SENATE.] Bank of the United States-Illegal Currency. [JANUARY, 1832. The gentleman from Missouri, in referring back | true sense of the charter upon a disputed point. to the documents this morning, states the aver- He made his resolution joint in its character, age expenditures, for some years back, at nine that it might have the action of both Houses of millions; the Senator from Maryland gives the Congress, and single in its object, that the main average of the few last years at twelve mil- design might not be embarrassed with minor lions; and that Senator himself, only a few propositions. The form of the resolution gave days ago, set down the future average at fifteen him a right to state his reasons for asking leave millions. And yet we are gravely told our ex- to bring it in; the importance of it required penses are not increasing. those reasons to be clearly stated. The Senate, also, has its rights and its duties. It is the right of the Senate and House of Representatives, as the founder of the bank corporation, Bank of the United States-Illegal Currency.ings, and to take cognizance of the infractions to examine into the regularity of its proceed FRIDAY, January 20. Mr. BENTON rose to ask leave to introduce the following resolution, of which he had given notice some days ago, viz: A joint resolution declaratory of the meaning of the charter of the Bank of the United States on the subject of the paper currency to be is sued by the Bank. of its charter; and this right has become a duty, since the very tribunal selected by the charter to try these infractions had tried this very question, and that without the formality of a scire facias, or the presence of the adverse party, and had given judgment in favor of the corporation; a decision which he (Mr. B.) was Be it resolved by the Senate and House of Repre- compelled, by the strongest convictions of his sentatives of the United States of America in Con-judgment, to consider both as extra-judicial gress assembled, That the paper currency, in the form of orders, drawn by the presidents of the offices of discount and deposit on the cashier of the Bank of the United States, is not authorized by any thing contained in the charter, and that the said currency is, and is hereby declared to be, illegal, and that the same ought to be suppressed. and erroneous. The resolution, continued Mr. B., which I am asking leave to bring in, expresses its own object. It declares against the legality of these orders, AS A CURRENCY. It is the currency which I arraign. I make no inquiry, for I will not embarrass my subject with irrelevant and Mr. BENTON rose to ask leave to bring in his immaterial inquiries-I make no inquiry into promised resolution on the state of the cur- the modes of contract and payment which are rency. He said he had given his notice for the permitted, or not permitted, to the Bank of the leave he was about to ask, without concerting United States, in the conduct of its private dealor consulting with any member of the Senate. ings and individual transactions. My business The object of his resolution was judicial, not lies with the currency; for, between public political; and he had treated the Senators, not currency and private dealings, the charter of as counsellors, but as judges. He had con- the bank has made a distinction, and that versed with no one, neither friend nor adver- founded in the nature of things, as broad as sary; not through contempt of counsel, or fear lines can draw, and as clear as words can exof opposition, but from a just and rigorous re- press. The currency concerns the public; and gard to decorum and propriety. His own the soundness of that currency is taken under opinion had been made up through the cold, the particular guardianship of the charter; a unadulterated process of legal research; and special code of law is enacted for it: private he had done nothing, and would do nothing, to dealings concern individuals; and it is for indiprevent, or hinder, any other Senator fromviduals, in making their bargains, to take care making up his opinion in the same way. It of their own interests. The charter of the was a case in which politics, especially partisan Bank of the United States has authorized, but politics, could find no place; and in the prog- not regulated, certain private dealings of the ress of which every Senator would feel himself bank; it is full and explicit upon the regulation retiring into the judicial office-becoming one of currency. Upon this distinction I take my of the judices selecti-and searching into the stand. I establish myself upon the broad and stores of his own legal knowledge, for the judg-clear distinction which reason makes, and the ment and the reasons of the judgment which he must give in this great cause, in which a nation is the party on one side, and a great moneyed corporation on the other. He (Mr. B.) believed the currency, against which his resolution was directed, to be illegal and dangerous; and so believing, it had long been his determination to bring the question of its legality before the A preliminary inquiry might have been reSenate and the people; and that without re- sorted to, and was for some time intended, to gard to the powerful resentment, to the effects know from the bank directory whether these of which he might be exposing himself. He orders were issued as a currency under the had adopted the form of a declaratory resolu- charter, and what exemptions were claimed for tion, because it was intended to declare the them from the restrictions provided in the charter sanctions. I arraign the currency! I eschew all inquiry into the modes of making bargains for the sale or purchase of bills of exchange, buying and selling gold or silver bullion, building houses, hiring officers, clerks, and servants, purchasing necessaries, or laying in supplies of fuel and stationery. JANUARY, 1832.] Bank of the United States-Illegal Currency. charter, for a currency of promissory notes. Here is the opinion, that part of it which lates to these orders as a currency; for I omit all that relates to the trial of the prisoner for the counterfeiting one of these orders. [Here follows the opinion of the court, argumentatively delivered to sustain its correctness.] After reading the extracts, Mr. B. continued. I take the substance of this decision, Mr. President, to be 1. That these branch bank orders are legal currency, under the charter of the Bank of the United States. 