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? 1 V *" ?. V' \ '*' t r . A . . ? %K M i THE CAMDE1V JOURNAL. 1 > ' - - ??> -snifWJio? e'^iSBsaiin' jiif * " ;l t'-'i /i<n: n. n; > !.* 'jv?lj; g*?/: *!?;:/ tii,y/ [HEW SERIES.] VOL. II. CAMDEN, SOUTH 04 ROLIIV A, .WEDNESDAY, APRIL 28, 1841. ; NOvM, ? ???y??????????? i . ?????immmmm? ? i m . ? I 1? REPORT OF THE INVESTIGATING COMMITTEE. The Committee appointed at a meeting of the Stockholders of the Bank of the United States, held January 4, 1841, to examine the details of the statement, then submitted by the President, respectfully submit the following report: The Committee proceeded, in the first -?* IP- hr* cf of omonf instance, 10 vei ny m uetun, mv. of the Assets and Liabilities of December 21, 1840. The securities and evidences in the possession of the Bank at Philadelphia, were accordingly produced, and on comparison therewith, the same was found to be correct. The cash was counted out on the second of March, and corresponded with the Ledger Balance of that day. The returns from the several offices and agencies were read, and found to agree with the printed statement. The accounts of the circulation and issues of the late and present Bank were also exam;ned. The Committee have prepared, and herewith submit astill more detailed statement of the Assets and Liabilities of the Bank, 011 the twenty first day of December, 1840, than that heretofore presented; exhibiting the particulars oi each item ot i the original statement, in the same order: and arrangement, as is therein pursued;! omitting, however, the items ''Bank United I States Stock, balance unsold," and the; amount credited as "Bonus for Charter." The next object proposed, was to make a valuation of the Assets. With this view, they proceeded to re-examine the items of Active and Suspended Debt, Stocks, Real Estates, Bonds and Mortgages, Foreign Bills of Exchange, and amounts due by State Banks. The President of the Bank was also requested to obtain an estimate of the probable loss on the Assets at the different Offices and Agencies; returns from all which have accordingly been received. The estimates thus made are presented in a column, add-1 ed to the detailed statement, now submit-j ted and before referred to, (Appendix A.) The attempt to make an estimate of probable losses, was found to be attended with considerable difficulty and embarrassment. To adopt the present depressed market value of the several stocks, and loans held by the Bank, would not be a! fair criterion of their actual worth, which,1 rather than their present availability, was that at which the Committee endeavored to arrive. Still they have been necessa-: rily guided, in a great measure, by the Prices Current of the day. Of the Ileal Estate and Bonds and Mortgages, a very imperfect judgment could be formed, without inquiries as to title and incumbrances, which the Committee had not time to make. Many of the securities arc of a character to render it almost imprac- i ticable to form even a reasonable conjee- j turc of their value. While, therefore, the Committee bespeak for this portion of their labors that regard which is due to an honest effort from the best means within their reach, to arrive at the truth, they must be permitted to qualify it with the remark, that it is necessarily only an approximation, in which they cannot ask the stockholders to place entire confidince.? The ability of the Institution '.o realize any thing like a fair equivalent for its Assets, will depend much upon the course of policy it may in future pursue, and upon circumstances, which no one can be expected to foresee. The estimate is pre-1 sentcd, however, with less reluctance, as from the details, now given, each stockholder will be able to form a judgment. for himself. It may be proper here to remark, that it has been thought best by a majority of the Committee, not to submit the lists in detail of the active and suspended debt. This injuiy which would result to the credit of individuals by such an exposition, might ultimately be detrimental to the interests of the stockholders, while no benefit of sufficient importance to counterbalp, ance such a mischief, appeared to present itself. In regard to these two lines, therefore, the committee will content themselves with remarking that but a small i proportion consists of regular mercantile discounts. On the Active Debt, December 21, 1840, are loans to seven incorporated or other Companies of 1.211,193 dollars 22 cents, including one of 502,222 dollars 22 cents, to the Philadelphia, Wilmington, and Baltimore Railroad Company. The sum of 740,056 dollars 33 cents, are on obligations, having on that day mnM tl.an CIV mnnlhc /-. - Tkn nun 11IVS1C IUUII ?MV??I lid IU IUII? 1 1IU OUIII of 279,888 dollars 41 cents, a part of this line entered as "Bills Receivable," being nominally payable on demand, though really composed of permanent accommodations, is not included in either of these 1 amounts. Nor is the sum of 66,800 dollars 86 cents, "Bills receivable for sale of offices." A considerable part of it is in large amounts as will sufficiently appear from the fact, that forty eight individuals. * firms and companies, have discounts exceeding 20,000 dollars each, of whom twenty 9even discounts exceeding 50,000 dollars each; and nine exceeding 100,000 dollars each. A similar examination of the suspended debt exhibits as the result of fifty two individuals, firms and companies, standing charged on the books of that department, with more than 20,000 dollars each, twenty nine with more than 50,000 dollars, and eighteen with more than 100,000 dollars each. There are six individuals and firms whose debts amount to 2,314,000 dollars, two of which are over . 