SEC. 14. And be it further enacted, That it shall at all times be lawful for a committee of either House of Congress, appointed for that purpose, to inspect the books, and to examine into the proceedings, of the corporation hereby created, and to report whether the provisions of this charter have been by the same violated or not; and whenever any committee as aforesaid, shall find and report, or the President of the United States shall have reason to believe, that the charter has been violated, it may be lawful for Congress to direct, or the President to order, a scire facias to be sued out of the circuit court of the district of Pennsylvania, in the name of the United States, (which shall be executed upon the president of the corporation, for the time being, at least fifteen days before the commencement of the term of said court,) calling on the said corporation to show cause wherefore the charter hereby granted shall not be declared forfeited; and it shall be lawful for the said court, upon the return of the said scire facias, to examine into the truth of the alleged violation; and if such violation be made appear, then to pronounce and adjudge, that the said charter is forfeited and annulled: Provided, however, Every issue of fact which may be joined between the United States and the corporation aforesaid, shall be tried by jury. And it shall be lawful for the court aforesaid, to require the production of such of the books of the corporation as it may deem necessary for the ascertainment of the controverted facts; and the final judgment of the court aforesaid, shall be examinable in the supreme court of the United States, by writ of error, and may be there reversed or affirmed, according to the usages of law.

SEO. 15. And be it further enacted, That, during the continuance of this act, and whenever required by the Secretary of the Treasury, the said corporation shall do and perform the several and respective duties of the Commissioners of Loans, for the several States, or of any one or more of them, at the times, in the manner, and upon the terms, to be prescribed by the Secretary of the Treasury.

SEC. 16. And be it further enacted, That no other bank shall be established by any future law of the United States, during the continuance of the corporation hereby created; for which the faith of the United States is hereby pledged: Provided, Congress may renew existing charters for banks in the District of Columbia, not increasing the capital thereof; and may grant charters, if they deem it expedient, to any banking associations now in operation, in the said District, and renew the same, not increasing the capital thereof. And notwithstanding the expiration of the term for which the corporation is created, it shall be lawful to use the corporate name, style, and capacity, for the purpose of suits, for the final settlement and liquidation of the affairs and accounts of the corporation, and for the sale and disposition of their estate, real, personal, and mixed, but not for any other purpose, or in any other manner whatsoever: nor for a period exceeding two years, after the expiration of the said term of incorporation.

LANGDON CHEVES, Speaker of the House of Representatives. JOHN GAILLARD, President of the Senate, pro tempore.

Seventh Annual Message-James Madison

Fourteenth Congress, 1st Session

DECEMBER 5, 1815.

[Source: James D. Richardson, A Compilation of the Messages and Papers of the Presidents, Vol. 1, pp. 550-551]

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The arrangements of the finances with a view to the receipts and expenditures of a permanent peace establishment will necessarily enter into the deliberations of Congress during the present session. It is true that the improved condition of the public revenue will not only afford the means of maintaining the faith of the Government with its creditors inviolate, and of prosecuting successfully the measures of the most liberal policy, but will also justify an immediate alleviation of the burdens imposed by the necessities of the war. It is, however, essential to every modification of the finances that the benefits of an uniform national currency should be restored to the community. The absence of the precious metals will, it is believed, be a temporary evil, but until they can again be rendered the general medium of exchange it devolves on the wisdom of Congress to provide a substitute which shall equally engage the confidence and accommodate the wants of the citizens throughout the Union. If the operation of the State banks can not produce this result, the probable operation of a national bank will merit consideration; and if neither of these expedients be deemed effectual it may become necessary to ascertain the terms upon which the notes of the Government (no longer required as an instrument of credit) shall be issued upon motives of general policy as a common medium of circulation.

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Annual Report, Secretary of Treasury (Alexander J. Dallas)

Fourteenth Congress, 1st Session


[Source: American State Papers, Finance, Vol. 3, pp. 17-19]

3. Proposition relating to the national circulating medium.

The delicacy of this subject is only equalled by its importance. In presenting it, therefore, to the consideration of Congress, there is occasion for an implicit reliance upon the legislative indulgence.

