Chapter CVI

ATTEMPTED INVESTIGATION OF THE BANK OF THE UNITED STATES.

The House of Representatives had appointed a select committee of its members to investigate the affairs of the Bank of the United States--seven in number, and consisting of Mr. Francis Thomas, of Maryland; Mr. Edward Everett, of Massachusetts; Mr. Henry A. Muhlenberg, of Pennsylvania; Mr. John Y. Mason, of Virginia; Mr. W. W. Ellsworth, of Connecticut; Mr. Abijah Mann, Jr. of New-York; Mr. Robert T. Lytle, of Ohio. The authority under which the committee acted, required them to ascertain: 1. The causes of the commercial embarrassment, and the public distress complained of in the numerous distress memorials presented to the two Houses during the session; and whether the bank had been any way instrumental, through its management or money, in producing the distress and embarrassment, of which so much complaint was made. 2. To inquire whether the charter of the bank had been violated; and what corruptions and abuses, if any, had existed in its management. 3. To inquire whether the bank had used its corporate power, or money, to control the press, to interpose in politics, or to influence elections. The authority conferred upon the committee was ample for the execution of these inquiries. It was authorized to send for persons and papers; to summon and examine witnesses on oath; to visit, if necessary, the principal bank, and its branches; to inspect the books, correspondence and accounts of the bank, and other papers connected with its management. The right of the House to make this investigation was two-fold: _first_, under the twenty-third article of the charter: _secondly_, as the founder of the corporation; to whom belongs, in law language, the right to "visit" the institution it has founded; which "visiting" is for examination--as a bishop "visits" his diocese--a superintendent "visits" the works and persons under his care; not to see them, but to examine into their management and condition. There was also, a _third_ right of examination, resulting from the act of the corporation; it was again soliciting a re-charter, and was bound to show that the corporators had used their actual charter fairly and legally before it asked for another. And, _fourthly_, there was a further right of investigation, still resulting from its conduct. It denied all the accusations brought against it by the government directors, and brought before Congress by the Secretary of the Treasury; and joined issue upon those accusations in a memorial addressed to the two Houses of Congress, To refuse examination under these circumstances would be shrinking from the issue which itself had joined. The committee proceeded to Philadelphia, and soon found that the bank did not mean to submit to an examination. Captious and special pleading objections were made at every step, until attempts on one side and objections on the other ended in a total refusal to submit their books for inspection, or themselves for an examination. The directors had appointed a company of seven to meet the committee of the House--a procedure unwarranted by any right or usage, and offensive in its pretentious equality; but to which the committee consented, at first, from a desire to do nothing to balk the examination. That corporation committee was to sit with them, in the room in the bank assigned for the examination; and took care always to pre-occupy it before the House committee arrived; and to act as if at home, receiving guests. The committee then took a room in a hotel, and asked to have the bank books sent to them; which was refused. They then desired to have the books subjected to their inspection in the bank itself; in which request they were baffled, and defeated. The bank committee required written specification of their points of inquiry, either in examining a book, or asking a question--that it might judge its legality; which they confined to mere breaches of the charter. And when the directors were summoned to answer questions, they refused to be sworn, and excused themselves on the ground of being parties to the proceeding. Some passages from the committee's report will show to what extent this higgling and contumacy was carried by this corporation--deriving its existence from Congress, and endeavoring to force a renewed charter from it while refusing to show how it had used the first one. Thus:

"On the 23d of April, their chairman addressed to the President
of the bank, a communication, inclosing a copy of the resolution
of the House of Representatives, and notifying him of the
readiness of the committee to visit the bank on the ensuing
day, at any hour agreeable to him. In reply, the President
informed the committee that the papers thus received should be
submitted to the board of directors, at a special meeting to
be called for that purpose. It appears, in the journal of the
proceedings of the committee, herewith presented to the House,
that this was done, and that the directors appointed a committee
of seven of their board, to receive the committee of the House
of Representatives, and to offer for their inspection such books
and papers of the bank, as may be necessary to exhibit the
proceedings of the corporation, according to the requirement of
the charter. In the letter of John Sergeant, Esq., as chairman
of the committee of directors communicating the proceedings of
the board, he says that he was directed to inform the chairman
of this committee that the committee of the directors 'will
immediately direct the necessary arrangements to be made for the
accommodation of the committee of the House of Representatives,'
and would attend at the bank to receive them the next day, at
eleven o'clock. Your committee attended, and were received by
the committee of directors.

