeretai y is authorized to inspect such general accounts in the books cf the bank as shall relate to said statements. Here is no mention of bills and obligations; no mention of Bills of Lxchange! W hy? because such bills were not intended to be in circulation; because thev. do not constitute a charge upon the Bank, it is always receiv ing the cash for them, or ample slcurity for the cash, when they were sold; and because no general statement of them could be made, as they would be becoming due every day, and when due be paid ami done with. The supervision of the Secretary of the Treasury does not extend, then, to real bills of exchange; he can demand no statement of them; he can inspect no book in relation to them. If, then, the circulation may be supplied by bills of exchange, the standing guard the permanent supervision w Inch congress has placed over the solv ency of the Buk, is totally lost. The highest character which 1 have heard claimed for these Branch Bank orders, is that they are bills of exchange; and in that character they fail at the application of this important test this provision which is intended to prevent the insolvency of the Bank, anil to save the country from the effects of such insolvency, by hav ing the tosciu rung the alarm bell sounded from the treasury department, the moment there was an undue proportion occurring between the notes in circulation and the specie to take them up. 7. The 14th section cf the charter enacts that the bills anil notes "of the said corporation," 01 iginaUy made payable on demand, or having become payable on dem mil. shall he receivable in all payments to the United States, unless otherwise directed by act of congress. The bills and notes here mentioned are no others than tho.e mentioned in the 12th fundamental article of the constitution of the Bank an article to the test of which this branch draft has already been subjected, and found to be wanting, for want of the signatures of the President and principal cashier or treasurer of the parent bank. They are received in point of fact; certainly not by virtue of law: if by the officers, of their own head, they commit an error, which may lead the country into danger by giving an undue credit to illegal paper; if by order of any functionary of the tederal gov ernment, that error is with him. Bills of exchange cannot be receiv til by the federal ofha crs; because tlu y cannot go erf to collect them, but must deposite what they receive monthlv ; and such a bill would lose its legal force over acceptors, indrrsers, ami drawers, and become the property of the hoUler without lecourse, for want of due diligence in pursuing his 1 ights. S. The 18th and 19th sectionsof the charter provides the penalties for counterfeiting the sureties of the Bank. It was to the tvst contain d in these sections that a draft of the kind in question was judicially subjected it. the State of Ohio, and the result of which has exploded this tremendous qmjtion of illegal curt ency upon the astounded sense of the community. As there h;.s been ajudicial decision, cendemning this species of bank piper, upon the test of these two sections. I shall be brief upon them; preferring, as the people theinsc Ucs will prefer, the solemn and eventful judgment of the court, delivered under an appalling sense of responsibility to the public, to my btiet and extrajudicial opinion. The hist of these two sections enacts, that countei feiting, passing or attempting to pas, any "bill or note issued bv order i f the President, Directors and Company of the Bui.k; or, any order ot check, on the said Bank or ai y Cashier thereof." shall be felony, &C '1 he second of the two sections enacts, that if any person shall engrave, or have in his possession, any metahc plate after the similitude of any plate from which any koti.s or BILLS, issued by order of said corporation, shall have been printed, ice, or shall hav e in his custody any blunk note or notes bul or bills, engraved and printed after the similitude of any notes or bills issued by said corporation, with intent ike, or shall have in his possission any paper adapted to the making bank note or bills of said corporation shall have beta lioucd, with, iutcnt, such peion

