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UNITED STATES' BANK. held by foreigners. By this act the American

MESSAGE

FROM THE PRESIDENT U. S. RETURNING THE BANK BILL TO THE SE

NATE WITH HIS OBJECTIONS.

To the Senate:

republic proposes virtually to make them a present of some millions of dollars. For these gratuities to foreigners, aud 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.

The bill to modify and continue" the act, entitled "an act to incorporate the subscribers Every monopoly, and all exclusive privileges, to the Bank of the United States, "was present are granted at the expense of the public, which ed to me on the 4th July, instant. Having con- ought to receive a fair equaivalent. The many sidered it with that solemn regard to the prin- millions which this act proposes to bestow on the ciples of the Constitution, which the day was stockholders of the existing bank, must come calculated to inspire, and come to the conclu- directly or indirectly out of the earnings of the sion that it ought not to become a law, I here- American people. It is due to them, therefore, with return it to the Senate, in which it origi-if their Government sell monopolies and exnated, with my objections. clusive privileges, that they should at least ex.

A Bank of the United States is, in many re-act for them as much as they are worth in open spects, convenient for the Government, and market. The value of the monopoly, in this useful to the people. Entertaining this opinion, case, may be correctly ascertained. The twenand deeply impressed with the belief that some ty-eight millions of stock would probably be of the powers and privileges possessed by the at an advance of fifty per cent, and command, existing bank, are unauthorized by the Consti in market, at least forty-two millions of dollars, tution, subversive of the rights of the States, subject to the payment of the present loans. and dangerous to the liberties of the people, The present value of the monopoly, therefore, I felt it my duty, at an early period of my ad- is seventeen millions of dollars, and this the ministration, to call the attention of Congress act proposes to sell for three millions, payable to the practicability of organizing an institution in fifteen annual instalments of $200,000 each. 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.

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 seli the 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.

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 But this act does not permit competition in a monopoly of the foreign and domestic ex- the purchase of this monopoly. It seems to change. The powers, privileges, and favors be predicated on the erroneous idea, that the bestowed upon it in the original charter, by present stockholders have a prescriptive right, increasing the value of the stock far above its not only to the favor, but to the bounty of the par value, operated as a gratuity of many mil-Government. It appears that more than a lions to the stockholders. fourth part of the stock is held by foreigners,

An apology may be found for the failure to and the residue is held by a few hundred of our guard against this result, in the consideration citizens, chiefly of the richest class. For their that the effect of the original act of incorpora-benefit does this act exclude the whole Amerition could not be certainly foreseen at the time can people from competition in the purchase of its passage. The act before me proposes of this monopoly, and dispose of it for many another gratuity to the holders of the same millions less than it is worth. This seems the stock, and in many cases to the same men, of less excusable, because some of our citizens, at least seven millions more. This donation net now stockholders, petitioned that the door finds no apology in any uncertainty as to the of competition might be opened, and offered effect of the act. On all hands it is conceded to take a charter on terms much more favorable that its passage will increase, at least twenty to the Government and country. or thirty 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

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 Go vernment 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 cannot 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 or 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 beatings of the act before me upon these points, I find ample reasons why it should not ecome a law.

cumstances, he cannot, by law, pay his debt with those notes, but must sell them at a discount, or send them to St. Louis to be cashed. This boon, conceded to the State banks, though not unjust in itself, is most odious; because it does not measure out equal justice to the high and the low, the rich and the poor. To the es tent of its practical effect, it is a bond of union among the banking establishments of the nation, erecting them into an interest separate from that of the people: and its necessary tendency is to unite the Bank of the United States, and the State banks, in any measure which may be thought conducive to their common interest.

