Mr. SPENCER, of N. Y., offered the following resolution:

"Resolved, That a committee be appointed to inspect the books and examine into the proceedings of the Bank of the United States, and to report whether the provisions of its charter have been violated or not; and, particularly, to report whether the instalments of the capital stock of the said bank have been paid in gold and silver coin, or in the funded debt of the United States; or whether they were, in any instance, and to what amount, paid by the proceeds of the notes of stockholders, discounted for that purpose; and also, to report the names of those persons who now own, or who have owned, any part of the capital stock of the said bank, and the amount of discounts, if any, to such persons, respectively, and when made; and also to report whether the said bank, or any of its offices of discount and deposite, have refused to pay the notes of the bank in specie, on demand, and have refused to receive in payment of debts due to them or either of them, the notes of the bank, and whether the bank or any of its offices of discount, or any of their officers or agents, have sold drafts upon other offices, or upon the bank, at an advance, and have received a premium for such drafts; also, the amount of the notes issued, payable at Philadelphia, and at each office of discount, respectively, and the amount of capital assigned to each office,together with the amount of the public deposites made at the bank and at each office, and an account of the transfers thereof; and the total amount of bills and notes discounted by the bank and its several offices since its organization. That the said committee have leave to meet in the city of Philadelphia, and to remain there as long as may be necessary; that they shall have power to send for persons and papers, and to employ the requisite clerks; the expense of which shall be audited and allowed by the Committee of Accounts, and paid out of the contingent fund of this House."

On the 30th of November, the resolution was agreed to by the House, and a committee appointed, consisting of Mr. Spencer, Mr. Lowndes, Mr. McLane, Mr. Bryan, and Mr. Tyler. Mr. Bryan was, at his request, afterwards excused, and Mr. Burwell substituted in his place. The result of the investigations of this committee appears in the following report, made to the House by Mr. SPENCER, on the 16th January, 1819:

The committee appointed to inspect the books, and to examine into the proceedings of the Bank of the United States, with directions to report thereon, and to report whether the provisions of its charter have been violated or not, respectfully report:

That, under the leave granted by this House, the committee repaired to Philadelphia, and there personally inspected the books of the bank; and as a further means of examining its proceedings, they interrogated, on oath, the president, the cashier, all the directors of the bank, whose attendance could be obtained, and several of its clerks and officers. Examinations also have been

made at the offices at Baltimore, at Richmond, and at the City of Washington, in order to obtain specific information upon certain subjects on which the books of the parent bank were necessarily deficient. From these inquiries, conducted with great labor, and, the committee trust, with great care, they have collected a mass of information which they now submit to the House, and which will be referred to in the course of this report. This information consists of tables, statements, and extracts, made by the committee from the books of the bank, or by them compared with those books and verified; and of the testimony of witnesses, and of letters from the president of the institution. The committee are aware that, from these sources of information, various important inferences may be drawn, and upon them the most interesting opinions may be predicated. It has been their intention, however, to go no farther than was required by the resolution of the House, to avoid speculative opinions upon general subjects, and to confine themselves to what they deemed practical objects of inquiry, which they settled among themselves, previous to entering upon the investigation.

These objects seemed to divide themselves into two classes; those which related to the general management of the bank and the conduct of its officers; and those which were connected with the question of a violation of its charter. As to the general management of the concerns of the institution, among the points of inquiry which appeared to be most immediately interesting, were those which related to the refusal of the bank and its offices to pay its notes in specie, at any other place than that where they were made payable, and to the practice of selling drafts on each other.