650,000 dollars each, a large amount of which will be lost; and four others, who have loans amounting to 569,000 dollars. Eleven Joint Stock Companies are indebtpA nn this list 807.582 dollars 23 cents, of which the Philadelphia and Germantown I Railroad Company is 129,902 dollars 76 cents. The whole result of the valuation made by the Committee, may be thus stated in short: The assets of the Bank, amounting on the twcnty first day of December, 1840, according to the stntemont of the Committee, to 69,531,842 dollars 46 cents, have been estimated at $51,779,795 46 From which deduct liabilities, 36,959,539 63, Leaves tho sum of $14,820,256 11 To represent the capital of ?35,000,000 00 Less amount of Bank United States slock on hand, 2,471,400 00 832,528,600 00 To this may be added the sum of four or five hundred thousand dollars, for that part of the circulation amounting on the twenty first of December, 1840, to 9,336,- [ 000 dollars 90 cents, which is probably lost oi* destroyed. The committee submit also herewith, condensed General Statements of the condition of the Bank, on the first day of February. 1836, on the first day of April, 1839, and on the first dayof March, 1841; with a comparative Table of Assets and Liabilities, for these three periods, and also a General Statement of April 1, 1841.? (Appendix B. C. D. E. and F.) The general statement of the condition of the Bank February 1, 1836, is a copy of that submitted to the stockholders convened at the Bank, upon the nineteenth day of that month, for the purpose of consideriag the propriety of-accepting the charter, then recently granted by the legislature of Pennsylvania. By that statement, showing the condition of the Institution. after a period of active business extending over twenty years, and including more than one period of serious commercial difficulty, there appeared to the I credit of Discount, exchange and interest, $423,875 15 Profit and loss, 3,765,399 54 Contingent fund, exceeding the losses chargacble thereto, by the sum of 1,436,561 65 Foreign exchange account, 847,871 03 Fund for extinguishing cost of Bankiiig Houses, 1,104,223 09 Contingent interest, 440,854 14 $8,018,784 60 These sums after deducting the amount of deficiencies and expenses, 217,194 22 Formed tho surplus funds of the Institution $7,801,590 38 from which, it will be recollected, it was strongly urged upon the stockholders as the main argument in favor of accepting the charter then offered, that, after making the most liberal allowance for proba ble losses on the suspended debt and real estate, the entire Bonus could be paid, without in the least degree impairing the capital. The origin of the course of policy, which has conducted to the present situation of the affairs of the Institution, dates however beyond the period of the re-charter by the State. When it was perceived that the charter of the late Bank of the United States, would not be renewed or extended by Congress, the President and Directors commenced winding up its concerns, and among the first measures taken to that end, was to sell or dispose of, so far and as speedily as could be effected, the assets of its several branches. This was generally done to the State Banks, who gave for them their obligations, payable by instalments at distant periods. At the same time the policy was adopted of converting the active debt into loans upon the security of stocks, by which permanent investments might be provided for the capital of the Bank during the long period of its anticipated liquidation. On the 6th of March, 1835, "the President submitted to the Board, a general view of the situation of the Bank, its means and ! liabilities, its circulation and deposits, and the probable future demands upon it. i showing its ample resources and power of 1 expansion: whereupon" the committee of 1 Exchange, which was composed of three < Directors, appointed by the President, 1 were authorized by the Board "to mak; loans on the security of the stock of th Bank, or other approved security, and, i uecessary, at a lower rate than six, bu not less than five per cent, per annum."