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Special Message

March 11, 1834

To the Senate:

I renominate Henry D. Gilpin, Peter Wager, and John T. Sullivan, of Philadelphia, and Hugh McEldery, of Baltimore, to be directors in the Bank of the United States for the year 1834.

I disclaim all pretension of right on the part of the President officially to inquire into or call in question the reasons of the Senate for rejecting any nomination whatsoever. As the President is not responsible to them for the reasons which induce him to make a nomination, so they are not responsible to him for the reasons which induce them to reject it. In these respects each is independent of the other and both responsible to their respective constituents. Nevertheless, the attitude in which certain vital interests of the country are placed by the rejection of the gentlemen now renominated require of me frankly to communicate my views of the consequences which must necessarily follow this act of the Senate if it be not reconsidered.

The characters and standing of these gentlemen are well known to the community, and eminently qualify them for the offices to which I propose to appoint them. Their confirmation by the Senate at its last session to the same offices is proof that such was the opinion of them entertained by the Senate at that time, and unless something has occurred since to change it this act may now be referred to as evidence that their talents and pursuits justified their selection. The refusal, however, to confirm their nominations to the same offices shows that there is something in the conduct of these gentlemen during the last year which, in the opinion of the Senate, disqualifies them, and as no charge has been made against them as men or citizens, nothing which impeaches the fair private character they possessed when the Senate gave them their sanction at its last session, and as it, moreover, appears from the Journal of the Senate recently transmitted for my inspection that it was deemed unnecessary to inquire into their qualifications or character, it is to be inferred that the change in the opinion of the Senate has arisen from the official conduct of these gentlemen. The only circumstances in their official conduct which have been deemed of sufficient importance to attract public attention are the two reports made by them to the executive department of the Government, the one bearing date the 22d day of April and the other the 19th day of August last, both of which reports were communicated to the Senate by the Secretary of the Treasury with his reasons for removing the deposit.

The truth of the facts stated in these reports is not, I presume, questioned by anyone. The high character and standing of the citizens by whom they were made prevent any doubt upon the subject. Indeed, the statements have not been denied by the president of the bank and the other directors. On the contrary, they have insisted that they were authorized to use the money of the bank in the manner stated in the two reports, and have not denied that the charges there made against the corporation are substantially true.

It must be taken, therefore, as admitted that the statements of the public directors in the reports above mentioned are correct, and they disclose the most alarming abuses on the part of the corporation and the most strenuous exertions on their part to put an end to them. They prove that enormous sums were secretly lavished in a manner and for purposes that can not be justified, and that the whole of the immense capital of the bank has been virtually placed at the disposal of a single individual, to be used, if he thinks proper, to corrupt the press and to control the proceedings of the Government by exercising an undue influence over elections.

The reports are made in obedience to my official directions, and I herewith transmit copies of my letters calling for information of the proceedings of the bank. Were they bound to disregard the call? Was it their duty to remain silent while abuses of the most injurious and dangerous character were daily practiced? Were they bound to conceal from the constituted authorities a course of measures destructive to the best interests of the country and intended gradually and secretly to subvert the foundations of our Government and to transfer its powers from the hands of the people to a great moneyed corporation? Was it their duty to sit in silence at the board and witness all these abuses without an attempt to correct them, or, in case of failure there, not to appeal to higher authority? The eighth fundamental rule authorizes any one of the directors, whether elected or appointed, who may have been absent when an excess of debt was created, or who may have dissented from the act, to exonerate himself from personal responsibility by giving notice of the fact to the President of the United States, thus recognizing the propriety of communicating to that officer the proceedings of the board in such cases. But independently of any argument to be derived from the principle recognized in the rule referred to, I can not doubt for a moment that it is the right and the duty of every director at the board to attempt to correct all illegal proceedings, and, in case of failure, to disclose them, and that every one of them, whether elected by the stockholders or appointed by the Government, who had knowledge of the facts and concealed them, would be justly amenable to the severest censure.

But in the case of the public directors it was their peculiar and official duty to make the disclosures, and the call upon them for information could not have been disregarded without a flagrant breach of their trust. The directors appointed by the United States can not be regarded in the light of the ordinary directors of a bank appointed by the stockholders and charged with the care of their pecuniary interests in the corporation. They have higher and more important duties. They are public officers. They are placed at the board not merely to represent the stock held by the United States, but to observe the conduct of the corporation and to watch over the public interests. It was foreseen that this great moneyed monopoly might be so managed as to endanger the interests of the country, and it was therefore deemed necessary as a measure of precaution to place at the board watchful sentinels, who should observe its conduct and stand ready to report to the proper officers of the Government every act of the board which might affect injuriously the interests of the people.