It appears that the directors of the bank, on its first institution, and up to the 28th of August, 1818, strenuously endeavored to redeem its notes at all its offices, indiscriminately, north of the city of Charleston. On the 7th day of January, 1817, it commenced operations by discounting notes on pledged stock, and to stockholders only, and by the issue of its bills. The officer then at the head of the Treasury Department, had repeatedly urged the commencement of operations, with the laudable view, as it appears, of hastening the redemption by the State banks, of their notes in specie. Vide letters from the Secretary of the Treasury to the president of the Bank of the United States, of the 15th August and 29th November, 1816, marked 1, 2. Efforts on the part of the treasury to induce the local banks to that measure, appear to have been abortive, until the Bank of the United States made certain propositions, which induced negotiations between it and the State institutions, which finally resulted in a compact contained in the resolutions of the board of directors, of the 31st January, 1817, herewith submitted, and marked 3. And in order to exhibit how far the bank complied with the compact, a statement of the loans made, and of notes issued, up to the 20th February, 1817, is submitted, marked 4.

It can be necessary only to refer to the state of the paper currency of the country at this period. The notes of the State banks were variously depreciated; some as much as twenty per cent., while others were at a premium. The excessive issue of paper by the local banks, had caused an unnatural and artificial depreciation of such paper, which required only time, and moderate, but steady reductions, to restore, not to an uniform par, but to its true value. Under these circumstances, the Bank of the United States had, on the last of February, 1817, (vide statement marked 5) $8,818,000 due to it from the State banks at Philadelphia, New York, and Baltimore. With such a credit, constantly accumulating by the transfer of the treasury furds, and by the payment of its second instalment in the notes of the State banks, it was in the power of the Bank of the United States to have coerced the local institutions into a moderate and reasonable reduction of their circulating notes. An attempt to do so was made by the compact, 3, and, although the Bank of the United States appears to have been anxious to effect the object, it did not per severe in this design. By its subsequent acts, it improvidently afforded a temptation, to the Western banks particularly, to extend their circulation of notes, by insisting on its branches paying out their own notes in preference to

those of the State banks, and on their delivering drafts on the eastern cities, whenever it could be done, to prevent the remittance of their own notes. The branch notes and the drafts issued in consequence of these instructions, were swept away by the facility of remittance thus unwarily given, as well as by the ordinary balance of trade. A vacuum in the circulation was thus produced, which could be supplied only by the local notes, which were readily received by the offices of the Bank of the United States, and were retained by them as a fund upon which interest was charged to the State banks. The letter of the president, marked 6, exhibits the course pursued by the bank in this respect.

The Bank of the United States received from the treasury the notes of the local institutions, in many cases, as special deposites, to be paid out in similar bills. From April, 1817, to this time, the amount so received, appears from statement 7, to be $2,752,750, of which 87,341 continues on hand, leaving $2,665,409 as the amount voluntarily assumed by the Bank of the United States. The committee have not found any evidence of the bank having attempted to oppress the State banks, either by wanton demands of specie, or by the rejection of their notes. Much complaint has, indeed, existed, but in the instances which have come to the knowledge of the committee, the State banks have been in the wrong, and some of them at the westward have refused the most equitable propositions of the bank, and have met its demands for its just dues, with complaints and reproaches. It was not intended to trouble the House with any of the various letters which have passed on that subject, but as the president of the bank transmitted a letter from the office at Charleston, exhibiting the conduct of the local banks at that place, it is presented to the House, marked 8.

The committee are of opinion that, instead of conducting with the alleged rigor towards the State banks, the Bank of the United States is liable to the more serious charge of having increased the amount of notes in circulation, by its acceptance of them in those places where it was known they would not be redeemed in specie, and by making them, in the manner beforementioned, the only circulating medium in that part of the country. Its forbearance to the State banks is vindicated on the ground of its being the only means to induce their resumption of specie payments. This effect, if really owing to that cause, has been proved to have been but temporary, and experience has shown that, at the same time, or soon after the refusal of the Bank of the United States to receive the notes of its offices, many of the State banks began to suspend and evade their specie payments.

