viz: Two of fanded debt, and one of guilder bills. The vouchers for the 1st, marked A, were sent forward the 24th of April, acknowledged the 26th, and a check for the amount of $143,810 52, promised upon New York. The vouchers for the second, marked B, are still imperfect, the certificates not yet found to enable a transfer to be made, but I hope they may soon be; however, interest will be collected for the Treasury, on the amount from 1st April, and I enclose a bill of parcels to establish a sale by the Mechanics' Bank to me, for your account current, at 99 per cent. the amount $50,000, cost $49,500. This I cannot expect to receive from the Treasury until the certificates are delivered. The 3d, marked C, is for guilder bills already sent forward with bills of parcels receipted. The amount of this $8,885 57 I should likewise be glad to receive in check on New York. But the place of payment you will select to suit yourself, without regard to any thing hitherto said about it; and in so doing, you will best please Your obliged and obt. servant, The Hon. WM. H. CRAWFORD, JAMES W. M'CULLOH, Cashier. Secretary of the Treasury, Washington. Bank of the United States, May 30th, 1817. SIR: The Board of Directors having submitted to counsel, the question which has arisen as to the redeemable quality of the two millions 6 per cent. funded debt of the United States, subscribed to the Bank, and authorized by the Board to be sold in London, as stated in my letter of — inst. I have now the honor, by direction of the Board, to submit to your consideration a copy of my letter to counsel, and of their answer. I have the honor to be, Your most obedient servant, W. JONES, Prest. The Hon. W. H. CRAWFORD, Secretary of the Treasury. Bank of the United States, May 17, 1817. GENTLEMEN: The conditions upon which the funded debt of the United States, subscribed to the Bank of the United States, shall be redeemable when sold by the Bank in a foreign country, has become a question of considerable interest. The certificates of the debt, as issued from the loan offices to the Bank, upon the transfer of the stock subscribed, bear on their face the original conditions in relation to their redemption, and would be transferred to a purchaser in the same form. The Bank is authorized to sell, in a foreign country. not more than two millions of dollars in any one year; and this, without reference to the Secretary of the Treasury, as in case of stock sold within the United States. The Directors have never doubted that, so long as the stock so subscribed remained the property of the Bank, it would be redeemable at the will of the Government: but that, in the event of a sale within the limits prescribed by the charter, the purchaser, and his assignees, would possess certificates of stock, nowise differing from those of the same description which were not subscribed to the Bank. It is not perceived that the Government could, with equity, refuse to recognize the conditions on the face of its own obligation, and refer a foreign creditor, who had confided in its good faith, to a rigid construction of the words of the charter. If such reference shall ap pear to be valid, it would seem to have been obligatory upen the Government so to express it upon the face of the certificates of the stock which has been transferred to the Bank. How far the omission to do this may invalidate the claim of the Government to redeem at pleasure the stock which may thus be sold, I will not pretend to say. These are the views which the Board of Directors has acted upon, and I will mention to you, in confidence, that two millions of six per cent. funded debt, belonging to the Bank, were sent by Mr. Sergeant, and that he has authority to sell the said stock, upon such conditions, in relation to the payment of the interest accruing thereon, as may involve the Bank in the imputation of a want of candor, or subject it to the possible loss which may arise from an equitable compromise with the purchaser, if the literal construction of the act shall prevail. The views of the Board have been fortified by those of Mr. Sergeant, who suggested the conditions of the sale, and his professional knowledge and circumspection seem to guaranty the legality of the proceeding. I bave exhibited this detail in order that you may perceive the precise bearing of the question upon the particular case, and, as it is very desirable to ascertain the strict legal ground which the Commissioners of the Sinking Fund may be able to sustain, I have to request your opinion in writing, as soon as may be convenient. I am, with great respect, gentlemen, Your obedient servant. JOSEPH REED, HORACE BINNEY, and CHARLES CHAUNCEY, EsqS. SIR: We have examined charter of the Bank of the United States, with reference to the question submitted to us by your note of the 17th instant; and, although that question cannot be said to be free from all doubt, yet we are of opinion that the weight of argument is against the authority of the United States to redeem, in the hands of a purchaser from the Bank, the funded debt subscribed by individuals, upon any other than the original terms of redemption. We think the reasons assigned by you, for the same opinion, have much force; and, in addition to those, we beg leave briefly to state the following: 1. The charter of the Bank, so far it regards the provision in question, as well as almost all others, is a private agreement between the United States and the Bank; and, therefore, the right of the Government to pay off the debt subscribed by individuals. must be considered, prima facie, as a private right of the Government, to be enforced against the Bank only, with whom the agreement is made. If it was intended to carry this further, and enforce the right against purchasers from the Bank, some provision should, and we think would, have been introduced to this effect in the charter. But there is no provision of this kind; and, what is more than the mere absence of such a provision, the practice of the Treasury Department in issuing to the banks certificates specifying the original terms of redemption, shews their construction that those only were the terms, so far as it regarded the stock itself, and that the right of redemption was a circumstance personal to the Bank, so long as the stock continued their property. 