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the said Corporation to issue, pay out or put in circulation any note or notes of a denomination less than fifty dollars, which shall not upon the faces thereof, respectively, be payable at the Bank or Office of Discount and Deposit whence they shall be issued, paid out or put in circulation. Section 4. And be it further enacted, That the notes or bills of the said corporation, although the same be upon the faces thereof respectively made payable at one place only shall nevertheless be received by the said Corporation at the Bank or at any of the Offices of Discount and Deposit thereof, if tendered in liquidation or payment of any balance or balances due to said Corporation or to such Office of Discount and Deposit from any other incorporated Bank. Section 5. And be it further enacted, That it shall not be lawful after the said third day of March, in the year one thousand eight hundred and thirty six, for the said Corporation to hold, keep and retain for a period exceeding five years after the date of acquiring the same any right, title or interest, except by way of mortgage or judgement lien in security of debts, to any lands, tenements and hereditaments other than those requisite for its accommodation in relation to the convenient transacting of its business; and it shall be the duty of said Corporation, within the aforesaid period of five years to sell, dispose of or otherwise bona fide divest itself of all right title and interest to any lands, tenements and hereditaments conveyed to it in satisfaction of debts previously contracted in the course of its dealings or purchased at sales upon judgements which shall have been obtained for such debts, and for any and every violation of this provision the said Corporation shall be subject to a penalty of ten thousand dollars to be recovered in the name of the United States of America by a qui-tam action of debt instituted in any court of the United States having jurisdiction. of the same; one half of which shall inure to the benefit of the informer and the other half to the use of the United States. Section 6. And be it further enacted, That from and after the said tenth day of April, in the year one thousand eight hundred and thirty six, it shall not be lawful for the Directors of the said Corporation to have, establish or retain more than two Offices of Discount and Deposit in any State: Provided; That nothing herein contained shall prevent the said corporation from retaining any of the Branches which are now established. Section 7. And be it further enacted, That in consideration of the exclusive benefits and privileges continued by this act to the said corporation for fifteen years as aforesaid, the said Corporation shall pay to the United States, the annuity or yearly sum of two hundred thousand dollars, which said sum shall be paid on the fourth day of March, in each and every year during the said term of fifteen years. Section 8. And be it further enacted, That it shall be lawful for Congress to provide by law that the said Bank shall be restrained at any time after the third day of March, in the year one thousand eight hundred and thirty six from making, issuing or keeping in circulation any notes or bills of said Bank or any of its Offices of a less
sum or denomination than twenty dollars. Section 9. And be it further enacted, That the Cashier of the Bank shall annually report to the Secretary of the Treasury the names of all Stockholders, who are not resident citizens of the United States; and on application of the Treasurer of any State shall make out and transmit to such Treasurer a list of Stockholders residing in or citizens of such State with the amount of Stock owned by each. Section 10. And be it further enacted, That so much of any act or acts of Congress heretofore passed and now in force supplementary to or in any wise connected with the said original act of incorporation approved on the tenth day of April, in the year one thousand eight hundred and sixteen as is not inconsistent with this act shall be continued in full force and effect, during the said fifteen years after the said third day of March, in the year, one thousand eight hundred and thirty six. Section 11. And be it further enacted, That it shall be the duty of the President and Directors of the said Bank on or before the first day of the next session of Congress to signify to the President of the United States their acceptance on behalf of the Bank of the United States of the terms and conditions in this act contained and if they shall fail to do so on or before the day above mentioned, that then this act shall cease to be in force.
Speaker of the House of Representatives,
Vice President of the United States
I certify that this act did originate in the Senate.
Veto Message-Andrew Jackson, on Bill To Renew Charter of Bank of United States
Twenty-Second Congress, 1st Session
JULY 10, 1832.
[Source: James D. Richardson, A Compilation of the Messages and Papers of the Presidents, Vol. 2, pp. 1139-1154]
To the Senate:
The bill "to modify and continue" the act entitled "An act to incorporate the subscribers to the Bank of the United States" was presented to me on the 4th July instant. Having considered it with that solemn regard to the principles of the Constitution which the day was calculated to inspire, and come to the conclusion that it ought not to become a law, I herewith return it to the Senate, in which it originated, with my objections.
