state of the question, the general practice of other banks, under similar provisions in their charters, may well relieve the directors from the imputation of intentional mismanagement.

If, in all this, the Bank has violated its charter, what other banks of extensive business have not done the same thing?

But the other subject of complaint, and that which seems to be regarded as the more offensive part of this regulation, is, that the public directors, as they are called, were not allowed to be on this committee.

It may be observed, in the first pace, that, if the discounting of bills of exchange by a committee, instead of the whole board of directors, be illegal, it would hardly be rendered legal by placing any or all of these public directors on the committee as members. But the Secretary seems to suppose that there was some particular object in this exclusion of these directors, as if there had been something wrong to be done, and therefore secrets to be kept, by this committee. It is not easy to see what foundation there can be for this opinion. All those discounts are matter of record. They appear every day in the books of the Bank. Every director, on or off the commitee, sees them, or may see them, at pleasure. There is no secrecy, nor any motive for secrecy, so far as this committee can percive. Very proper causes may have existed, for aught that can be known by the Senate, for the omission of these particular directors from this particular committee. Their services might have been deemed more useful in other committees; or, however respectable in general character, or however useful in other parts of the direction, they may have been esteemed not so well acquainted as others with the business of foreign or domestic exchange. And even if there were, or are, other causes for the omission, such as tend less to prove the existence of that harmony and mutual respect which it is so desirable should prevail in such a board, these causes cannot furnish any just ground for asserting, either that the business of exchange was illegally conducted, or that the constitution of the committee was proof of the existence of any motive not fit to be avowed.

But the Secretary entertains an opinion respecting the character and duties of the directors appointed by the President and Senate, in which the committee do not concur. He denominates them "public directors," "officers of the Government," &c.

By the charter of the Bank there are to be twenty-five directors. Of these, twenty are to be chosen by the individual stockholders, and five appointed by the President, with the advice and consent of the Senate. As the Government owned one fifth of the stock of the Bank, it was judged expedient to place in the hands of the President and Senate the appointment of one fifth of all the directors. But they are not called public directors, nor officers of

the Government, nor public agents; nor are they entitled, so far as the committee can perceive, to either of these appellations, any more than the other directors. The whole twenty-five directors are joint managers of a joint fund, each possessing precisely the same powers, and charged with the same duties as every other. They derive their appointments, it is true, from different origins, but, when appointed, their authority is the same. There is not one word in the charter intimating, in the remotest manner, that the five directors appointed by the President and Senate have any particular duty, or are the objects of any peculiar trust. The charter calls them not Government directors, not public directors, but simply the directors appointed by the President and Senate. They are placed in the direction to consult with the other directors for the common good of the Bank, and to act with these others, and vote with them on all questions. They are, what the law calls them, directors of the Bank, not agents of the Government. They are joint trustees with others in a joint interest. If any thing illegal or improper takes place in the board, they are bound to resist it by the duty which they owe the individual stockholders, as much as by the duty they owe the Government; because they are agents of the individual stockholders, and have the same au thority to bind them, by their acts, as to bind the Government; and, in like manner, it is the duty of those directors who are appointed by the individual stockholders, to give notice, as well to Government as to the stockholders, if any thing illegal take place or be threatened. All those directors act and vote together, on the smallest as well as on the highest occasions, and, by their joint votes, bind the corporation, and bind both the Government and individual stockholders to the extent of their respective interests in the corporation.

If the directors appointed by the President and Senate had been excluded by the charter from any part of the power exercised by the others; if it had been forbidden them to interfere, to the same extent, and with the same effect, as the rest, in the common business of the Bank, there might be some reason for supposing that an uncommon character-a character not so much of action as of supervision and inspection-was intended to be conferred on them. But they do interfere, and justly, in all transactions of the Bank. They do vote and act on all subjects like the other directors. Being, then, possessed of this common character of directors, and enjoying all its powers to the fullest extent, the committee know no form of argument by which an uncommon and extraordinary character is to be raised by construction, and superadded to the common character of directors which thus already belongs to them.

By granting the charter, and by accepting it, the Government

on the one hand, and the individual stockholders on the other, have agreed, that, of the directors, as joint agents of all parties, the stockholders shall appoint twenty, and the Government five. The interest of all parties is confided to this joint agency; and any distinction in their powers, as arising from their different modes of appointment, is, in the judgment of the committee, not to be sustained. They regard such distinction as entirely inconsistent with the nature of the agency created, and as deriving not the least countenance from any thing contained in the law.

The committee, nevertheless, to avoid misapprehension, wish to repeat, that it is undoubtedly the duty of the directors appointed by the President, and of all other directors, to give notice, both to Government and the stockholders, of any violation of the charter committed or threatened.

The Secretary of the Treasury has thought proper to observe that the measures of the committee of exchange are, as it appears, designedly, and by system, so arranged as to conceal from the officers of the Government transactions in which the public are deeply involved. This, it must be admitted, is a very serious charge. It imputes a corrupt motive. The committee have sought for the foundation, either in evidence or argument, on which this charge rests. They have found neither. They find only the charge, in the first place; and then they find the charge immediately stated as a fact, and relied on as the basis of other charges.

The second reason specially reported by the Secretary as arising from the conduct of the Bank, respects the bill of exchange drawn by the Secretary of the Treasury on the government of France, and purchased by the Bank.