The whole frame of the charter, as well as the manner of their appointment, proves this to be their true character. The United States are not represented at the board by these directors merely on account of the stock held by the Government. The right of the United States to appoint directors and the number appointed do not depend upon the amount of the stock, for if every share should be sold and the United States cease to be a stockholder altogether, yet under the charter the right to appoint five directors would still remain. In such a case what would be the character of the directors? They would represent no stock and be chosen by no stockholders. Yet they would have a right to sit at the board, to vote on all questions submitted to it, and to be made acquainted with all the proceedings of the corporation. They would not in such a case be ordinary directors chosen by the stockholders in proportion to their stock, but they would be public officers, appointed to guard the public interest, and their duties must conform to their office. They are not the duties of an ordinary director chosen by a stockholder, but they are the peculiar duties of a public officer who is bound on all occasions to protect to the utmost of his lawful means the public interests, and, where his own authority is not sufficient to prevent injury, to inform those to whom the law has confided the necessary power. Such, then, is the character and such are the duties of the directors appointed by the United States, whether the public be stockholders or not. They are officers of the United States, and not the mere representatives of a stockholder.

The mode of their appointment and their tenure of office confirm this position. They are appointed like other officers of the Government and by the same authority. They do not hold their offices irrevocably a year after their appointment; on the contrary, by the express terms of the law, they are liable to be removed from office at any time by the President when in his judgment the public interest shall require it. In every aspect, therefore, in which the subject can be considered it is evident that the five directors appointed by the United States are to be regarded as public officers who are placed there in order to observe the conduct of the corporation and to prevent abuses which might otherwise be committed.

Such being the character of the directors appointed on behalf of the United States, it is obviously their duty to resist, and in case of failure to report to the President or to the Secretary of the Treasury, any proceedings of the board by which the public interests may be injuriously affected. The President may order a scire facias against the bank for a violation of its charter, and the Secretary of the Treasury is empowered to direct the money of the United States to be deposited elsewhere when in his judgment the public interest requires it to be done. The directors of this bank, like all others, are accustomed to sit with closed doors, and do not report their proceedings to any department of the Government. The monthly return which the charter requires to be made to the Treasury Department gives nothing more than a general statement of its pecuniary condition, and of that but an imperfect one; for although it shows the amount loaned at the bank and its different branches, it does not show the condition of its debtors nor the circumstances under which the loans were made. It does not show whether they were in truth accommodations granted in the regular and ordinary course of business upon fair banking principles or from other motives. Under the name of loans advances may be made to persons notoriously insolvent for the most corrupt and improper purposes, and a course of proceeding may be adopted in violation of its charter, while upon the face of its monthly statement everything would appear to be fair and correct.

How, then, is the executive branch of the Government to become acquainted with the official conduct of the public directors or the abuses practiced by the corporation for its private ends and in violation of its duty to the public? The power of displacing the public directors and that of issuing a scire facias and of removing the deposits were not intended to be idle and nugatory provisions without the means of enforcement. Yet they must be wholly inoperative and useless unless there be some means by which the official conduct of the public directors and the abuses of power on the part of the corporation may be brought to the knowledge of the executive department of the Government.

Will it be said that the power is given to the Secretary of the Treasury to examine himself, or by his authorized agent, into the conduct and condition of the bank? The answer is obvious. It could not have been expected or intended that he would make an examination unless information was first given to him which excited his suspicions; and if he did make such a general examination without previous information of misconduct, it is most probable that in the complex concerns and accounts of a bank it would result in nothing, whatever abuses might have been practiced.

It is, indeed, the duty of every director to give information of such misconduct on the part of the board. But the power to issue a scire facias and to remove the deposits presupposes that the directors elected by the stockholders might abuse their power, and it can not be presumed that Congress intended to rely on these same directors to give information of their own misconduct. The Government is not accustomed to rely on the offending party to disclose his offense. It was intended that the power to issue a scire facias and remove the deposits be real and effective. The necessary means of information were therefore provided in the charter, and five officers of the Government, appointed in the usual manner, responsible to the public and not to the stockholders, were placed as sentinels at the board, and are bound by the nature and character of their office to resist, and if unsuccessful to report to the proper authority, every infraction of the charter and every abuse of power, in order that due measures should be taken to punish or correct it; and in like manner it is their duty to give, when called upon, any explanation of their own official conduct touching the management of the institution.

It was perhaps scarcely necessary to present to the Senate these views of the power of the Executive and of the duties of the five directors appointed by the United States. But the bank is believed to be now striving to obtain for itself the government of the country, and is seeking by new and strained constructions to wrest from the hands of the constituted authorities the salutary control reserved by the charter; and as misrepresentation is one of its most usual weapons of attack, I have deemed it my duty to put before the Senate in a manner not to be misunderstood the principles on which I have acted.

Entertaining as I do a solemn conviction of the truth of these principles, I must adhere to them and act upon them with constancy and firmness. Aware as I now am of the dangerous machinations of the bank, it is more than ever my duty to be vigilant in guarding the rights of the people from the impending danger. And I should feel that I ought to forfeit the confidence with which my countrymen have honored me if I did not require regular and full reports of everything in the proceedings of the bank calculated to affect injuriously the public interests from the public directors; and if the directors should fail to give the information called for, it would be my imperious duty to exercise the power conferred on me by law of removing them from office and of appointing others who would discharge their duties with more fidelity to the public. I can never suffer anyone to hold office under me who would connive at corruption or who should fail to give the alarm when he saw the enemies of liberty endeavoring to sap the foundations of our free institutions and to subject the free people of the United States to the dominion of a great moneyed corporation.