So long as the notes of each office were payable at all the others, and the office issuing them was not exclusively liable for their redemption, the discounts at those places, against which there was a balance of trade, became larger in proportion to their indemnity against demands. As the notes of the offices were rapidly carried off, the payment of these discounts was necessarily made in the notes of the local institutions. And thus it was one inevitable effect of the old system, to increase the debts of the State banks to the offices of the Bank of the United States, at these places. The demands of the bank were suffered to accumulate improperly, instead of being gradually reduced, as specie was required at other offices, and in small quantities, that would not have been felt. Their reduction was not insisted upon sufficiently early; and, when the bank began to call for specie, its demands were so considerable as not only to expose the local banks, but the citizens in their vicinity, generally, to very severe pressure.

By substituting the credit of individuals for the payment of the second instalment, which will be presently stated, instead of coin or the notes of State banks, the Bank of the United States, in a great measure, deprived itself of the early and prompt check which the possession of those notes would have afforded, to the more extensive increase of local paper. In July, 1817, the debts due from the State banks are reduced to $3,972,000, while the notes of the Bank of the United States, in circulation, amounted to $4,754,000, by which it might have been subjected to embarrassments arising from the calls

of the local institutions. The committee think it evident, from this result, that the bank did not exercise, with sufficient energy, the power which it possessed and might have retained, but rather afforded inducements to the State banks to extend the amount of their circulating notes, and thus increased one of the evils it was intended to correct.

In answer to an inquiry, addressed by the committee, on this subject, to the president of the bank, they were furnished with his views, and a letter from the office at Boston, marked 9, and were referred to a report of the committee of directors, on the 28th August, 1818, marked 10. These documents exhibit the reasons of the bank for adopting the resolution of that date, by which the notes of the offices were refused acceptance. In the letter of the Boston office, much stress is placed upon the large accumulation of paper, and of drafts at Boston, issued by the southern and western offices, and this became an important object of inquiry. The books of the parent bank do not furnish information respecting the drafts made by and upon the offices, excepting those which were made on it. And the committee have not ascertained their amount except at the offices in Baltimore and this city. From the local situation of Baltimore, the statements obtained at that office, marked 11, 12, may be considered as furnishing sufficient proof of the correctness of the opinion express ed by the Boston office. To the office at Boston, its debt fluctuated between 34,000 and 215,000 dollars, until May last, since which it has been indebted to Baltimore from 500 to 57,000 dollars. Its debt to the office at New York has varied from 100,000 to 1,947,000 dollars, and, until October last, it has generally owed that office more than 1,500,000 dollars. At that time the New York office was brought in debt to Baltimore 97,278 dollars; its debt in November last was 10,948 dollars. The explanation of these extraordinary reductions of the Baltimore debts is given from the circumstances of treasury drafts on the North being delivered directly to the Baltimore office, or sent to it through the office at this city; and, by a check on New York for more than a million, given by the parent bank in payment of foreign bills of exchange, hereinafter mentioned. The Baltimore debt to the parent bank has varied from 1,500,000 to 9,000,000 of dollars, and has generally exceeded 6,000,000. Notwithstanding these heavy debts to New York, Boston, and Philadelphia, the drafts of the Baltimore office on those places continued uninterrupted and excessive in amount. That office was originally supplied with notes to the amount of 872,000 dollars, and had returned to it from Philadelphia 1,697,000 dollars in its notes, and yet it is stated by the teller, that it never had a sufficient quantity of notes to meet its demands; that they did not remain twentyfour hours in the office, but were constantly remitted to the North, with the drafts which it issued. And there can be no doubt, on a comparison of the statements referred to, connected with these facts, that the drafts from Baltimore, given for the proceeds of notes discounted, were unwarrantably large, and much more than the balance of trade required. In a letter of the president, dated June 27, 1817, to that office, he observes, "the directors, considering (among other things mentioned) the low state of the specie and individual deposites at your office, and the magnitude of your discounts, and those at this bank, as well for Baltimore as this place, and the very inadequate and disproportioned amount of discounts to which the office at New York has been restricted, in consequence of the daily and excessive drafts from your office and this bank, which has become the subject of just animadversion," direct that the then amount of discounts should not be exceeded. The same language is held in other letters, 12, 14. But it terminated in unavailing remonstrances; the Baltimore office continued its drafts and its discounts, and drained the specie from the Northern offices. And such was the want of firmness, or of foresight, in the parent board, that, after finding its repeated remonstrances disregarded, it never removed one of the offending directors, and took no effectual step to control them, until the adoption of the general resolutions of August 28, 1818, forbidding the offices to draw on each other. The effect of these excessive drafts on the northern offices was, to compel the constant remittance of specie there; to cripple them in all their operations;