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snail oe sun.eci lo nr.c ana imprisonment, j ov.e . i ms is uie umy pare oi me Charter in which the words "checks, or orders on a:v cashier" are mentioned; and here they arc onlv mentioned in the first cf these two r.enal sections; and then evidently in contradistinction to the bills and notes issued by the corporation, and merely to coer the checks and orders which individuals and companies might draw on it. The omission of these two words in the second of these two sections is emphatic of the sense of both; it only includes the plates, the blanks, and the paper used by the Bank; not the plates, the blanks, and the paper used for checks and orders on the cashiers; for individuals were not expected to have peculiar plates, blanks . . . . . . rand paper for draw ing their current checks. I iNone nut an ok. Mailey Attorney could think of taking a position on these penal sections to justify the Bank, or its branches, in drawing checks and orders on their own cashier, and emitting them as the currency contemplated by the charter. On this test, t hedrafts in question were condemned in Ohio. and this description of paper left without j protection from counterfeiters; a eircumstance vvhich, in itself, would d:qu.dity it fur circulation. 9. The last test to which I shall sub ject this draft is to be found in the clause of the charter which authorizes the Bank to "deal and trade" in bills ol exchange. The 9th of the fundamental articles gives this right, and so far as this dealing and trading is confined to a bona fidebuying and scding ol biiU of exchange, there can be no legal ohjec lion to ihe exercise of the power. But the issue of these branch bank drafts, bv millions and millions of dollar s, is not a buying and selling of bids of exchange; but is an emission of paper money, and that upon credit; for no one is payable at the place issued; and a credit upon it is necessarily exacted until it can be presented in Philadelphia. The phrase, to deal in bills of exchange, is technical; it comes from tho kiLavj Merchant;' and must be conduC' td according to the custom of n.et chants; whif li custom has long since been made the law of the land I he highest character claimed for these drafts is, that they are, in substance bills ot exchange; and that is a total surrender ol the whole question which concerns the public. It ailmits that these drafts are not pavable'where issued, until ic fused in Philadelphia; and returned to the Branch indue time. It admits that instead ot being payable by law, wherever presented, they are only payable, and that contingently, at two places; it admits that they are not transferable by delivery; it admits that they are liable to be taken out ol the holder's handa if any previous holder came by them unlawfully; it admits that they are free from all the limitations, restrictions, guards and penalties which the constitution of the Bank contains for the safety ot the peo pie; and which have been shewn to be app icable to notes alone. It gives up the whole claim to a sound and uniform currency, payable every where, and e qual every where, and admits it to be an unsound and spurious currency, solely indebted lor itstempoiaty credit to voluntary payments at places where not payable by law, and to the error of the fede ral government in receiving it under the 1 4th section of the charter, to avoid the legal liabilities of which se ction, these irresponsible drafts were devised and con trivedi Ot this, more hereafter. I iepeat, then, that to admit these drafts to be, in substance, bills of exchange, is to give up the whole question as it concerns the public, and reserves nothing bu? the question which concerns the Bank in the I 'tfeitnie ol its charter. But 1 tJo r,ot admit them to be the bills of exchanged the Bank, either in lorm, in substance, or iu law. I take the clear ut U broad ground, that they ate unauthorized by the charter; by consequence that they are the individual orders of the gentlemen vvtio draw tUem; and that having the word order on their face, they are sub jsct to the law which governs bills of e x change. Every citizen knows enough of this law, to know that the order must be canied to the pei on on whi m it is drawn; if it is not paid, it must be broi back t- him who gave it, and if cither of these things is d laved an unreasonable time, the holder makes the oider his own Eety citizen knows this; and this is enough to condemn these drafts as a cir culating medium; but there is one essential particular which every or e does not know; which is, that what is reasonable, or unreasonable time, in the collec lion of these bills, and notice of non ac cepiance, or non payment is matter of law, lor the judge to decide, and not mat ter of fact, for the jury to try; and that the rigorous and inexorable law cf the judges has fixed these notices for the next posil I have now finished my examination into the legality ol these bank ordei s; but my duty to the public nd to the occacasion, does not permit me to stop here My task would be kit more than halt unfinished if 1 stopped at demonstrating the illegality of thi paper. My dutv itquircs me to advance into a new field, to lay open a new scene, to give an inside view of this cflair, and to shew the hka sons why these diafts have been inverted, and the objkct tor which they aie put into circulation to the exclusion of the promisory notes of the B-r k. To do thi 1 bU&ll have recouue to cvidci.ee,