The ninth section of the act recognizes principles of worse tendency than any provision of the present charter.

it has been urged as an argument in favor of rechartering the present bank, that calling It enacts that the cashier of the bank shall in its loans will produce great embarrassment annually report to the Secretary of the Treasu and distress. The time allowed to close its ry the names of all stockholders who are not concers is ample; and if it has been well ma-resident citizens of the United States; and, on naged its pressure will be light, and heavy on the application of the Treasurer of any State, ly in case its management has been bad. If, shall make out, and transmit to such Treasurer, therefore, it shall produce distress, the fault a list of stockholders residing in, or citizens of, will be its own, and it would furnish a reason such State, with the amount owned by each." against renewing a power which has been so Although this provision, taken in connexion obviously abused. But will there ever be a with a decision of the Supreme Court, surren– time when this reason will be less powerful ders, by its silence, the right of the States to To acknowledge its force, is to admit that the tax the banking institutions created by this corbank ought to be perpetual, and, as a conse-poration, under the name of branches, throughquence, the present stockholders and those in-out the Union, it is evidently intended to be heriting their rights as successors be establish- construed as a concession of their right to tax ed, a privileged order, clothed both with great that portion of the stock which may be held by political power, and enjoying immense pecu- their own citizens and residents. In this light, niary advantages, from their connection with if the act becomes a law, it will be understood the Government. by the States, who will probably proceed to levy a tax equal to that paid upon the stock of banks incorporated by themselves. In some States that tax is now one per cent.,either on the capital or on the shares and that may be assumed as the amount which all citizens or resi

The modifications of the existing charter, proposed by this act, are not such, in my view, as make it consistent with the rights of the States, or the liberties of the people. The qualification of the right of the bank to hold real estate, the limitation of its power to estab-dent stockholders would be taxed under the olish branches, and the power reserved to Con- peration of this act. As it is only the stuck held gress to forbid the circulation of small notes, in the States, and not that employed within them, are restrictions, comparatively, of little value which would be subject to taxation, and as the or importance. All the objectionable princi- names of foreign stockholders are not to be reples of the existing corporation, and most of ported to the Treasurers of the States, it is obits odious features, are retained without allevi-vious that the stock held by them will be exempt ation.

The fourth section provides "that the notes or bills of the said corporation, although the same be on the faces thereof respectively made payable at one place only, shall never theless be received by the said corporation at the bank, or at any of the offices of discount and deposite thereof, if tendered in liquidation or payment of any balance or balances due to said corporation, or to such office of discount and deposite from any other incorporated bank."

This provision secures to the State banks a legal privilege in the Bank of the United States, which is withheld from all private citizens. If a State bank in Philadelphia owe the Bank of the United States, and have notes issued by the St. Louis branch, it can pay the debt with those notes; but if a merchant, mechanic, or other private citizen be in like cir

from this burden. Their annual profits will, therefore, be increased one per cent. mo e than the citizen stockholders, and as the annual dividends of the bank may be safely estimated at seven per cent., the stock will be worth ten or fifteen per cent. more to foreigners than to citizens of the United States. To appreciate the effect which this state of things will produce, we must take a brief review of the operations, and present condition of the Bank of the Unite States.

By documents submitted to Congress, at the present session, it appears that on 1st of January, 1832, of the twenty-eight millions of private stock in the corporation, $8,405,500 ere held by foreigners, mostly of Great Britain. The amount of stock held in the nine western States is $140,200, and in the four southern States is $5,623, 100, and in the eastern and middle States about $13,522,000. The profits of the bank in

signing men to secure that control in their own hands by monopolising the remaining stock There is danger that a president and directors would then be able to elect themselves from year to year, and without responsibility or control, manage the whole concerns of the bank during the existence of its charter. It is easy to conceive that great evils to our country and its institutions might flow from such a concentration of power in the hands of a few men irresponsible to the people.

