THE National Currency Bureau, or the Office of the Comptroller of the Currency, as it is generally known, was established May 9, 1863, by the appointment and qualification of Hon. Hugh McCulloch as Comptroller, and the selection by him of a working force consisting of three clerks, two copyists and one messenger. The messenger was John Joy Edson, who subsequently became one of Washington's most prominent citizens and business men and was President of two of its principal and most successful financial institutions.
No bureau of the several executive departments of the Federal government has borne a closer or more important relation to the business interests of the country at large than the National Currency Bureau, and no bureau officer is vested by law with greater responsibilities or more independent powers of action than the Comptroller of the Currency.
It evidently was the desire and intention of the framers of the National Bank Act to make the office of the Comptroller a non-political office and to remove it as far as practicable from the influences incident to the quadrennial changes in party or political administration of the Federal government. To this end the term of the Comptroller was fixed by the original and the amendatory acts at five years, and he was required to report annually direct to Congress, instead of to the head of the Treasury Department, as other department bureau officers are required to do.
The purpose of this latter requirement was to enable the Comptroller to present to Congress for consideration his independent views and recommendations in regard to the conditions and necessities of the banking interests and currency needs of the country, free from censorship by his official superior, the head of the Treasury Department.
The impression seems to prevail that the provision in the statute fixing the tenure of office of the Comptroller of the Currency at five years prevented the removal of this official during his term, except by impeachment. Such, however, is not the case.
The Act of February 25, 1863, contained a provision that the Comptroller "shall hold his office for the term of five years, unless sooner removed by the President by and with the advice and consent of the Senate."
When the bill to amend this act was before the Senate for consideration, in April, 1864, it was proposed to amend this section by striking out the words by and with the advice and consent of the Senate and make the provision read, shall hold his office for the term of five years unless sooner removed by the President.
A study of the debate in the Senate on this proposed amendment may prove of interest as showing the intent of the legislators in connection with this provision of law as finally adopted. This debate will be found in the Congressional Globe of April 26, 1864, as follows:
Senator Grimes: I should like to inquire why the committee propose to make this change. I remember that this clause was put in the bill of last year upon great consideration, in order to prevent this officer from being a mere political officer, as he doubtless will be, if he is to be turned out without any consultation with the Senate. I should like to know what change has come over the spirit of the dream of the Finance Committee on that subject.
Senator Fessenden: The reason why that clause was stricken out by the Committee on Finance was simply this:
That provision is in the original bill that we passed last year. It was put into the original bill because it was thought advisable that this office should be in a very particular degree independent of political changes and political considerations. There seemed to be a necessity for a degree of permanency and a degree of independence in this officer that did not apply to others, and it was agreed to. When it came up this year in the same shape the attention of the committee was called to it, and we came to the conclusion that there might be difficulties in such a case even in carrying that out.
In the first place, it is establishing a new rule. It is questionable whether the President has not the power of appointing this officer and removing him, even if this provision should remain in the bill. It has been held in all other cases that the power of removal was a necessary consequence of the power of appointment; that when the President appointed an officer who was provided for by law that was all very well; but he might at any time appoint another in his place, as the power of appointment was vested in him, and that power of appointment necessarily involved the power to remove the incumbent when the President appointed a new officer.
On the contrary, it is said with regard to an office created by Congress, Congress has the right to fix such limitations upon it with reference to the power of removal as it sees fit. That is a doctrine that has never been acceded to herefore. At any rate, this made an exception to all rules, even with regard to military officers. The President has always exercised the power to strike any man from the list of officers in the army if he saw fit to do so, as we have with a view rather to acknowledge that power and to induce its exercise in the present condition of the country, made a special provision of law, I believe, on that subject.