2. That the bank may lawfully issue this description of currency to the whole amount of its capital stock. [SENATE. stitution of the bank, to its cautious prohibitory preamble, and to its seventeen fundamental articles. I make it in the name and upon the behalf of the lawful rights of other parts of the charter. Let us now proceed to the examination; and, first, let us read this 18th section, the whole of it, as the only fair way to find its meaning. not [The section read.] I do deny, Mr. President, that any power, of any kind, is given to the bank by this section. It is a mere provision to punish the violation of existing rights. So far as the issues of bills or notes are mentioned, it is a recital of what the bank was authorized to do in the 12th funre-damental article of its constitution; so far as checks and orders are mentioned, it is a recital of the pre-existing right which every depositor possesses. The object of the section is to prothe chartered right of the bank to issue bills or vide for the security of existing rights; namely, and the inherent right of depositors to draw for their own money. This is the object of the section; and the violation of either of these rights is made felony. Both rights are protected, but they are not granted; neither are they confounded. The distinction is clear between them, between the currency which is to issue from the bank, and the orders which are to be drawn upon it. The separation is complete, the contrast is perfect, the antithesis is regular, the contradistinction is manifest, between these two classes of paper. The whole frame of the section, the structure of every member of the long sentence which composes it, the natural and obvious meaning of every word in every sentence, establishes and defends this clear and emphatic distinction. Five times in five different members of the sentence, the same form of expression, the same order of construction, and the same repetition of words regularly occur. Five times the line is drawn, the distinction is set up, between the bills or notes which are to be issued by order of the bank, and the checks and orders which are to be drawn upon it. The two classes of paper are kept distinct, and cannot be confounded. Let any gentleman try. Let him include, if he can, the words "checks and orders" under the action of the verb which governs the issuing of the bills or notes of the bank. The thing cannot be done. It is a grammatical impossibility. I repeat it, the clear, undoubted object of the section is, not to grant powers, but to protect rights. Its object is penal, not concessive; to punish, not to grant. 3. That this currency is free from every regulation, restriction, limitation, and provision, contained in the charter, except the single limitation as to the maximum amount to be issued, to wit, thirty-five millions of dollars. 4. That the bank may employ what agents she pleases in signing and issuing this currency. I take this to be the substance of the 'decision. Justice to that decision, and the fair conducting of my own argument, will require me to examine the grounds upon which the court proceeded. These grounds are found in two clauses of the charter; one clause in the 18th section; the other in the 8th fundamental article of the constitution of the bank. The penal clause in the 18th section against counterfeiting "checks or orders," and the phrase "other contract," in the 8th fundamental article, comprise those grounds. I will examine each in its turn; but must first make a stand in the name of all that is safe and sure in the administration of law, protesting, as I do hereby protest, against going into a penal section, or into the construction of a phrase, to find a power to issue currency, and that without restrictions, when the charter had given that power in the proper place in express words, and subject to numerous and vital restrictions. I make this protest, not from the least apprehension of finding in a penal clause, or in the construction of a detached phrase, the great power for the exercise of which the bank was created, that of issuing a paper currency to the people of these States, but as an act of justice to the con This is my view, Mr. President, of the 18th section. Does any gentleman doubt the correctness of that view? Then let him follow me into the next section-the 19th-still occupied with the crime of counterfeiting, and taking up the inchoate class of offences involved in the process of perpetrating the crime. The authorized currency of all banks, in all countries, is protected from the process, from the SENATE.] Bank of the United States-Illegal Currency. progressive course, of being counterfeited, as well as from the consummation of the crime itself; but this protection is never extended to private and individual papers. A man is punished for having in his possession, with intent to use it unlawfully, the plate from which bank notes are struck, the notes themselves in blank, and