"Up to this period, nothing had occurred to justify the belief
that a disposition was felt, on the part of the managers of
the bank, to embarrass the proceedings of the committee, or
have them conducted differently from those of the two preceding
committees of investigation. On assembling, however, the next
morning, at the bank, they found the room which had been offered
for their accommodation, preoccupied by the committee of the
board, with the president of the bank, as an _ex officio_
member, claiming the right to be present at the investigations
and examinations of this committee. This proceeding the
committee were not prepared to expect. When the appointment of
the committee of seven was first made, it was supposed that that
measure, however designed, was not well calculated to facilitate
the examination.

"With a previous determination to be present when their books
were to be inspected, they could have waited to avow it until
these books were called for, and the attempt made to inspect
them in their absence. These circumstances are now reviewed,
because they then excited an apprehension, which the sequel
formed into conviction, that this committee of directors
had been appointed to supervise the acts and doings of your
committee, and to limit and restrain their proceedings, not
according to the directions contained in the resolution of the
House, but the will and judgment of the board of directors. Your
committee have chosen to ascribe this claim of the committee of
directors to sit conjointly with them, to the desire to prevent
them from making use of the books and papers, for some of the
purposes pointed out by the resolution of the House. They are
sensible that this claim to be present at all examinations,
avowed prematurely, and subsequently persisted in with peculiar
pertinacity, could be attributed to very different motives;
but respect for themselves, and respect for the gentlemen
who compose the committee of directors, utterly forbids the
ascription to them of a feeling which would merit compassion and
contempt much more than resentment.

"This novel position, voluntarily and deliberately taken by
the committee of the directors, predicated on an idea of
equality of rights with your committee, under your resolution,
rendered it probable, and in some measure necessary, that your
committee should express its opinions of the relative rights
of the corporation and the House of Representatives. To avoid
all misunderstanding and future misrepresentations, it was
desirable that each question should be decided separately.
Contemplating an extended investigation, but unwilling that
an apprehension should exist of improper disclosures being
made of the transactions of the bank and its customers your
committee, following the example of the committee of 1832,
adopted a resolution declaring that their proceedings should be
confidential, until otherwise ordered by the committee, and also
a resolution that the committee would conduct its investigations
'without the presence of any person not required or invited
to attend.' A copy of these resolutions was furnished to the
committee of directors, in the hope that the exclusive control
of a room at the bank, during its hours of business, would
thereafter be conceded to your committee, while the claim of
the committee of directors to be present when the books were
submitted for inspection, should be postponed for decision, when
the books were called for and produced by them.

"On the 28th ult. this committee assembled at the banking
house, and again found the room they expected to find set apart
for their use, preoccupied by the committee of directors, and
others, officers of the bank. And instead of such assurances
as they had a right to expect, they received copies of two
resolutions adopted by the board of directors, in which they
were given to understand that their continued occupation of
the room must be considered a favor and not a matter of right;
and in which the board indulge in unjust commentaries on the
resolution of the House of Representatives; and intimate
an apprehension that your committee design to make their
examinations secret, partial, unjust, oppressive and contrary to
common right."

On receiving this offensive communication, manifestly intended to bring on a quarrel, the committee adopted a resolution to sit in a room of their hotel, and advised the bank accordingly; and required the president and directors to submit the books to their inspection in the room so chosen, at a day and hour named. To this the directors answered that they could not comply; and the committee, desirous to do all they could to accomplish the investigation committed to them, then gave notice that they would attend at the bank on a named day and hour to inspect the books in the bank itself--either at the counter, or in a room. Arriving at the appointed time, and asking to see the books, they were positively refused, reasons in writing being assigned for the refusal. They then made a written request to see certain books specifically and for a specified purpose, namely, to ascertain the truth of the report of the government directors in using the money and power of the bank in politics, in elections, or in producing the distress. The manner in which this call was treated must be given in the words of the report itself; thus:

"Without giving a specific answer to these calls for books
and papers, the committee of directors presented a written
communication, which was said to be 'indicative of the mode of
proceeding deemed right by the bank.'