2. The difference between this stock and the five per cent. stock, is, also, very observable. Redemption at the pleasure of the Government is part of the original character of the last mentioned stock. and the certificates shew it to be so. The continuance of the old form of certificates. as to the other stock, is therefore still stronger, from this circumstance, as an interpretation of the Treasury. If, however, it is said, that the Treasury Department had no authority, by the act of Congress, to direct a new form of certificate, and therefore the omission to do it can avail nothing, this very answer is an argument for the Bank; because the question at once occurs, if it had been intended to enforce this right against the purchaser, would not Congress have directed a new form of certificate, that would have given notice to all purchasers. 3. From the phraseology of the section. the right of the Bank to sell seems to be introduced as a qualification, or limitation, of the Government right to redeem; and, in order to guard against the right of selling being so exercised as to defeat altogether the right of redemption, there is a limitation introduced as to this also; viz: The amount to be sold in any one year must not exceed two millions. Here are mutual precautions, against inconveniences that were to be apprehended from either provision, if unqualified. The right of redemption might have been a bar to sale, if not qualified by the express grant of authority to sell; and the right of sale might have been so exercised as to defeat altogether the right of redemption, if not limited as to its annual amount; thus qualifying the right of redemption by the right of sale, is another argument for the position, that the redemption applies only to the stock in the hands of the Bank. 4. In addition to this, it is to be remarked that the foreign market is the only one that is left absolutely open to the banks for the sale of this stock, there being, as to the American market, a right of pre-emp tion in the Government. Now, it is well known that a stock redeemable at the pleasure of the United States, is one to which foreigners are so averse, that it may be considered as almost excluded from that market; and, therefore, if the United States have this right of redemption against purchasers from the Bank, the privilege of selling this stock, which is so expressly given to the institution, and which was, no doubt, of great importance to it, is, in effect, merely nominal. We have the honor to be, very respectfully, Your most obedient servants, WM. JONES, Esq. President Bank United States. JOS. REED, HOR. BINNEY, Bank of the United States, June 5th, 1817. SIR: I have the honor to acknowledge the receipt of your letter of the 2d inst., upon which I beg leave to observe, that the apparent irregularity of the statements, rendered by this bank and its offices to the Treasury, since the agreement between the Department and the bank, to consolidate their transactions on the books of the Treasurer, and of the Bank of the United States, respectively, has originated in the following causes: The balances standing to the credit of the Treasurer of the United States, on the books of the offices of this bank, and the selected banks of deposite, have not been transferred to the credit of the Bank of the United States, for the use of the United States, on the day which the Treasurer entered upon the new regulations, and as this can be done only by the drafts of the Treasurer, for that purpose. the bank has been waiting for those drafts, which it appears by your letter of the 19th ult., had been directed to be issued upon the State Banks, and was presumed the same course would have been adopted, in regard to the balances on the same day, to the credit of the Treasurer on the books of the offices. The bank could not, with propriety, direct its offices to transfer the public money from the credit of the Treasurer, to that of the bank; and the offices would not presume to do it, without instructions from the Treasury. A paper, purporting to be a copy of the circular instructions, issued in conformity to the new regulations, by the Treasury, to the offices, and selected banks has recently been seen at this bank, but, it is believed, that none such have been received by the offices, and this may account for their perseverance in the old system. The manner in which the bank has kept the public account, since the new regulations were agreed upon, can be explained, with perfect clearness, to the Treasurer, and by a few counter entries, may be made to conform to the new arrangement from the 12th ult., for which purpose, it will be advisable, if no impediment exists in the Treasury, to transmit to the cashier of this bank, drafts on the offices and selected banks, respectively, for the balances which may have been due to the Treasurer on that day, and the circular instructions of the Treasury to the offices; upon which the necessary corrections will be immediately made, and such instructions issued from this bank, as will in future ensure perfect regularity and accuracy. I have the honor to be, Sir, your obedient servant, Hon. Wм. H. CRAWFORD, Secretary of the Treasury. P. S. If the balances are drawn for as on the 12th ult., when the Treasurer commenced the new system, the Bank of the United States will in that case, be credited with the funds upon which his drafts were drawn; otherwise the bank will appear to have been drawn upon, while the Treasurer still remained credited with those funds. If, however, any inconvenience shall arise from drawing the balances retrospectively, the bank will conform to any other period or manner, which you shall please to prescribe, for the liquidation of the old, and commencement of the new accounts, but, it is very desirable that the corrections be made forthwith. Bank of the United States, June 13th, 1817. SIR: In pursuance of the instructions contained in your letter of the 14th April last. I have purchased, on account of the Commissioners of the Sinking Fund, the following amounts of the funded debt of the United States, which has been transferred to Thomas T. Tucker, Treasurer of the United States, in trust for the said States, as per the enclosed certificate of the Commissioner of Loans, viz : 10,000 66 :: Drs. 2,207 12 6 per cent. stock 10 million loan 5,000 2,751 86 5,591 02 2,950 " 90,402 02 28,107 64 56,166 27 3 per cent. stock. You will please to receive, herewith, my account for the purchase of the stock, with the vouchers in support of the same. The price of the funded debt has advanced so much, since this stock |
