It was therefore incumbent upon me, in discharging my official duties, to act upon the assumption, that this corporation would not continue in being after the time above specified. And in this state of things, without any reference to the manner in which the Bank has conducted itself, it became necessary to decide whether the deposites ought to remain in the Bank until the end of its corporate life, or be removed at some earlier period. In forming my opinion on this subject, I could only inquire which of these measures would most conduce to the public good.
It is obvious, that the interests of the country would not be promoted, by permitting the deposites of the public money to continue in the Bank until its charter expired. Judging from the past, it is highly probable that they will always amount to several millions of dollars. It would evidently produce serious inconvenience, if such a large sum were left in possession of the Bank until the last moment of its existence; and then be suddenly withdrawn, when its immense circulation is returning upon it, to be redeemed, and its private depositors removing their funds into other institutions. The ability of the Bank, under such circumstances, to be prompt in its payments to the Government, may be well doubted, even if the ultimate safety of the deposites could be relied upon. Besides, the principal circulating medium now in the hands of the people, and the one most commonly used in the exchanges between distant places, consists of the notes of the Bank of the United States and its numerous branches. The sudden withdrawal of its present amount of circulation, or its sudden depreciation, before any other sound and convenient currency was substituted for it, would certainly produce extensive evils, and be sensibly felt among all classes of society.
It is well understood that the superior credit heretofore enjoyed by the notes of the Bank of the United States, was not founded on any particular confidence in its management or solidity. It was occasioned altogether by the agreement on behalf of the public in the act of incorporation, to receive them in all payments to the United States; and it was this pledge on the part of the Government which gave general currency to the notes payable at remote Branches. The same engagement, in favour of any other monied institution, would give its notes equal credit, and make them equally convenient for the purposes of commerce. But this obligation on the part of the United States, will cease on the 3d of March, 1836, when the charter expires; and as soon as this happens, all the outstanding notes of the Bank will lose the peculiar value they now possess, and the notes payable at distant places become as much depreciated as the notes of local Banks. And if, in the mean time, no other currency is substituted in its place by common consent, it is easy to foresee the extent of the embarrassment which would be caused by the sudden derangement of the circulating medium. It would be too late at that time to provide substitute, which would ward off the evil. The notes of the Bank of the United States in circulation on the second of September last, which was the date of the latest return before me when the order for removal was given, amounted to $18,413,287 07, scattered in every part of the United States. And if a safe and sound currency were immediately provided, on the termination of the charter, to take the places of these notes, it would still require time, to bring it into general use, and in the interim, the people would be subjected to all the inconveniences and losses which necessarily arise from an unsound state of the currency. The evil would be to great and the distress so general, that it might even compel Congress, against its wishes, to re-charter the Bank; and perhaps more effectual means could hardly be devised, for insuring the renewal of the charter. It is evident that the state of things so much to be deprecated can only be avoided by timely preparation, and the continuance of the deposites can only be justified by the determination to renew the charter. The State Banks can, I have no doubt, furnish a general circulating medium, quite as uniform in value, as that which has been afforded by the Bank of the United States. Probably more so. For it is well known, that in some of the cities, the Branches of the Bank have been in the habit, whenever they thought proper, of refusing to honour the notes of their own Bank, payable at other Branches, when they were not offered in discharge of a debt due to the United States. But a currency founded on the notes of State Banks could not be suddenly substituted for that heretofore furnished by the Bank of the United States, and take the place of it at the same moment, in every part of the Union. It is essential that the change should be gradual; and sufficient time should be allowed to suffer it to make its way by the ordinary operations of commerce, without requiring a hasty and violent effort.
In this view of the subject, it would be highly injudicious to suffer the deposites to remain in the Bank of the United States until the close of its corporate existence. And as they cannot be withdrawn without the action of the Secretary of the Treasury, it must unavoidably become his duty at some period of time, to exercise the power of removal. Laying aside, therefore, for the present, all the considerations which the misconduct of the Bank has furnished, the question presented to this department was, how long could the removal be delayed consistently with the public interests? It is a question of time only. The duty must be performed at some period; and could not be altogether omitted, without justly incurring a heavy responsibility to the community, for all the consequences that might follow. And it is, I think, apparent that the measure was delayed as long as was compatible with the interests of the people of the United States.
The monthly statement of the Bank of the second of September last, before referred to, shows that the notes of the Bank and its branches then in circulation amounted to $18,413,287 07, and that its discounts amounted to the sum of $62,653,359 59. The immense circulation above stated, pervading every part of the United States, and most commonly used in the business of commerce, between distant places, must all be withdrawn from circulation, when the charter expires. If any of the notes then remain in the hands of individuals remote from the branches at which they are payable, their immediate depreciation will subject the holders to certain loss. Those payable in the principal commercial cities, would perhaps retain nearly their nominal value; but this would not be the case with the notes of the interior branches, remote from the great marts of trade; and the statements of the Bank will show that a great part of its circulation is composed of notes of this description. The Bank would seem to have taken pains to introduce into common use such a description of paper, as it could depreciate or raise to its par value, as best suited to its own views; and it is of the first importance to the interest of the public, that these notes should all be taken out of circulation before they depreciate in the hands of the individuals who hold them; and they ought to be withdrawn gradually, and their places supplied, as they retire, by the currency which will become the substitute for them. How long will it require for the ordinary operations of commerce, and