even the kind of paper which is used for bank notes. Not so in the case of private or individual writings. The reason is obvious. Banks have peculiar plates and papers for their notes which are to constitute currency; neither individuals nor banks, have any thing peculiar for their private and individual writings. The plate and paper with which a bank note is to be counterfeited, can be known and identified as such; the goose quill pen, the common types, and the common writing paper, which are used for all the ordinary transactions of life, cannot be known or identified. Upon this distinction turns all the law upon the subject of punishing the inchoate offence of counterfeiting; upon this distinction turns the 19th section of the charter; upon this distinction it is that the currency of the bank, its bills or notes, are protected from the process of being counterfeited, and the orders and checks of depositors are not noticed. Listen to the section. [The section read.] What fatuity, or unkindness, in the framers of this charter! What inattention to this constructive currency, created in the 18th section, and abandoned in the 19th! Eight times the bills or notes, issued by order of the bank, are named and protected. Eight times the checks and orders are passed over without a word. No protection for them against the process of being counterfeited. The plates, the blanks, the paper, for their imitation, may be paraded in the face of the world. The whole process may be carried on in the face of the bank; and no legal authority to interrupt the forgers, to seize their unfinished work, or to arrest their persons. Can any thing be more emphatic of the sense of the Congress which framed the charter? Could words be more expressive than this silence? Could a positive declaration fix these checks and orders more completely in the class of those private writings which have no peculiar plates, no blanks, no peculiar paper? The second ground on which the court relied, is the phrase," other contract," as used in the 8th fundamental article of the constitution of the bank. In resorting to this phrase, the court has at least got into the right chapter, but missed the verse; it has got into the constitution; it has got among the seventeen articles; but it has not got to the article which grants powers, but the one which recites, and that for the purpose of limitation, the powers which are elsewhere expressly granted. To crown this error, the court has again had recourse to construction, and has given an import and meaning to the phrase "other contract," which [JANUARY, 1832. it cannot be made to endure, either in common parlance, or in legal acceptation, nor without reducing the rest of the charter to a blank. We will read the article. [The article read.] What is the meaning of this article? Is it to grant authority to the bank to make bonds, issue bills or notes, and form other contracts? No, sir; authority to do all these things is elsewhere granted, namely, in the 12th fundamental article, to make bonds and issue bills or notes; in the tenth section, to form other contracts in dealing and trading in bullion and bills of exchange; and in other places, to do other things. The manifest object of this eighth section is to prohibit the bank from owing more debts, at one time, on all these accounts, than the amount of the capital stock; and to make the directors personally liable if they exceeded that amount. The words "other contract" were evidently intended to include the individual dealings of the bank; to add its private debts to its public ones; and to limit the whole to the amount of its capital. Will any person undertake to derive the right of the bank to make bonds, and issue bills or notes, upon the recital of the names of these instruments in this eighth article, and then argue that they are free from all limitations, except the single one as to maximum amount found in that article? Certainly not, and yet this would be the precise mode of reasoning with respect to the phrase "other contract," if it is to be treated as a grant of power, instead of a reference to the various contracts for bullion, bills of exchange, buildings, salaries, expenses, &c., which the bank was elsewhere authorized to make, and for the form or terms of which contracts the charter nowhere made any regula tions or provisions. I repeat it, bonds, bills, or notes, are merely recited in this article for the purpose of adding a new limitation and a new penalty; reference to other contracts is made for the purpose of including them in the same limitation, and subjecting them to the same penalty. This is the construction which satisfies the phrase; which gives it a full and natural operation, and that without conflicting with any other part of the charter, much less reducing all the rest to a blank. I have given to this phrase, Mr. President, the meaning which fairly and naturally belongs to it, and which harmonizes it with every other part of the charter. This is what the books tell us it is the duty of courts to do in construing statutes. I will now take three specific objections to the court's construction, and show it to be erroneous in every point of view in which it can be examined: 1. I object to it because it authorizes an issue of currency upon construction. The issue of currency, sir, was the great and main business for which the bank was created, and which it is, in the twelfth article, expressly authorized to perform; and I cannot pay so poor a com JANUARY, 1832.] Bank of the United States-Illegal Currency. pliment to the understandings of the eminent men who framed that charter, as to suppose that they left the main business of the bank to be found, by construction, in an independent phrase, and that phrase to be found but once in the whole charter. I cannot compliment their understandings with the supposition that, after having authorized and defined a currency, and subjected it to numerous restrictions, they had left open the door to the issue of another sort of currency, upon construction, which should supersede the kind they had prescribed, and be free from every restriction to which the prescribed currency was subject. 