Any directors of the bank, therefore, who might be appointed by the Government would be required to report to the Executive as fully as the late directors have done, and more frequently, because the danger is more imminent; and it would be my duty to require of them a full detail of every part of the proceedings of the corporation, or any of its officers, in order that I might be enabled to decide whether I should exercise the power of ordering a scire facias, which is reserved to the President by the charter, or adopt such other lawful measures as the interests of the country might require. It is too obvious to be doubted that the misconduct of the corporation would never have been brought to light by the aid of a public proceeding at the board of directors. The board when called on by the Government directors refused to institute an inquiry or require an account, and the mode adopted by the latter was the only one by which the object could be attained. It would be absurd to admit the right of the Government directors to give information and at the same time deny the means of obtaining it. It would be but another mode of enabling the bank to conceal its proceedings and practice with impunity its corruptions. In the mode of obtaining the information, therefore, and in their efforts to put an end to the abuses disclosed, as well as in reporting them, the conduct of the late directors was judicious and praiseworthy, and the honesty, firmness, and intelligence which they have displayed entitle them, in my opinion, to the gratitude of the country.

But if I do not mistake the principles on which the Senate have recently rejected them, the conduct which I deem worthy of praise they treat as a breach of duty, and in their judgment the measures which they took to obtain the informations and their efforts to put an end to the practices disclosed and the reports they have made to the Executive, although true in all their parts, are regarded as an offense and supposed to require some decisive mark of strong disapprobation.

If the views of the Senate be such as I have supposed, the difficulty of sending to the Senate any other names than those of the late directors will be at once apparent. I can not consent to place before the Senate the name of anyone who is not prepared with firmness and honesty to discharge the duties of a public director in the manner they were fulfilled by those whom the Senate have refused to confirm. If for performing a duty lawfully required of them by the Executive they are to be punished by the subsequent rejection of the Senate, it would not only be useless, but cruel, to place men of character and honor in that situation, if even such men could be found to accept it. If they failed to give the required information or to take proper measures to obtain it, they would be removed by the Executive. If they gave the information and took proper measures to obtain it, they would upon the next nomination be rejected by the Senate. It would be unjust in me to place any other citizens in the predicament in which this unlooked-for decision of the Senate has placed the estimable and honorable men who were directors during the last year.

If I am not in error in relation to the principles upon which these gentlemen have been rejected, the necessary consequence will be that the bank will hereafter be without Government directors, and the people of the United States must be deprived of their chief means of protection against its abuses, for whatever conflicting opinions may exist as to the right of the directors appointed in January, 1833, to hold over until new appointments shall be made, it is very obvious that whilst their rejection by the Senate remains in force they can not with propriety attempt to exercise such a power. In the present state of things, therefore, the corporation will be enabled effectually to accomplish the object it has been so long endeavoring to attain. Its exchange committees and its delegated powers to its president may hereafter be dispensed with without incurring the danger of exposing its proceedings to the public view. The sentinels which the law had placed at its board can no longer appear there.

Justice to myself and to the faithful officers by whom the public has been so well and so honorably served without compensation or reward during the last year has required of me this full and frank exposition of my motives for nominating them again after their rejection by the Senate. I repeat that I do not question the right of the Senate to confirm or reject at their pleasure, and if there had been any reason to suppose that the rejection in this case had not been produced by the causes to which I have attributed it, or if my views of their duties and the present importance of their rigid performance were other than they are, I should have cheerfully acquiesced and attempted to find others who would accept the unenviable trust; but I can not consent to appoint directors of the bank to be the subservient instruments or silent spectators of its abuses and corruptions, nor can I ask honorable men to undertake the thankless duty with the certain prospect of being rebuked by the Senate for its faithful performance in pursuance of the lawful directions of the Executive.

I repeat that I do not claim a right to inquire into or officially to censure the acts of the Senate, but the situation in which the important interests of the American people vested in the Bank of the United States and affected by its arrangements must necessarily be left by the rejection of the gentlemen now renominated has made it my duty to give this explanation to the Senate and submit the matter to their reconsideration. If it shall be determined by the Senate that all channels of information in relation to the corrupt proceedings of this dangerous corporation shall be cut off and the Government and country left exposed to its unrestrained machinations against the purity of the press and public liberty, I shall, after having made this effort to avert so great an evil, rest for the justification of my official course with respectful confidence on the judgment of the American people.

In conclusion it is proper I should inform the Senate that there is now no Government director appointed for the present year, Mr. Bayard, who was nominated, and confirmed by the Senate, having refused to accept that appointment.


Andrew Jackson, Special Message Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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