By the constitution of the United States Congress is expressly vested with the power to coin money, to regulate the value of the domestic and foreign coins in circulation, and, as a necessary implication from positive provisions, to emit bills of credit, while it is declared by the same instrument that "no State shall coin money, or emit bills of credit." Under this constitutional authority the money of the United States has been established, by law, consisting of coins made with gold, silver, or copper. All foreign gold and silver coins, at specified rates, were placed, in the first instance, upon the same footing with the coins

of the United States, but they ceased (with the exception of Spanish milled dollars, and parts of such dollars) to be a legal tender for the payment of debts and demands, in the year 1809.

The constitutional authority to emit bills of credit has also been exercised in a qualified and limited manner. During the existence of the Bank of the United States the bills or notes of the corporation were declared, by law, to be receivable in all payments to the United States; and the Treasury notes, which have been since issued for the services of the late war, have been endowed with the same quality. But Congress has never recognised, by law, the notes of any other corporation; nor has it ever authorized an issue of bills of credit to serve as a legal currency. The acceptance of the notes of banks, which are not established by the federal authority, in payments to the United States, has been properly left to the vigilance and discretion of the Executive department; while the circulation of the Treasury notes, employed either to borrow money, or to discharge debts, depends entirely (as it ought to depend) upon the option of the lenders and creditors to receive them.

The constitutional and legal foundation of the monetary system of the United States is thus distinctly seen, and the power of the federal Government to institute and regulate it, whether the circulating medium consist of coin or of bills of credit, must, in its general policy, as well as in the terms of its investment, be deemed an exclusive power. It is true that a system depending upon the agency of the precious metals will be affected by the various circumstances which diminish their quantity, or deteriorate their quality. The coin of a State sometimes vanishes under the influence of political alarms; sometimes in consequence of the explosion of mercantile speculations, and sometimes by the drain of an unfavorable course of trade. But whenever the emergency occurs that demands a change of system it seems necessarily to follow that the authority, which was alone competent to establish the national coin, is alone competent to create a national substitute. It has happened, however, that the coin of the United States has ceased to be the circulating medium of exchange, and that no substitute has hitherto been provided by the national authority. During the last year the principal banks, established south and west of New England, resolved that they would no longer issue coin in payment of their notes, or of the drafts of their customers, for money received upon deposite. In this act the Government of the United States had no participation, and yet the immediate effect of the act was to supersede the only legal currency of the nation. By this act, although no State can constitutionally emit bills of credit, corporations, erected by the several States, have been enabled to circulate a paper medium, subject to many of the practical inconveniences of the prohibited bills of credit.

It is not intended, upon this occasion, to condemn, generally, the suspension of specie payments; for appearances indicated an approaching crisis, which would probably have imposed it as a measure of necessity, if it had not been adopted as a measure of precaution. But the danger which originally induced, and perhaps justified, the conduct of the banks, has passed away, and the continuance of the suspension of specie payments must be ascribed to a new series of causes. The public credit and resources are no longer impaired by

the doubts and agitations excited during the war by the practises of an enemy, or by the inroads of an illicit commerce: yet the resumption of specie payments is still prevented, either by the reduced state of the national stock of the precious metals, or by the apprehension of a further reduction to meet the balances of foreign trade, or by the redundant issues of bank paper. The probable direction and duration of these latter causes constitute, therefore, the existing subject for deliberation. While they continue to operate, singly or combined, the authority of the States individually, or the agency of the State institutions, cannot afford a remedy commensurate with the evil; and a recurrence to the national authority is indispensable for the restoration of a national currency.

In the selection of the means for the accomplishment of this important object, it may be asked, 1st. Whether it be practicable to renew the circulation of the gold and silver coins? 2d. Whether the State banks can be successfully employed to furnish a uniform currency? 3dly. Whether a national bank can be employed more advantageously than the State banks for the same purpose? and, 4thly. Whether the Government can itself supply, and maintain a paper medium of exchange, of permanent and uniform value, throughout the United States?