? This delegation of power to the Exchang Committee, was neyer expressly and for mally renewed under the new charter unless it be considered as included, undei a general resolution of the new Board adopting "The By-Lawe," Rules and Re gulations" of the former Bank. By the statement of the condition of the Ban! upon the 2nd of March, 1835. the whole amount of loans upon Bank, stock, anc other than personal security, was 84,797, 936 25 cents, while that by that of'Marcl 3, 1836, these loans had increased to the sum ol $20,440,307 88. Under sucl circumstances, the active means of the Bank were comparatively small, to pa) the immediate demand of the State foi the Bonus, to settle with the governtneni of the United States for its stock, and tc meet its circulation of 820,114,227 56 which, contrary to the anticipation^ ex pressed at the period of its re-charter soon began to be rapidly presented for re> demption. The Bank was of necessit) driven into the market as borrowers, anc very soon the first step was taken to ob tain loans abroad, by sending the Cashiei to Europe for that purpose. Two loani were accordingly negotiated by him; on< in England, of ?1,000,000 sterling; anc another in France, of 12,500,000 francs on favorable terms. in oraer 10 provide lor tne payment o these loans, and to negotiate others, anr in general to superintend the interests o the Institution abroad, it was determine! by the Board to have a General Agent re siding in London, and on the twenty se cond of September, Mr. Samuel Jaudon then Cashier, was elected to that post and his agency there commenced accord ingly, November 8, 1837. At the same time, the Bank entered th< Foreign and Domestic Markets as bor rowers, upon their Post Notes and Bond payable in Europe: the whole amount ob tained in this way at different periods uj to July 1840, being more than twenty three millions. From these causes, as well as from tin general derangement of affairs, the sus pension of specie payments, and the dis credit consequently thrown upon Ameri can securities, and more particularly fron the course of the Bank's dealing in Fo reign Exchange, by drawing Bills to i large amount without having prcviousl; provided the funds for their payment, am thus subjecting their agent in London, t the necessity of obtaining money in haste in order to maintain the credit of tlr Bank: it was no longer found possible t< command funds there upon the same fa vorable terms as before. And according ly, upon Mr. Jaudon's subsequent nego tiations for loans to the amount altogethe of 812,212,697 46, there is chargeable t Losses, the sum of 81,149,907 04, beinj for Discount, Commissions to Foreigi Bankers, and other charges; not includ ing Mr. Jaudon's own Commissions, an the expenses of the Agency in Londoi amounting up to January 1, 1841, to th sum of 69,344 pounds 17 shillings 6 penc sterling, which at nine per cent, exchang is equal to 8335,937 39. It may be proper to explain in passing how this large sum for the expenses o the Agency at London arises. When Mi Jaudon was elected to the place of foreigi agent, he was the principal cashier, at i salary of 87000 per annum. The Batil paid the loss on the sale of his furniture 5074 dollars, and the passage of himsel and family to London, a further sum o 1015 dollars. He was to devote himsel exclusively to the business of the Bank, t negotiate an uncovered credit in England to provide for the then existing debt ii Europe, to receive its funds, to pay its bill and dividends, to effect sales of stocks, ant generally to protect the interests of th< Bank, arid "the country at large." Fo these services he was to receive the com mission theretofore charged, and allowet to Baring, Brothers & Company, equal t< about 28,000 dollars per annum. In ad dition to,which, the expenses of the agenct were allowed him, including a salary o 1000 pounds sterling to his brother, Mr Charles Br Jaudon, as his principal clerk Fr>m the increase of money operations arising from facilities afforded by the agency, the amount upon which conimis sions were charged was so greatly aug mented, so that the sums paid him for hit ordinary services up to January, 1841 amounted at nine per cent, exchange tr 178,044 dollars 47 cents, and the expenses of the agency to 35,166 dollars 99 cents. In addition^to these sums, he was allowed by the Exchange Uommittee, an extra commission of one' per cent upon a loan effected in October, 1839, oj 800,000 pounds, say 38,755 dollars 56 cents* and upon his claim for a similai commission upon subsequent loans ir i France and Holland, to the amcfrint dl s 8,337,141 dollars, 90 cents, the board of f, directors, under the sanction of a legn t'opinion, from counsel of high standing, - and the views of the former President, by whom the agreement WithJVIr. Jaudon - was made, that the case of extraordinary , loans wa3 not anticipated, not meant to be r included in the original arrangement, al, lowed the further charge of 83,97ft dol lars, 37 cents. These several.