The difficulty in this case is this: If you provide that the Comptroller of the Currency shall only be removed by and with the advice and consent of the Senate, it may happen that in the recess of Congress this officer may be unfaithful. He will wield an immense power in the country over all these banks with this accumulated capital, and he could in the course of a very short time, if he were disposed to do so, produce the most disastrous effects upon the currency of the country by his own motion. It will be difficult to say that the President should not have the power to remove him if he was found to be exercising the power of his office in that way. There is that danger always, and that, perhaps, was the great argument that made the construction of this power what it is; that necessarily, as Congress is not always in session, the President must have the power of removal in order to guard against evils that might follow from unfaithful officers who would otherwise hold their positions contrary to the interests of the government. It is desirable at all times, if this provision is retained, that the President shall have the power to suspend for a time for sufficient cause the powers of the Comptroller of the Currency until the meeting of Congress, and then report to Congress the reasons why he has thus suspended him.
This matter, however, came up this morning in the Committee on Finance, and it was thought advisable on the whole to leave the amendment stand, as we originally reported it, striking out this clause, presuming that the House of Representatives would insist (as it usually does) upon its own views in relation to this important amendment of the bill, and it would result in a committee of conference, when something could be arranged between the two committees that would be effective in relation to it.
For myself, while I see the force of the argument that this office ought to be in a great degree independent, I also see the force of the argument that the power of suspending him should exist in the President, because otherwise during a recess of Congress the great interests of the community might be left to the mercy of the Comptroller of the Currency, if he should happen to be an unfaithful man. We thought the clause, as it stood, might be unsafe in that particular at some future time, and on the whole, we concluded to strike out the clause, thinking that it would result in an arrangement with reference to it that might obviate the difficulties on both sides.
Senator Buckalew: I desire to move an amendment to the amendment of the committee. I move to insert the following words in place of those proposed to be stricken out: "upon reasons to be reported by him to the Senate," so that the clause will read: "And shall hold his office for the term of five years, unless sooner removed by the President, upon reasons to be reported by him to the Senate."
Senator Fessenden: I think that would hardly meet the difficulty, because it makes his reasons conclusive whether the Senate likes them or not. It leaves the power of removal just exactly where it should be, if this clause should be stricken out altogether, only the President is compelled to report his reasons to the Senate. If the reasons are satisfactory to himself they are to operate. They might not be satisfactory to the Senate, but still that would produce no effect upon the act itself. I think, therefore, that the amendment to the amendment would not cure the evil.
Senator Pomeroy: The effect of it would be that if the Senate did not approve of the reasons given by the President they could refuse to confirm the successor appointed to the previous Comptroller.
Senator Fessenden: That would only make confusion. It is necessary that the office should be filled.
Senator Howard: I hope the Senate will concur in the amendment of the committee conditionally, for I regard it as a well settled law that under the Constitution of the United States the President has the absolute power of appointment and the equally absolute power of removal. I am not able to see what authority we have to annex any conditions or limitations to the President's power of removal from office. If he has the power of appointment, and if the power of removal is an incident to the power of appointment, then we have nothing to do with it, and we can only leave the responsibility to the President himself. Suppose we should adopt the amendment suggested by the Senator from Pennsylvania, and the President should see fit to remove this officer without giving to Congress any reasons whatever, what would be the result in law? Would he, or would he not be actually removed? Would he remain in office because the Persident had not given reasons for his removal, or what would be his condition? I should really bike to understand from the honorable Senator from Pennsylvania what would be the logical consequences. I think that the reasons given by the honorable Chairman of the Committee on Finance for the amendment which that Committee has suggested, are perfectly satisfactory and perfectly conclusive. Let us leave to the President his full responsibility for exercising the laws and hold him to that responsibility before the people.
The bill passed the Senate and was referred to a conference committee of the two Houses, and finally became a law with the provision in regard to the tenure of office of the Comptroller, reading as follows:
Shall hold his office for the term of five years, unless sooner removed by the President, upon reasons to be communicated by him to the Senate.
This provision of law has remained the same to the present time, and although the Comptroller is appointed for a term of five years, he virtually holds his office at the pleasure of the President, and may be removed at any time, for reasons which the President may deem sufficient.