"The committee of the board in that communication, express the
opinion, that the inquiry can only be rightfully extended to
alleged violations of the charter, and deny virtually the right
of the House of Representatives to authorize the inquiries
required in the resolution.

"They also required of the committee of investigation, 'when
they asked for books and papers, to state specifically in
writing, the purposes for which they are proposed to be
inspected; and if it be to establish a violation of the charter,
then to state specifically in writing, what are the alleged or
supposed violations of charter, to which the evidence is alleged
to be applicable.'

"To this extraordinary requirement, made on the supposition
that your committee were charged with the duty of crimination,
or prosecution for criminal offence, and implying a right on
the part of the directors to determine for what purposes the
inspection should be made, and what books or papers should
be submitted to inspection, your committee replied, that
they were not charged with the duty of criminating the bank,
its directors, or others; but simply to inquire, amongst
other things, whether any prosecution in legal form should
be instituted, and from the nature of their duties, and the
instructions of the House of Representatives, they were not
bound to state specifically in writing any charges against
the bank, or any special purpose for which they required the
production of the books and papers for inspection."

The committee then asked for copies of the accounts and entries which they wished to see, and were answered that it would require the labor of two clerks for ten months to make them out; and so declined to give the copies. The committee finding that they could make nothing out of books and papers, determined to change their examination of things into that of persons; and for that purpose had recourse to the subpoenas, furnished by the House; and had them served by the United States marshal on the president and directors. This subpoena, which contained a clause of _duces tecum_, with respect to the books, was so far obeyed as to bring the directors in person before the committee; and so far disobeyed as to bring them without the books, and so far exceeded as to bring them with a written refusal to be sworn--for reasons which they stated. But this part deserves to be told in the language of the report; which says:

"Believing they had now exhausted, in their efforts to execute
the duty devolved upon them, all reasonable means depending
solely upon the provisions of the bank charter, to obtain the
inspection of the books of this corporation, your committee
were at last reluctantly compelled to resort to the subpoenas
which had been furnished to them under the seal of this House,
and attested by its clerk. They, thereby, on the 9th inst.
directed the marshal of the eastern district of Pennsylvania to
summon Nicholas Biddle, president, and thirteen other persons,
directors of the bank, to attend at their committee room, on the
next day, at twelve o'clock, at noon, to testify concerning the
matters of which your committee were authorized to inquire, and
to bring with them certain books therein named for inspection.
The marshal served the summons in due form of law, and at the
time appointed, the persons therein named appeared before the
committee and presented a written communication signed by each
of them, as the answer of each to the requirements of the
subpoena, which is in the appendix to this report. In this paper
they declare 'that they do not produce the books required,
because they are not in the custody of either of us, but as has
been heretofore stated, of the board,' and add, 'considering
that as corporators and directors, we are parties to the
proceeding--we do not consider ourselves bound to testify, and
therefore respectfully decline to do so.'"

This put an end to the attempted investigation. The committee returned to Washington--made report of their proceedings, and moved: "That the speaker of this House do issue his warrant to the sergeant-at-arms, to arrest Nicholas Biddle, president--Manuel Eyre, Lawrence Lewis, Ambrose White, Daniel W. Cox, John Holmes, Charles Chauncey, John Goddard, John R. Neff, William Platt, Matthew Newkirk, James C. Fisher, John S. Henry, and John Sergeant, directors--of the Bank of the United States, and bring them to the bar of this House to answer for the contempt of its lawful authority." This resolve was not acted upon by the House; and the directors had the satisfaction to enjoy a negative triumph in their contempt of the House, flagrant as that contempt was upon its own showing, and still more so upon its contrast with the conduct of the same bank (though under a different set of directors), in the year 1819. A committee of investigation was then appointed, armed with the same powers which were granted to this committee of the year 1834, and the directors of that time readily submitted to every species of examination which the committee chose to make. They visited the principal bank at Philadelphia, and several of its branches. They had free and unrestrained access to the books and papers of the bank. They were furnished by the officers with all the copies and extracts they asked for. They summoned before them the directors and officers of the bank, examined them on oath, took their testimony in writing--and obtained full answers to all their questions, whether they implied illegalities violative of the charter, or abuses, or mismanagement, or mistakes and errors.