1. As the United States do not possess mines of gold or silver the supply of those metals must, in a time of scarcity, be derived from foreign commerce. If the balance of foreign commerce be unfavorable the supply will not be obtained incidentally, as in the case of the returns for a surplus of American exports, but must be the subject of a direct purchase. The purchase of bullion is, however, a common operation of commerce, and depends, like other operations, upon the inducements to import the article.

The inducements to import bullion arise, as in other cases, from its being cheap abroad, or from its being dear at home. Notwithstanding the commotions in South America, as well as in Europe, there is no reason to believe that the quantity of the precious metals is now (more than at any former period) insufficient for the demand throughout the commercial and civilized world. The price may be higher in some countries than in others; and it may be different in the same country, at different times; but, generally, the European stock of gold and silver has been abundant, even during the protracted war, which has afflicted the nations of Europe.

The purchase of bullion in foreign markets, upon reasonable terms, is, then, deemed practicable; nor can its importation into the United States fail eventually to be profitable. The actual price of gold and silver in the American market would in itself afford, for some time, an ample premium, although the fall in the price must, of course, be proportionate to the increase of the quantity. But it is within the scope of a wise policy to create additional demands for coin, and, in that way, to multiply the inducements to import and retain the metals of which it is composed. For instance, the excessive issue of bank paper has usurped the place of the national money; and, under such circumstances, gold and silver will always continue to be treated as an article of merchandise; but it is hoped that the issue of bank paper will be soon reduced to its just share in the circulating medium of the country; and, consequently, that the coin of the United States will resume its

legitimate capacity and character. Again, the Treasury, yielding, from necessity, to the general impulse, has hitherto consented to receive bank paper in the payment of duties and taxes; but the period approaches when it will probably become a duty to exact the payment either in Treasury notes, or in gold or silver coin, the lawful money of the United States. Again, the institutions which shall be deemed proper, in order to remove existing inconveniences, and to restore the national currency, may be so organized, as to engage the interest and enterprise of individuals in providing the means to establish them. And, finally, such regulations may be imposed upon the exportation of gold and silver, as will serve in future to fix and retain the quantity required for domestic uses.

But it is further believed that the national stock of the precious metals is not so reduced, as to render the operation of reinstating their agency in the national currency either difficult or protracted. The quantity actually possessed by the country is considerable; and the resuscitation of the public confidence in bank paper, or in other substitutes for coin, seems alone to be wanting to render it equal to the accustomed contribution for a circulating medium. In other countries, as well as in the United States, the effect of an excessive issue of paper money, to banish the precious metals, has been seen; and, under circumstances much more disadvantageous than the present, the effect of publie confidence in national institutions, to recall the precious metals to their uses in exchange, has also been experienced.

Even, however, if it were practicable, it has sometimes been questioned whether it would be politic again to employ gold and silver for the purposes of a national currency. It was long and universally supposed that, to maintain a paper medium without depreciation, the certainty of being able to convert it into coin was indispensable; nor can the experiment which has given rise to a contrary doctrine be deemed complete or conclusive. But whatever may be the issue of that experiment elsewhere, a difference in the structure of the Government, in the physical, as well as the political, situation of the country, and in the various departments of industry, seem to deprive it of any important influence, as a precedent for the imitation of the United States.

In offering these general remarks to the consideration of Congress it is not intended to convey an opinion that the circulation of the gold and silver coins can at once be renewed. Upon motives of public convenience the gradual attainment of that object is alone contemplated; but a strong, though respect ful, solicitude is felt that the measures adopted by the Legislature should invariably tend to its attainment. 2d. Of the services rendered to the Government by some of the State banks during the late war, and of the liberality by which some of them are actuated in their intercourse with the Treasury, justice requires an explicit acknowledgment. It is a fact, however, incontestably proved, that those institutions cannot, at this time, be successfully employed to furnish a uniform national currency. The failure of one attempt to associate them with that view has already been stated. Another attempt, by their agency in circulating Treasury notes, to overcome the inequalities of the exchange, has only been partially successful. And a plan recently proposed, with the design to curtail the issues of bank notes, to fix the public confidence in the administration of the affairs of the banks, and to give to each bank a legitimate

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