The general facts connected with this case are these:

By the late treaty of indemnity between the United States and France, it was stipulated that the French government should pay to that of the United States twenty-five millions of francs, to be distributed among those American citizens who had claims against France for the unlawful seizure, capture, and condemnation, of their vessels and property; the whole sum to be paid in annual instalments of four millions one hundred and sixty-six thousand six hundred and sixty-six francs each, into the hands of such persons as shall be authorized by the Government of the United States to receive it; the first instalment to be paid at the expiration of one year next following the exchange of the ratification.

On the expiration of the year, the Secretary drew a bill of exchange, signed by himself as Secretary, on the French govern ment, for the amount of this instalment, and sold it to the Bank, like any other bill of exchange, and received the proceeds by credit of the amount to the account of the Treasurer in the Bank.

On the presentment of this bill at the French treasury, payment was refused; the bill was accordingly duly protested, and it was taken up by a third person for account of the Bank. The damages accruing on this bill, according to law and constant usage in such cases, are one hundred and fifty-eight thousand dollars.

If this bill had been transferred by the Bank, as probably it was, the Bank itself would have been answerable for damages, even at a higher rate, if a third person had not taken up the bill for the honor of the Bank.

On receiving information of the protest of the bill, the officers of the Bank, as was their duty, gave immediate notice to the Treasury Department, and accompanied that notice with the information, always given in such cases, that the drawers of the bill would be held answerable for the damages. Such is the substance of the facts in this case.

The Bank, it would appear, was willing to collect the bill on account of Government, and to credit the Treasury with the proceeds when received-a course of proceeding which had this to recommend it, that the money to be received on the bill was to be received by the Government simply in trust for claimants under the French treaty, and was not ultimately destined to the ordinary uses of the Treasury. On the contrary, indeed, before the dishonor of the bill was known, it had been made, already, the legal duty of the Secretary to place the fund, so soon as received, at interest, for the benefit of the claimants.

But it was thought best to sell the bill, and to realize at once its amount into the Treasury; and the bill was sold to the Bank, in preference to others offering to purchase, for no reason, it is to be presumed, except that the terms of the Bank were more satisfactory. The bill was thus purchased by the Bank, and its proceeds credited to the Treasury. This was a mere transaction of the purchase and sale of a bill of exchange. There was no trust confided to the Bank, and no fiscal agency in the whole matter. Indeed, the agency of the Bank had been declined, the Secretary preferring to deal with it, not as an agent, but as a purchaser, proposing to it not to collect the bill, but to buy it. On being remitted to Europe, and presented for payment, the bill was protested. By the universal commercial law, the Government, on the occurrence of this protest, became amenable to the Bank for the amount of the bill, with damages. These damages may be ultimately claimed, with justice, from the French government, if the bill was drawn upon sufficient grounds, and on proper authority; in other words, if the obligation of the French government was such, that it was bound to accept and pay the bill; but unless there be something in the case to vary the general rule, which the committee do not perceive, these damages were part of the debt 49

VOL. II.

which had become due to the Bank, as much as the principal sum of the bill. If this be so, how could the directors relinquish this part of the debt, any more than the other? They are agents for the corporation; they act as trustees, and have no authority, without consideration, to release either to the Government or to individuals debts due or properly belonging to the corporation.

It has been suggested, that the Bank should have taken up this bill, when protested, on Government account. Two answers may be given to this suggestion: the first is, that the bill had been taken up by a correspondent abroad for account of the Bank, before it was known in the United States that it had been protested. The second is, that it would have been unlawful for the Bank to have advanced such amount to the Government, or on account of Government, for the purpose of taking up this bill, or for any other purpose, without an act of Congress. The express words of the charter forbid it.

But, as a reason for removing the deposits, it appears to the committee quite immaterial whether the Bank be right or wrong in claiming these damages. If wrong, it will not recover them. It is not the judge of its own rights; and if the appropriate tribunals shall decide that the Bank was acting, on this occasion, or ought to have acted, as the agent of Government, or that it was its duty to take up the bill on account of Government, then the damages will not be awarded to it. And in the worst aspect of this case, how can its conduct, in this respect, be any possible reason to justify the removal of the deposits? What connection has this occurrence with the safe-keeping of the public treasures, or with the remitting them from place to place, to meet the convenience of Government, according to the duty of the Bank under the charter? The Bank thinks itself entitled to damages on a protested bill purchased and held by itself, and drawn by Government. The Secretary of the Treasury thinks otherwise. If there be no reason to doubt the sincerity of the Secretary's conviction, there is as little to doubt the sincerity of that entertained by the Bank; and it is quite inconceivable to the committee that the pendency of such a difference of opinion, on such a question, should furnish any reason whatever for withdrawing the deposits, unless it be at once admitted that the Secretary holds the power of removal as a perfectly arbitrary power, and may exercise it, by way of punishment, whenever, in any particular, the conduct or the opinions of the Bank do not conform to his pleasure.

The Secretary does not argue this matter. He offers no reason in opposition to the legal right of the Bank to the damages claimed. Indeed, he hardly denies the right. He commences his observations on the subject by saying that the ruling principle of the Bank is its own interest; and closes them with another declaration,