- sums a: mount to 335,937 dollars, 39 cents, as be: fore stated. i I Such were some of the results of the I resolution of March, 1835, though it can not be questioned, that much may be fairly l attributed to the unhappy situation of the i business and exchanges of the country, i concurring with the unfortunate policy 5 pursued by the administration of |he Bank. r Thus the Institution has gone on, to in crease its indebtedness abroad, until it has t now more money borrowed in Europe, > than it has on loan, on its list of Active ; Debt in America. | To this has been superadded, extensive , [ dealings in stocks, and a continuation of -. the policy of loaning upon stock securir ties, though it was evidently proper upon I the re-charter, that such a policy should be - at once entirely abandoned. Such indeed r was Its avowed purpose, yet one vearaf3 tcrwards, in March, 1837, it3 loans upon } I stocks and other than personal security I'had increased 7,821,541 dollars, while the /Bills discounted on personal security, and I Domestic Exchange, had suffered a dimi f nution of 9,516,463',clollar3, 78 cents. It 1 seems to have been sufficient to obtain f money on loan, to pledge the stock of an 1 "Incorporated Company," however remote - its operations or uncertain its prospects.? - Many large loans originally made on a , pledge of stocks, were paid for in the , same kind of property; and that too at par - when in many instances they had become depreciated in value. It is *ery evident 3 to the Committee, that several of the of ficers of the Banks were themselves cns gaged in large operations in stocks and - Speculations, of a similar character, with 3 funds obtained of the Bank, and at the y same time Loans were made to the Companies in which they were interested, and 3 to others engaged in the same kind of oc cupations, in amounts greatly dispropor tionate to the means of the parties, and to - their proper and legitimate wants and i dealings. The effect of this system was - to monopolize the active means of the Ina stittition, and disable it from aiding and acy commodating men engaged in business i really productive and useful to the com a munity; and as might have been antici 1 ? -I At !, patea, a large part or me sums mus iumi. e ed were ultimately lost, or the Bank coma pelled on disadvantageous terms as to - price, to take in payment stocks, back lands, and other fragments of the estates i- of great speculators, r The loose and irregular manner, in 3 which the business of loaning money was ? conducted, tended greatly to produce this a result, and deserves particular notice and - explanation. From March, 1835, the peI riod of the passage of the Resolution a above referred to, the chief control and e management of the affairs of the Institue tion appears to have passed from the e hands of the Directors. The mode in which the Committee of Exchange transr, acted their business, shows that there realf ly existed no check whatever upon the \ officers, and that the funds of the Bank ii weie almost entirely at their disposition, a That Committee met daily, and were atlc tended by the Cashier, and at times by s, the President They exercised the power f of making loans and settlements, to full f as great an extent as the Board itself.? If They kept no minutes of their proceedo ings?no book in which loans made, and I, business done, were entered,"T>ut their de' J- imvkoL 11 cisions ana aireuuuiis, vyuic giv^u i^uais ly to the officers, to be by them carried 1 into execution. The established course 2 of business seems to have been, for the r First Teller to pay, on presentation at the - counter, all checks, notes, or due bills, I having endorsed the order or the initials > of one of the cashiers, and to place these - as vouchers in his drawef, for so much r cash, where they remained, until just bef fore the regular periodical counting of the . cash, by the Standing Committee of the . Board on the state of the Bank. These , vouchers were then taken out, and enter; ed as "Bills Receivable," in a small mcmo. randum book, under the charge of one of - the clerks. These bills were not discount5 ed, but bore interest payable semi-an, nually, and were secured by a r ledge of > stock, or some other kind of property. It . is evidently impossible, upder such cir, cumstances, to ascertain, or be assured, :???-J ?nii f-?oi-?ii-ii)nr loan or settle ; in l ugaiu iu uuj pui nv??-. ? ment, that it was sanctioned by a majori. ty of the Exchange Committee. It can f be said, however, with entire certainty, > that the very large business transacted r in this way, does not appear upon the face i of the Discount Books, was never sub mitted to tiic examination o* the member* crff'tho Board, at its regular meetings, nor is it any whpre entered on the minutes, as .having be err reported, to that body, for their information or approbation, ' ^Xs illustrative of the extent of"these transactions,'it incy be proper to stuto, that tiirs sum total o? utyiFla RsceiyaC.'c"? On the 4th of March, 183G, was $6,221,660 85 h ' .1837, 8,183445 tyl ; " 1833, 25 1,33?,. r/ 6,772,731 30 <? 18.10, 4,041,705 04 The amount outstanding. on ?f this Department, on the ,4Ua uf March,. 1841, had become j reduced to the sum of 176,954 do;, a."" 12 .Tljo accounts have been.Bottled in various or trans. I ferred to othar heads, the Directors, having" rtioly^i ! to abolish altogether a eoursn of proceedings*: *> pregnant with mischief and 1ms,; pnd to pfobihtt entirely, all loans oxccptrjrysthe Board itself. - > Thore stands now upon the booty of the Suspend ed Debt Department, transferred thereto fruor "Bill# Receivable," still unsettled. 