Having carefully and anxiously considered all the facts and arguments, which have been submitted to him, relative to a removal of the public deposits from the bank of the United States, the president deems it his duty, to communicate in this manner to his cabinet the final conclusions of his own mind, and the reasons on which they are founded, in order to put them in durable form, and to prevent misconceptions.
[The paper then reviews the controversy with the bank, and particularly the efforts to obtain a renewal of the charter, and continues :]
The power of the secretary of the treasury over the deposits is unqualified. The provision that he shall report his reasons to congress, is no limitation. Had it not been inserted, he would have been responsible to congress, had he made a removal for any other than good reasons, and his responsibility now ceases, upon the rendition of sufficient ones to congress. The only object of the provision, is to make his reasons accessible to congress, and enable that body the more readily to judge of their soundness and purity, and thereupon to make such further provision by law as the legislative power may think proper in relation to the deposit of the public money. Those reasons may be very diversified. It was asserted by the secretary of the treasury without contradiction, as early as 1817, that he had power "to control the proceedings' of the bank of the United States at any moment, "by changing the deposits to the state banks," should it pursue an illiberal course towards those institutions; that " the secretary of the treasury will always be disposed to support the credit of the state banks, and will invariably direct transfers from the deposits of the public money in aid of their legitimate exertions to maintain their credit," and he asserted a right to employ the state banks when the bank of the United States should refuse to receive on deposit the notes of such state banks as the public interest required should be received in payment of the public dues. In several instances he did transfer the public deposits to state banks, in the immediate vicinity of branches, for reasons connected only with the safety of those banks, the public convenience and the interests of the treasury.
If it was lawful for Mr. Crawford, the secretary of the treasury at that time, to act on these principles, it will be difficult to discover any sound reason against the application of similar principles in still stronger cases. And it is a matter of surprise that a power which, in the infancy of the bank, was freely asserted as one of the ordinary and familiar duties of the secretary of the treasury, should now be gravely questioned, and attempts made to excite and alarm the public mind as if some new and unheard of power was about to be usurped by the executive branch of the government.
It is but a little more than two and a half years to the termination of the charter of the present bank. It is considered as the decision of the country that it shall then cease to exist, and no man, the president believes, has reasonable ground for expectation that any other bank of the United States will be created by Congress.... It is obvious that any new system which may be substituted in the place of the bank of the United States, could not be suddenly carried into effect on the termination of its existence without serious inconvenience to the government and the people. Its vast amount of notes are then to be redeemed and withdrawn from circulation, and its immense debt collected. These operations must be gradual, otherwise much suffering and distress will be brought upon the community. It ought to be not a work of months only, but of years, and the president thinks it cannot, with due attention to the interests of the people, be longer postponed. It is safer to begin it too soon than to delay it too long.
It is for the wisdom of Congress to decide upon the best substitute to be adopted in the place of the bank of the United States; and the president would have felt himself relieved from a heavy and painful responsibility if in the charter of the bank, congress had reserved to itself the power of directing at its pleasure, the public money to be elsewhere deposited, and had not devolved that power exclusively on one of the executive departments.... But as the president presumes that the charter to the bank is to be considered as a contract on the part of the government, it is not now in the power of congress to disregard its stipulations; and by the terms of that contract the public money is to be deposited in the bank, during the continuance of its charter, unless the secretary of the treasury shall otherwise direct....
The responsibility is thus thrown upon the executive branch of the government, of deciding how long before the expiration of the charter, the public interests will require the deposits to be placed elsewhere.... and it being the duty of one of the executive departments to decide in the first instance, subject to the future action of the legislative power, whether the public deposits shall remain in the bank of the United States until the end of its existence, or be withdrawn some time before, the president has felt himself bound to examine the question carefully and deliberately in order to make up his judgment on the subject: and in-his
Opinion the near approach of the termination of the charter, and the public considerations heretofore mentioned, are of themselves amply sufficient to justify the removal of the deposits without reference to the conduct of the bank, or their safety in its keeping....
[An examination of the charges against the bank follows.]
It has been alleged by some as an objection to the removal of the deposited that the bank has the power, and in that event will have the disposition, to destroy the state banks employed by the government, and bring distress upon the country. It has been the fortune of the president to encounter dangers which were represented as equally alarming, and he has seen them vanish before resolution and energy.... The president verily believes the bank has not the power to produce the calamities its friends threaten. The funds of the government will not be annihilated by being transferred. They will immediately be issued for the benefit of trade, and if the bank of the United States curtails its loans, the state banks, strengthened by the public deposited will extend theirs. What comes in through one bank, will go out through others, and the equilibrium will be preserved. Should the bank, for the mere purpose of producing distress, press its debtors more heavily than some of them can bear, the consequences will recoil upon itself, and in the attempts to embarrass the country, it will only bring loss and ruin upon the holders of its own stock. But if the president believed the bank possessed all the power which has been attributed to it, his determination would only be rendered the more inflexible. If, indeed, this corporation now holds in its hands the happiness and prosperity of the American people, it is high time to take the alarm. If the despotism be already upon us, and our only safety is in the mercy of the despot, recent developments in relation to his designs and the means he employs, show how necessary it is to shake it off. The struggle can never come with less distress to the people, or under more favorable auspices than at the present moment.
All doubts as to the willingness of state banks to undertake the service of the government, to the same extent, and on the same terms, as it is now performed by the banks [bank] of the United States, is put to rest by the report of the agent recently employed to collect information; and from that willingness, their own safety in the operation may be confidently inferred....
From all these considerations the president thinks that the state banks ought immediately to be employed in the collection and disbursement of the public revenue, and the funds now in the bank of the United States drawn out with all convenient despatch....
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In conclusion the president must be permitted to remark that he looks upon the pending question as of higher consideration than the mere transfer of a sum of money from one bank to another. Its decision may affect the character of our government for ages to come.... Viewing it as a question of transcendent importance, both in the principles and consequences it involves, the president could not, in justice to the responsibility which he owes to the country, refrain from pressing upon the secretary of the treasury, his view of the considerations which impel to immediate action. Upon him has been devolved by the constitution and the suffrages of the American people, the duty of superintending the operation of the executive departments of the government, and seeing that the laws are faithfully executed. In the performance of this high trust, it is his undoubted right to express to those whom the laws and his own choice have made his associates in the administration of the government, his opinion of their duties under circumstances as they arise. It is this right which he now exercises. Far be it from him to expect or require, that any member of the cabinet should at his request, order or dictation, do any act which he believes unlawful, or in his conscience condemns. From them and from his fellow citizens in general, he desires only that aid' and support, which their reason approves and their conscience sanctions.
In the remarks he has made on this all important question, he trusts the secretary of the treasury will see only the frank and respectful declarations of the opinions which the president has formed on a measure of great national interest, deeply affecting the character and usefulness of his administration; and riot a spirit of dictation, which the president would be as careful to avoid, as ready to resist. Happy will he be, if the facts now disclosed produce uniformity of opinion and unity of action among the members of the administration.
The president again repeats that he begs his cabinet to consider the proposed measure as his own, in the support of which he shall require no one of them to make a sacrifice of opinion or principle. Its responsibility has been assumed, after the most mature deliberation and reflection, as necessary to preserve the morals of the people, the freedom of the press and the purity,of the elective franchise, without which all will unite in saying that the blood and treasure expended by our forefathers in the establishment of our happy system of government will have been vain and fruitless. Under these convictions, he feels that a measure so important to the American people cannot be commenced too soon; and he therefore names the first day of October next, as a period proper for the change of the deposits, or sooner, provided the necessary arrangements with the state banks can be made.