2. I object to the court's assumption that these orders are contracts; and this objection leads to a definition, and to the recollection of our early reading, when we were apprentices to the law. What is a contract? The books tell us it is an agreement, upon a sufficient consideration, to do, or not to do, a particular thing. Now, bring these orders to the test of this definition; and for that purpose let us read one: "Cashier of the Bank of the United States, Pay to Jas. L. Smith, or order, five dollars. Office of discount and deposit in Utica, "N. V. GRAZIER, Cashier." JAS. L. SMITH." Here is no agreement, sir! No consideration expressed or understood; no promise or undertaking to do, or not to do, any thing whatever. It is literally an order, such as one neighbor gives to another, and governed by the same law. It is the very opposite of a contract, for it is a command; it is the opposite of a debt, for it implies the extinction of one. It is a mandate, and that an imperious one, from a gentleman in Utica, whose name I cannot read, to a gentleman in Philadelphia, who is not named at all, to pay five dollars to Mr. Jas. L. Smith, or to the person he shall name. Call this a contract? If so, Mr. President, those who studied law twenty-five years ago must burn their books, and recommence in the new school. The only species of contract that can attach to it is in the implied one which the law creates between the giver and receiver of the order; and that is an implied promise, on the part of the giver, that he will pay it if the cashier in Philadelphia does not, provided the receiver of the order will lose no time in going after the money, and bringing the order back if he does not get it. [SENATE. to the Bank of the United States a constitution, with a preamble to it, and seventeen fundamental articles in it; and if the bank has construed itself out of this congressional constitution, it may seem to some to be an act of retributive justice on the Congress for construing itself out of the Constitution of the United States to give a constitution to the bank. We will see. The preamble stands at the head of the eleventh section, and runs thus: [The limitations, restrictions, and provisions of the charter all read.] Now, Mr. President, if there is any power in words, any virtue in language, any force or strength in legal enactments, any capacity in the Congress of the United States to bind the Bank of the United States; if the sarcasm of the Scythian is not true of this young republic as well as of the old monarchies to which it was applied, that laws are cobwebs, which catch the weak flies, and let the strong ones go through, then are these orders excluded from all revenue payments to the United States. Let us recapitulate. Let us sum up the points of incompatibility between the characteristics of this currency, and the requisites of the charter: let us group and contrast the frightful features of their flagrant illegality. 1. Are they signed by the president of the bank and his principal cashier? They are not! 2. Are they under the corporate seal? Not at all! 3. Are they drawn in the name of the corporation? By no means! 4. Are they subject to the double limitation of time and amount in case of credit? They are not; they may exceed sixty days' time, and be less than one hundred dollars. 5. Are they limited to the minimum size of five dollars? Not at all! 6. Are they subject to the supervision of the Secretary of the Treasury? Not in the least! 7. The prohibition against suspending specie payments? They are not subject to it! 8. The penalty of double interest for delayed payment? Not subject to it! 9. Are they payable where issued? Not at all, neither by their own terms, nor by any law applicable to them! 10. Are they payable at other branches? So far from it, that they were invented to avoid such payment! 11. Are they transferable by delivery? No; by endorsement! 12. Are they receivable in payment of public dues? So far from it, that they are twice excluded from such payments by positive enactments! Are the directors liable for excessive issues? Not at all! 14. Has the holder a right to sue at the branch which issues the order? No, sir, he has a right to go to Philadelphia, and sue This finishes, Mr. President, the examination the directors there! a right about equivalent which I have felt it proper to make into the to the privilege of going to Mecca to sue the grounds of the decision pronounced by the fed- successors of Mahomet for the bones of the eral court in Philadelphia. I will now take up prophet! Fourteen points of contrariety and the constitution of the bank, and bring this difference. Not a feature of the charter in the constructive currency to the ordeals of prohi- faces of these orders. Every mark, a contrast; bitions, as well as of the grants to be found in ever lineament, a contradiction; all announcthat instrument. The Congress of 1816 gaveing, or rather denouncing, to the world the 13. SENATE.] Bank of the United States-Illegal Currency. [JANUARY, 1832. positive fact of a spurious progeny; the incon- | character, and to condemn them as a circulattestable evidence of an illegitimate and bastard issue. I have now, Mr. President, brought this branch bank currency to the test of several provisions in the charter, not all of them, but a few which are vital and decisive. The currency fails at every test; and upon this failure I predicate an argument of its total illegality. Thus far I have spoken upon the charter and have proved that if this currency can prevail, that instrument, with all its restrictions and limitations, its jealous, prohibitory constitution, and multiplied enactments for the safety of the public, is nothing but a blank piece of paper in the hands of the bank. I will now have recourse to another class of argumentsa class extrinsic to the charter, but close to the subject-indispensable to fair examination, and directly bearing upon the illegal character of this currency. 