to limit their discounts to a trifling amount; to cause the revenue paid there, and which would itself have been a capital for business, to be drawn southward; thus compelling them to deny to the debtors of the Government any indulgence or accommodation in their payments; to bring those offices into debt with the State banks; to produce a general depression of credit, and a severe pressure for money. Those places were, in fact, made tributary to Baltimore, and all their means and energies were required to supply its extravagant issues.

A sudden reduction of the Baltimore debt to the northern offices, appears to have taken place in March and April last, and, within a few months past, those offices have been brought in debt to it. This is accounted for by the cashier of that office, by saying, that it arose principally from treasury drafts, and by the sales of foreign bills of exchange. Drafts were given by the treasury, in some instances, and to considerable amounts, directly to Baltimore, on the northern offices, and, in other instances, such drafts went through the office in this city. It is not to be presumed that those drafts were given by the treasury with a knowledge of all the circumstances, or with a view to draw the revenue collected at the north to Baltimore, merely to aid that office in paying its debts. Yet such was the effect; and, although it enabled Baltimore to continue its large discounts, it impoverished the northern offices, and the cities where they were established were made to feel the pressure. The Baltimore debt to the parent bank will be found to have regularly increased with the reduction of its debts to the other offices, until it remitted 1,007,000 dollars in bills of exchange on London, which remittance is connected, by the testimony of J. W. McCulloch, Esq. with the negotiation explained in the letter of the President, 15. The loan which resulted from that negotiation was on a pledge of stock, that had been pledged at Baltimore. The bank assumed it, and received the bills of exchange, and paid for them by giving a check on the New York office for the amount, at the time the Baltimore office was indebted to the parent bank more than six millions of dollars.

It might have been supposed, that the pressure of the Baltimore office upon those more north, was owing to its being pressed by the southern and western offices. The fact will, however, appear from the table 11, that, until September last, it was indebted to the office at Lexington; that the debts of Cincinnati, Chillicothe, and Louisville to it, were small in amount, and that the only office which has constantly owed it, is New Orleans, and that not to a large amount until lately.

From these facts it would seem to result, that the embarrassments of the Bank of the United States, in receiving the notes of all its offices, did not arise so much from the fair and ordinary balance of trade which might have been calculated and provided for, as from the excessive discounts granted at some of the offices, particularly Baltimore and Philadelphia, and the drafts conse quent upon those discounts which were made upon the other offices. From the correspondence of the bank with its offices, it is obvious that this was the opinion of the directors and the officers; it is distinctly assigned as one of the grounds for refusing the notes of the offices, in the report of the committee. 10; and it is more strongly urged in the letter of the Boston office, submitted and adopted by the president, 9, and is eloquently enforced in several of his let

ters.

This committee is not prepared to say that an uniformly equal currency could have been maintained by the bank, under the most auspicious circumstances; they are inclined to the opinion, that such an attempt would be hopeless. But they consider its abandonment at the time, as having been produced by the causes before stated. The efforts of the bank to meet the payment of its notes at all its offices, north of Charleston, were certainly great, and particularly at New York and Boston, as will appear from the resolutions marked 16, and the account of specie remitted, 17. The relinquishment of the attempt was involuntary and reluctant.

From the testimony of the cashier and tellers of the bank, of the teller of the Bank of North America, and of the cashier and teller of the office at Bal