1831, as shown in a statement to Congress, were about $3,455,598; of this there accrued in the nine western States about $1,640,048, in the four southern States about $352,507, and in the middle and eastern States, about $1,463,041 As little stock is held in the west, it is obvious that the debt of the people in that section to the bank is principally a debt to the eastern and foreign stockholders; that the interest they pay up on it, is carried into the eastern States and into Eu rope;and that it is a burden upon their industry, and a drain of their currency, which no country Is there no danger to our liberty and indecan bear without inconvenience, and occasional pendence in a bank that, in its nature, has so distress. To meet this burden, and equalize the little to bind it to our country? The president exchange operations of the bank, the, amount of the bank has told us, that most of the State of specie drawn from those States, through its banks exist by its forbearance. Should its inbranches, within the last two years, as shown by fluence become concentred, as it may under Its official reports, was about $6,000,000. More the operation of such an act as this in the hands than half a million of this amount does not stop of a self-elected directory, whose interests are in the eastern States, but passes on to Europe, identified with those of the foreign stockholder, to pay the dividends to the foreign stockholders. will there not be cause to tremble for the puriIn the principle of taxation recognized by this ty of our elecfions in peace, and for the inde act, the western States find no adequate com- pendence of our country in war? Their powe pensation for this perpetual burden on their er would be great whenever they might choosindustry, and drain upon their currency. The to exert it; but if this monopoly were regularly branch bank at Mobile made, last year, $95,140; renewed every fifteen or twenty years, on terms yet, under the provisions of this act, the State proposed by themselves, they might seldom in of Alabama can raise no revenue from these pro- peace put forth their strength to influence elecfitable operations, because not a share of the tions or control the affairs of the nation. But stock is held by any of her citizens. Mississip- if any private citizen or public functionary pi and Missouri are in the same condition in re- should interpose to curtail its powers, or prelation to the branches at Natches and St. Louis; vent a renewal of its privileges, it cannot be and such, in a greater or less degree, is the con- doubted that he would be made to feel its indition of every western State. The tendency fluence.

of the plan of taxation which this act proposes, Should the stock of the bank principally pass will be to place the whole United States in the into the hands of the subjects of a foreign counsame relation to foreign countries which the try, and we should unfortunately become inwestern States bear to the eastern. When, by volved in a war with that country, what would a tax on resident stockholders, the stock of this be our condition? Of the course which would bank is made worth ten or fifteen per cent. more be pursued by a bank almost wholly owned by to foreigners than to residents, most of it will the subjects of a foreign power, and managed Inevitably leave the country. by those whose interests, if not affections,

Thus will this provision, in its practical ef- would run in the same direction, there can be fect, deprive the eastern as well as the south.no doubt. All its operations within would be ern and western States, of the means of raising in aid of the hostile fleets and armies without: a revenue from the extension of business and controlling our currency, receiving our public the great profits of this institution. It will make moneys, and holding thousands of our citizens the American people debtors to aliens in near-in dependence, it would be more formidable ly the whole amount due to this bank, and send and dangerous than the naval and military powacross the Atlantic from two to five millions of er of the enemy.

specie every year, to pay the bank dividends. If we must have a bank with private stockIn another of its bearings this provision is holders, every consideration of sound policy, fraught with danger. Of the twenty-five di- and every impulse of American feeling, admorectors of this bank, five are chosen by the Go-(nishes that it should be purely American. Its vernment, and twenty by the citizen stockhold stockholders should be composed exclusively ers. From all voice in these elections the fo- of our own citizens, who at least ought to be reign stockholders are excluded by the char-friendly to our government, and willing to supter. In proportion, therefore, as the stock is port it in times of difficulty and danger. So transferred to foreign holders, the extent of abundant is domestic capital, that competition suffrage in the choice of directors is curtailed. in subscribing for the stock of local banks has Already is almost a third of the stock in foreign recently led almost to riots. To a bank excluhands, and not represented in elections. It is sively of American stockholders, possessing the constantly passing out of the country, and this powers and privileges granted by this act, subact will accelerate its departure. The entire scriptions for two hundred millions of dollars oontrol of the institution would necessarily fall could be readily obtained. Instead of sending into the hands of a few citizen stockholders, abroad the stock of the bank, in which the goand the ease with which the object would be vernment must deposite its funds,and on which accomplished, would be a temptation to de-lit must rely to sustain its credit in times of

