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General state of the Bank of the United States, and its Branches
Balance of outstanding drafts on bank and branches----
Undivided surplus, applicable to last dividend, and to cover losses on buildings and debts----
$24, 183, 046. 54
Report of Secretary of Treasury (Albert Gallatin), on Renewal of Charter of Bank of United States
COMMUNICATED TO THE SENATE, FEBRUARY 5, 1811.
Eleventh Congress, 3d Session
[Source: American State Papers, Finance, Vol. 2, p. 481] TREASURY DEPARTMENT, January 30, 1811.
Have 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 United 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 United 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 moneys. 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 moneys are safer 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 moneys collected at New Orleans, and deposited there in its branch-a security which will be lost under a different arrangement. Nor will the United States 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 deposites; 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 United 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 moneys, the use of a State bank may be forbidden by the State; and that loans to the United 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 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 ex
tended, 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 modifications which may be thought expedient may be introduced, without interrupting the operations of the institution now in force, 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 moneyed 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 efficiency 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. WILLIAM H. CRAWFORD, Chairman in Senate.
Report of Senate Committee, on Renewal of Charter of Bank of United States
COMMUNICATED TO THE SENATE, MARCH 2, 1811.
Eleventh Congress, 3d Session
[Source: American State Papers, Finance, Vol. 2, pp. 486–487]
Mr. CLAY, from the committee to whom was referred the memorial of the stockholders of the Bank of the United States, praying that an act of Congress might be passed, to continue the corporate powers of the Bank, for a further period, to enable it to settle such of its concerns as may be depending on the 3d of March, 1811, respectfully offered, for the consideration of the Senate, the following report:
That your committee have duly weighed the contents of the memorial, and deliberately attended to such explanations of the views of the memorialists, as they have thought proper to present through their agents. That, holding the opinion (as a majority of the committee do) that the constitution did not authorize Congress originally to grant the charter, it follows, as a necessary consequence of that opinion, that an extension of it, even under the restrictions contemplated by the stockholders, is equally repugnant to the constitution. But, if it were possible to surmount this fundamental objection, and if that rule which forbids, during the same session of the Senate, the re-agitation of a proposition once decided, were disregarded, your committee would still be at a loss to find any sufficient reasons for prolonging the political existence of the corporation, for the purpose of winding up its affairs. For,
As it respects the body itself, it is believed that the existing laws, through the instrumentality of a trust properly constituted, afford as ample means as a qualified continuance of the charter would, for the liquidation of its accounts, and the collection and final distribution of its funds. But, should any inconvenience be experienced on this subject, the committee are persuaded it will be very partial, and such as the State authorities, upon proper application, would not fail to provide a competent remedy for. And,
In relation to the community, if the corporation, stripped of its banking powers, were to fulfill bona fide the duty of closing its affairs, your committee cannot see that any material advantage would be derived. Whilst, on the contrary, if it should not so act, but should avail itself of this temporary prolongation, in order to effect a more durable extension of its charter, it might, in its operations, become a serious Scourge.
Your committee are happy to say, that they learn, from a satisfactory source, that the apprehensions which were indulged, as to the distress resulting from a non-renewal of the charter, are far from being realised in Philadelphia, to which their information has been con
fined. It was long since obvious, that the vacuum, in the circulation of the country, which was to be produced by the withdrawal of the paper of the Bank of the United States, would be filled by paper issuing from other banks. This operation is now actually going on; the paper of the Bank of the United States is rapidly returning, and that of other banks is taking its place. Their ability to enlarge their accommodations is proportionately enhanced; and when it shall be further increased by a removal, into their vaults, of those deposites, which are in possession of the Bank of the United States, the injurious effects of a dissolution of the corporation will be found to consist in an accelerated disclosure of the actual condition of those, who have been supported by the credit of others, but whose insolvent, or tottering situation, known to the Bank, has been concealed from the public at large.
Your committee beg leave to present the following resolution: Resolved, That the prayer of the memorialists ought not to be granted.
Report of House Committee, on Renewal of Charter of Bank of United States
COMMUNICATED TO THE HOUSE OF REPRESENTATIVES, MARCH 2, 1811. Eleventh Congress, 3d Session
[Source: American State Papers, Finance, Vol. 2, p. 487]
Mr. P. B. PORTER, from the committee to whom was referred the memorial of the stockholders of the Bank of the United States, made the following report:
That they have carefully examined the various matters set forth in the said memorial, and attentively listened to the representations of the gentlemen who have appeared in behalf of the said petitioners. The object of the memorialists is to obtain an extension of their corporate powers, beyond the period limited for the expiration of their charter, so as to enable them to prosecute for their debts, and to arrange, liquidate, and close, the various concerns of the company. The committee are of opinion that a law of Congress, granting the powers prayed for, would facilitate the final adjustment of the affairs of the bank, although they do not think such a law indispensable to that object. But, believing, as your committee do, that, în granting the original charter to the stockholders, Congress transcended the legitimate powers of the constitution, the same objection now presents itself to the extension of any of their corporate capacities.
If the committee had time to go into the investigation, and to present to the House the various reasons which have conduced to this opinion, it would be more than useless, to divert its attention from the important concerns of the nation, at this late period of the session, to a subject which, but a few days since, was so fully and elaborately discussed. They, therefore, beg leave to recommend the following resolution:
Resolved, That the prayer of the memorialists ought not to be granted.