1. In the first place, I must insist that these orders cannot possibly serve for currency, because they are subject to the law of endorsable paper. The law which governs all such paper is too universally known to be enlarged upon here. Presentation for acceptance and payment, notice of default in either, prompt return of the dishonored paper, and all this with rigorous punctuality, and a loss of recourse for the slightest delay at any point, are the leading features of this law. Now it is too obvious that no paper subject to the law of endorsement can answer the purposes of circulation. It will die on the hands of the holders while passing from one to another, instead of going to the place of payment. Now it is incontestable that these orders are instruments negotiable by endorsement, and by endorsement alone. Whether issued under the charter, or under the general laws of the land, they are still subject to the law of endorsable paper. They are the same in either case as if drawn by one citizen upon another. And this is a point which I mean to make clear: for many worthy people believe there is some peculiar law for bank paper, which takes it out of the operation of the general laws of the land. Not so the fact. The twelfth fundamental article of the bank constitution declares that the bills or notes to be issued by the bank shall be negotiable in the same manner as if issued by a private person; that is to say, those payable to a named person or his order, by endorsement, in like manner and with the like effect as foreign bills of exchange; and those made payable to bearer shall be negotiable by delivery alone; in the same manner, we may add, as a silver dollar. So much for these orders, if drawn under the charter; if not drawn under it, they are then issued under the general law of the land or without any law at all. Taken either under the charter or out of it, it comes to the same point, namely, that these orders are subject to the same law as if drawn by one private person This is enough to fix their upon another. ing medium; it is enough for the people to know; for every citizen knows enough of law to estimate the legal value of an unaccepted order, drawn upon a man five hundred or one thousand miles off! But it has the word bearer on the back! Yes, sir, and why not on the face as easily as on the back? Our schooltime acquaintance, Mr. President, the gentleman from Cork, with his coat buttoned behind, had a sensible, and, I will add, a lawful reason for arraying himself in that grotesque habiliment; but what reason can the bank have for putting bearer on the back of the order, where it has no effect upon its negotiable character, and omitting it on the face, where it would have governed that character, and secured to the holder all the facilities for the prompt and easy recovery of the contents of a paper transferable by mere delivery? The only effect of this preposterous or cunning endorsement must be to bamboozle the ignorant-pardon the low word, sir-to bamboozle the ignorant with the belief that they are handling a currency which may at any time be collected, without proof, trouble, or delay, while in reality it is a currency which reserves to the bank all the legal defences which can be set up to prevent the recovery of a parcel of old, unaccepted, unpresented, unauthorized bills of exchange. 2. I take a second exception to these orders as a currency. It is this, that being once paid, they are done with. A note transferable by delivery, may be reissued, and its payment demanded again, and so on forever. But a bill of exchange, or any paper subject to the same law with a bill of exchange, is incapable of reissue, and is payable but once. The payment once made, extinguishes the debt; the paper which evidenced it is dead in law, and cannot be resuscitated by any act of the parties. That payment can be pleaded in bar to any future action. This law applies to checks and orders as well as to bills of exchange; it applies to bank checks and orders as well as to those of private persons, and this allegation alone would annihilate every pretension of these branch bank orders to the character of currency. 3. I take a third objection to this construetive currency. It is this, that these orders are not evidenced by any act or sign which can import the assent of the corporators to their issue, or bind the corporate effects for the payment of money. The Bank of the United States is a corporation aggregate; it is composed of various members; and the assents of these members can only be evidenced, and their effects bound, by modes of acting known to the law. The common seal is the evidence of assent at common law; signatures of natural persons are sometimes, and in some instances, substituted by statute. Thus it is with the Bank of the United States. The seal is to be used in some cases; signatures in others. Bonds are to be sealed, not signed; bills or notes are to be signed, not sealed. The common seal is the |