Kentucky Gazette

IN SENATE OF THE U. STATES.
On motion of Mr. Crawford, the following papers were read and ordered to be printed for the use of the Senate.
SENATE CHAMBER. 29th Jan. 1811.
The hon. Albert Gallatin,
SIR,
The committee of the Senate, to whom has been referred the memorial of the president and directors of the Bank of the U. States, praying for a renewal of their charter, have directed me to request you to state to the committee, whether, in your opinion, the renewal of the said charter, will not greatly facilitate the collection of the revenue, and promote the public welfare. In complying with this request, it is expected that you will furnish the committee with the facts and reasoning upon which your opinion has been formed: together with such other information upon this subject, as may be in your possession.
I am, sir, respectfully, your most obt, and very humble servt.
WM. H. CRAWFORD.

LETTER.
Treasury Department, Jan. 30th, 1811.
SIR,
Having already in a report to the Senate of 2d March, 1809, expressed my opinion in favor of a renewal of the charter of the Bank of the U. States, an opinion which remains unchanged, I can only add a few explanatory remarks in answer to the inquiries of the committee, as stated in your letter of yesterday.

The banking system is now firmly established, and, in its ramifications, extends to every part of the U States. Under that system, the assistance of banks appears to me necessary for the punctual collection of the revenue, and for the safe keeping and transmission of public monies. That the punctuality of payments is principally due to banks, is a fact generally acknowledged. It is, to a certain degree, enforced by the refusal of credit at the custom house, so long as a former revenue bond actually due, remains unpaid. But I think, nevertheless, that in order to ensure that precision in the collection, on which depends a corresponding discharge of the public engagements, it would, if no use was made of banks, be found necessary to abolish altogether the credit now given on the payment of duties: a measure which would affect the commercial capital, and fall heavily on the consumers. That the public monies are safe by being weekly deposited in banks, instead of accumulating in the hands of collectors, is self evident. And their transmission, whenever this may be wanted for the purpose of making payments in other places, than those of collection, cannot, with any convenience be effected on a large scale in an extensive country, except through the medium of banks, or of persons acting as bankers.

The question therefore is, whether a bank incorporated by the United States, or a number of banks incorporated by the several states, be most convenient for those purposes.

State banks may be used, and must in case of a non-renewal of the charter, be used by the treasury. Preparatory arrangements have already been made to that effect; and it is believed, that the ordinary business will be transacted through their medium, with less convenience, and in some respects with perhaps less safety than at present, but without any insuperable difficulty. The difference with respect to safety, results from the organization of the Bank of the United States, by which it is responsible for the money deposited in any of its branches, whilst each of the state banks which may be employed, will be responsible only for the sums in its own hands. Thus the Bank of the United States is now answerable for the monies collected at New Orleans, and deposited there in its branch, a security which will be lost under a different arrangement.

Nor will the U. S. have any other control over the manner in which the business of the banks may be conducted, than what may result from the power of withdrawing the public deposits; and they will lose that which a charter or a dependence on the general government for a charter now gives over the Bank of the U. States. The facility of obtaining such accommodations as may at times be wanted, will for the same reason be lessened, and the national power will to that extent be impaired. It may be added, that even for the ordinary business of receiving and transmitting public monies, the use of a state bank may be forbidden by the state, and that loans to the U. States are by many of the charters forbidden, without a special permission from the state.

As it is not perceived on the other hand, that a single advantage will accrue to the public from the change, no reason presents itself, on the ground of expediency, why an untried system should be substituted to one under which the treasury business has so long been conducted with perfect security to the United States, and great convenience not only to the officers, but also to all those who have had payments of a public nature to make or to receive.

It does not seem necessary to advert to the particular objections made against the present charter, as these may easily be obviated by proper alterations. What has been called a national bank, or, in other words, a new bank of the United States, instead of the existing one, may be obtained by such alterations. The capital may be extended and more equally distributed: new stockholders may be substituted, to the foreigners, as had been suggested in the report of 2d March, 1809; and any other modification, which may be thought expedient, may be introduced, without interrupting the operations of the institution now in use and without disturbing all the commercial concerns of the country.

If indeed the Bank of the United States could be removed without affecting either its numerous debtors, the other monied institutions, or the circulation of the country, the ordinary fiscal operations of government would not be materially deranged, and might be carried on by means of another general bank, or of state banks. But the transition will be attended with much individual and probably with no inconsiderable public injury. It is impossible that an institution which circulates thirteen millions of dollars, and to whom the merchants owe fourteen, should terminate its operations, particularly in the present unfavorable state of the American commerce, and after the great losses lately experienced abroad, without giving a serious shock to commercial, banking and national credit. It is not intended to overrate the extent of an evil which there are no certain data to appreciate. And without expatiating on the fatal and unavoidable effects on individuals; without dwelling on the inconvenience of repaying at this time to Europe a capital of seven millions; and without adverting to other possible dangers of a more general nature, it appears sufficient to state, that the same body of men who owe fourteen millions of dollars to the Bank, owe also ten or twelve to the United States, on which the receipts into the treasury for this year altogether depend; and that, exclusively of absolute failures, it is improbable that both debts can be punctually paid at the same time. Nor must it be forgotten that the approaching non-importation will considerably lessen the efficacy of the provision by which subsequent credits are refused to importers who have not discharged former revenue bonds. Upon the whole, a perfect conviction is felt that in the critical situation of the country, new evils ought not to be superadded, and a perilous experiment be attempted, unless required by an imperious necessity.

In these hasty remarks I have not adverted to the question of constitutionality, which is not a subject of discussion for the secretary of the treasury. Permit me, however, for my own sake, simply to state, that the bank charter having, for a number of years, been acted upon or acquiesced in as if constitutional by all the constituted authorities of the nation, and thinking myself the use of banks to be at present necessary for the exercise of the legitimate powers of the general government, the continuation of a bank of the United States has not, in the view which I have been able to take of the subject, appeared to me to be unconstitutional.

I have the honor to be;
Respectfully,
Sir,
Your obedient servant,
ALBERT GALLATIN.
Hon. Wm. H. Crawford,
Chairman, in Senate