1,470,651 -dojlsre, -77 cents. A portion is on the list of Active Debt, bav. ing been changed into Bills Discounted, at d^trssd periods of maturity.; -i ,r ! These loans, were generally in largo amounts. Ia tht! I .lilt of DnKtr\nt ,.n nD'.ll. ??^?u-" ? - - ? vu vuui ncucivAure un Ulf 1st January 1837, twenty one individual!, firms and companies, stand charged, each with an amount of one hundred thousand dollars and upwards. One firm of this city received aoooonnodationa of'this kind betweetr August 1835, and November 1837, to the extent of 4,213,878 dolloiB 30 Cents, more than half of which was obtained in 1837. The ofpesri of the Bank themselves received in this way loans io a large amount. In March 1836, when .tho Bank wont into operation, under its new chatter, Mr. Samuel Jaudon, then elected its Principal Cashier, was indebted to it 100,500 dollars. When he resigned the situation of Cashier, and was appointed Foreign Agent, ho was in debt 408,389 dollars 25 cents, and on the^st of March 1841, he still stood charved with an mdehtadnaM of 117-500 dAlkn Mr. John Andrews, First Assistant Cashier, Was in. dobtcd to the Bank in March 1836, 104,000 dollars. By subsequent loans and advances made during the noxt three years, he rccoivcd in all, the sum of 438*. 930 dollars 67 cents. Mr. Joseph Cowperthikiife, then Second Assistant Cashier, was in debt to the Bank in March 1836,115,000 dollare; when he Was appointed Cashier in September 1837, 336,382 dol. ^ lars 50 oents, when he resigned, and was elected% Director by tho Board, in June, 1840, 72,960 dollars, and ho stands charged March 3. 1841, bn the Books with the sum of 55,081 dollars 95 cents It appears on the Books of the Bank, that these three gentle, men wore engaged in making investments On their joint account, in the Stock and Loan of the Cam. den and Woodbury Railroad Company Philadelphia, Wilmington and Baltimore Railroad Company, Dau. 1 phin and Lycoming Coal Lands, and Grand Gulf ' Railroad and Banking Company ' The various settlements effected with the officers I and other debtors for these irrbgntar 'loarls, most'hot be suffered to pass without notice. These settle. . m'ents were without the knowledge or approbation of >i n i _? i?. ? / __ ? ?: r-?" ? buu jjuaiu, ub itaoi ou IUI as appcao iiuui urcu . minutes. The large loan to a firm in this city, be. i fore adverted to, was settled by tho receipt in pay* ment of the various stocks and real estate, except I 247,264 dollars, 50 cents, in cash. Another large amount of loans to a single individual of 1,014,977 dollars, 80 cents, was settled in like anner. Then , was taken in settlement of debt from JHessre. Bevan & Humphreys, (Mr. Jpseph Cabot, one of Utat firm, being at the lime a director of the Bank,) one thousand one hundred and fifty shares of United States Bank stock, in 1838, viz:?On the 2d of August, two hundred and fifty shares, at 123 dollars, tho Bank selling on the same day 120 do'lars, less brokerage: on the 22d of August, five hundred shares, and on tho 231 of August, four hundred shares at 125 dollars, the market price, on those two days being 123 dollars, 25 cents, the bank selling the day after at 123, less brokerage. Settlements of a siinu lar character with debtors for smaller, amounts, were, of frequent recurrence. The first instance in which an officer paid hisdksbt to the bank, in other than money which the con. mittee can find, was in March, 1838, when Mr, Sainucl Jaudon, (then in London as the agent of the bank, (Mr. Joseph Cowperthwaite, (then cashier,) and Mr. John Andrews, (then first assistant cashier,) paid a debt of 269,600 dollars, which they owed the Bank on joint account, in Danville and Pottsvillo Railroad Company, five per cent, loan, ?70,000 Union Canal, 6 per cent, loan, 10,000 Philadelphia and Reading R. R. Co. 1 stock 3590 shares, 179,500 West Feliciana R. R. Co, stock 100 shares, 10,000 ?269,500 i i Of course, the committee cannot say, that the Exl change Committee did or did not authorise or sanction this settlement. The paper which constitute* the only evidence of it, and which the Committee have seen, exhibits no siyn of such authority or approbation, oilier than the initials of Mr. Andrews himself Of the residue of the large debt of Mr. Andrews of 463,104 dollars, 88 cents, which includes his one third proportion of the foregoing sum of 269,500 dollars, all except 32,3X1 dollars, 55 cents, was settled by the transfer of Stocks and JL^ans. [concluded next week.] We reasoned with an inebriate a few days since en the vile habit he had of drinking spirits. "Why," ho said in reply, "water is dangerous, very, danger. ou8?it drowns people; gets in their chests, and into their heads, and then, too, it nukes that infcraul steam, that's always blowing a fellow up," Political matters of fact arc the (bundation or ^rh'oh our civil and natural knowledge is built,