A bank of the United States is in many respects convenient for the Government and useful to the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the Constitution. subversive of the rights of the States, and dangerous to the liberties of the people, I felt it my duty at an early period of my Administration. to call the attention of Congress to the practicability of organizing an institution combining all its advantages and obviating these objections. I sincerely regret that in the act before me I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the Constitution of our country.
The present corporate body, denominated the president, directors, and company of the Bank of the United States, will have existed at the time this act is intended to take effect twenty years. It enjoys an exclusive privilege of banking under the authority of the General Government, a monopoly of its favor and support, and, as a necessary consequence, almost a monopoly of the foreign and domestic exchange. The powers, privileges, and favors bestowed upon it in the original charter, by increasing the value of the stock far above its par value, operated as a gratuity of many millions to the stockholders.
An apology may be found for the failure to guard against this result in the consideration that the effect of the original act of incorporation could not be certainly foreseen at the time of its passage. The act before me proposes another gratuity to the holders of the same stock, and in many cases to the same men, of at least seven millions more. This donation finds no apology in any uncertainty as to the effect of the act. On all hands it is conceded that its passage will increase at least 20 or 30 per cent more the market price of the stock, subject to the payment of the annuity of $200,000 per year secured by the act, thus adding in a moment one-fourth to its par value. It is not our own citizens only who are to receive the bounty of our Government. More than eight millions of the stock of this bank are held by foreigners. By this act the American Republic proposes virtually to make them a present of some millions of dollars. For these gratuities to foreigners and to some of our own opulent citizens the act secures no equivalent whatever. They are the certain gains of the present stockholders under the operation of this act, after making full allowance for the payment of the bonus.
1 Editor's note: For text of bill see pp. 210-212.
Every monopoly and all exclusive privileges are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people. It is due to them, therefore, if their Government sell monopolies and exclusive privileges, that they should at least exact for them as much as they are worth in open market. The value of the monopoly in this case may be correctly ascertained. The twenty-eight millions of stock would probably be at an advance of 50 per cent, and command in market at least $42,000,000, subject to the payment of the present bonus. The present value of the monopoly, therefore, is $17,000,000, and this the act proposes to sell for three millions, payable in fifteen annual installments of $200,000 each.
It is not conceivable how the present stockholders can have any claim to the special favor of the Government. The present corporation has enjoyed its monopoly during the period stipulated in the original contract. If we must have such a corporation, why should not the Government sell out the whole stock and thus secure to the people the full market value of the privileges granted? Why should not Congress create and sell twenty-eight millions of stock, incorporating the purchasers with all the powers and privileges secured in this act and putting the premium upon the sales into the Treasury?
But this act does not permit competition in the purchase of this monopoly. It seems to be predicated on the erroneous idea that the present stockholders have a prescriptive right not only to the favor but to the bounty of Government. It appears that more than a fourth part of the stock is held by foreigners and the residue is held by a few hundred of our own citizens, chiefly of the richest class. For their benefit does this act exclude the whole American people from competition in the purchase of this monopoly and dispose of it for many millions less than it is worth. This seems the less excusable because some of our citizens not now stockholders petitioned that the door of competition might be opened, and offered to take a charter on terms much more favorable to the Government and country.
But this proposition, although made by men whose aggregate wealth is believed to be equal to all the private stock in the existing bank, has been set aside, and the bounty of our Government is proposed to be again bestowed on the few who have been fortunate enough to secure the stock and at this moment wield the power of the existing institution. I can not perceive the justice or policy of this course. If our Government must sell monopolies, it would seem to be its duty to take nothing less than their full value, and if gratuities must be made once in fifteen or twenty years let them not be bestowed on the subjects of a foreign government nor upon a designated and favored class of men in our own country. It is but justice and good policy, as far as the nature of the case will admit, to confine our favors to our own fellow citizens, and let each in his turn enjoy an opportunity to profit by our bounty. In the bearings of the act before me upon these points I find ample reasons why it should not become a law. It has been urged as an argument in favor of rechartering the present bank that the calling in its loans will produce great embarrassment and distress. The time allowed to close its concerns is ample, and if it has been well managed its pressure will be light, and heavy only in case its management has been bad. If, therefore, it shall