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to this evidence, ai d to awaken your attention to the principal points in it. and to spare me the tremble ol o.n mcrtir.g upon it as I re?d, I will briefly narrate the fact as they re; and then ini kt )tu to judge by the evidence, ai d not by any thing which 1 say. 1 go back to the corrmrrcr mer t of opcritiors l.y the present Bank of the United .States, and rapidiy it view us three great points of history; its apparent picfcpciity at the star sudden ing-ulffjunt in the jaws of baokrupuy, and its apparent prosperity now. The Biik went into operation with tho beginning of the year 1817 established lii branches, half a dozer, of which in tho South and West, issued its own notes Itecly, und made large issues of iotts payable at a!l 1 heir brancht a 1 he c urse of trade carritd the branch notes of the South zvt) West to the Northeast; and nothing in the course of trade brought ihein b3ck. i hey were paysbic m all deritandi to the federal government merchants in Philadelphia. New York and Bostrn received Ihem in payroct of goods, and gave them not ba k again iu payment of Southern and Wes rn produce but to the collector of customs. Become the money of the goveinn.ent, the bank had to treat them as cash J Wo 14 h section of the charter made thtm renewable in all payments to the government, arid another clause required tho Bank to transfer the mone)s of the government to any point oideied; these two clauses, (the transfer clause being harmless without the receiving ue contained in the 14th section,) laid the 11 nt under obligation to cash ajl il.e iou of all the biancfcs wherever presenitd; for if she did not do it, she would be ordered to transfer the notes to the piaco where they were payable, and then to transfer the silver to the place where it was wanted; and both these opeiaiions she had to petform at her own expense. The Southern and Western branch notes flowed to the Northeast; the go d and silver of the South and West was ordered to follow them; and in a little while, the specie of the Souih and West was transferred to the Northeast; but the notes went faster on horses and in mail stages than the silver could po in wagons; and ihe parent bank in Philadel. phia, and the branches in New York and Boston, exhausted by the doube operation of providing for their own, aral tor Southern and Western branch notes besides, were on the point of stopping payment at the end of two yiars Mr. Cheves then came into the prc.sidci.iy; he stopped the issue of Southern and Western branch paper, and saved -he bank from insolvency ! Application a?j then made to congress to repeal the 14th seciinn of the charter, and thus itutvo the Bank from this ob igation to cash ,ts notes cveiy where Cor.grr8reft hedto do 90. Appiicatirn was made at tho same time to repeal a part of the !2th fundamental atucle of the cnnstitu'ion of the Bank, for the purpose i t relieving the President ar e! principal cashier of ihc parent bank from th labor ot Mp'i g the five and ten dollar notes. Cot,re$a refuted (hat cfifihe&tion also. And hero every thing itsttd whiic Mr Cht-ica continued president. The Southern and WcMei n brioches caused to do b;si-ess as banks; no bank notes or bills ero seen but those bearing the signatuics of ;he ptesident and his principal cast icr, and none oi these payable at St u f ern and Western branches 1 he profi , of the siockholders became inr.onsir'c-iab e; and the prospect of a renewed chatter W33 lost in the actual view id if:e inactivity and uselessntis of iht Bui-k in the South ind West Mr ( heves teti-ed. He withdie from af institution with he nad saved fiom bankruptcy, but f ich he C'-uld not render use fui to the Scutli and West; and th n er ?ued a set ol operations for rab.ir g he Bat k to do things which congress I ad refused 10 do for it; thai i to say, to avoid the opeiatiri. of the I4'h section, and s- n uch of the I 2th fundamental a'ticle as related 10 the signature ot the 1 otes and bills of the hac k. I fuse opera;if ns -t suited in rte invention ol the Planch Pank Drnfit 1 f.cse drafts, now fl odn g bc o-untry, circulating as rotes, arid considered eveiy where equal to go d ar d siUer, (because they are xoluntar ly cashed at every branch, ard erroneously jrreived at every land ejfTice and cus'em house) lave given to the Dink its present ar paient prosperity, its tc mporary popu'aii'y, at d i's titiusive cry e a sour d uniform enrrencv! 1 his is n.) nariativr ; Mitral!, ii g one it must be admitted; tut let it stand for nohir.g it not Mistaired Ly the proof Here, then is the proof ! '' Mr Curve's fir port Extracts 1822. "The Bardimrvcdiateiy uj e n its commencemcnt ciid a tty extti sic I.Luir i g, imported vast suns of specie, paid its r.o'cs 3nd those of the fficcrs, ( vi t r ut referer.ee to the place wf rrr trey veto p:abie) 8t the Bar k and all the principal r.fTiCts north o the Potomac; while they vcm (under the charter) necessarily iectUcd every vhrrc in pavment ed del ts to the po rrment of the Uni'ed Statrs; and drafts were given without limit ori the parer.t bank ardor the northern i ifi ccij by the western cilices, at par or