emergency, it would rather seem to be expe-"to make all laws which shall be necessary and dient to prohibit its sale to aliens, under penal proper for carrying those powers into executy of absolute forfeiture. tion." Having satisfied themselves, that the word It is maintained by the advocates of the bank," necessary," in the constitution, means **needthat its constitutionality, in all its features, ful" "requisite," "essential,” “conducive to," ought to be considered as settled by prece and that "a bank" is a convénient, a useful, dent, and by the decision of the Supreme and essential instrument in the prosecution of Court. To this conclusion I cannot assent. the Government's "fiscal operations," they con. Mere precedent is a dangerous source of autho- clude that, to "use one must be within the disrity, and should not be regarded as deciding cretion of Congress;" and, that, "the act to questions of constitutional power, except incorporate the Bank of the United States, is a where the acquiescence of the people and the law made in pursuance of the constitution." ⚫States can be considered as well-settled. So "But," say they, "where the law is not prohibfar from this being the case on this subject, an ited, and is really calculated to effect any of the argument against the bank might be based on objects entrusted to the Government, to undertake precedent. One Congress, in 1791, decided in here to inquire into the degree of its necessity, favor of a bank; another, in 1811, decided a would be to pass the line which circumscribes the gainst it. One Congress, in 1815, decided judicial department, und to tread on legislative against a bank; another, in 1816, decided in its ground."

favor. Prior to the present Congress, there- The principle, here affirmed, is, that the "de fore, the precedents drawn from that source gree of its necessity," involving all the details were equal. If we resort to the States, the of a banking institution, is a question exclusively expressions of legislative, judicial, and execu- for legi-lative consideration. A bank is constitu tive opinions against the bank have been, pro- tional; but it is the province of the legislature bably, to those in its favor, as four to one.- to determine whether this or that particular There is nothing in precedent, therefore, power, privilege, or exemption, is “necessary which, if its authority were admitted, ought to weigh in favor of the act before me.

and proper" to enable the bank to discharge its duties to the Government, and from their deIf the opinion of the Supreme Court covered cision there is no appeal to the courts of justice. the whole ground of this act, it ought not to Under the decision of the Supreme Court, control the co-ordinate authorities of this go therefore, it is the exclusive province of Convernment. The Congress, the Executive, and gress and the President to decide, whether the the Court, must each for itself be guided by its particular features of this act are necessary own opinion of the Constitution. Each public and proper," in order to enable the bank to officer who takes an oath to support the Consti- perform, conveniently and efficiently, the tution, swears that he will support it as he un-public duties assigned to it as a fiscal agent, and, derstands it, and not as it is understood by therefore, constitutional, or unnecessary and others. It is as much the duty of the House of improper, and, therefore, unconstitutional. Representatives, of the Senate, and of the Pre- Without commenting on the general princisident, to decide upon the constitutionality of ple affirmed by the Supreme Court, let us exany bill or resolution which may be presented amine the details of this act, in accordance with to them for passage or approval, as it is of the the rule of legislative action, which they have Supreme Judges, when it may be brought be laid down. It will be found, that many of the fore them for judicial decision. The opinion powers and privileges conferred on it, cannot of the judges has no more authority over Con- be supposed necessary for the purpose for gress than the opinion of Congress has over the which it is proposed to be created, and are not, judges; and on that point, the President is in- therefore, means necessary to attain the end in dependent of both. The authority of the Su view, and consequently, not justified by the preme Court must not, therefore, be permitted constitution. to control the Congress or the Executive, when The original act of incorporation, section 21, acting in their legislative capacities, but to have enacts, "that no other bank shall be establishonly such influence as the force of their rea- ed by any future law of the United States, dusoning may deserve. ring the continuance of the corporation, bereBut in the case relied upon, the Supreme by created, for which the faith of the United Court have not decided that all the features of States is hereby pledged: Pr wided, Congress this corporation are compatible with the con- may renew existing charters for banks within stitution. It is true, that the court have the District of Columbia, not increasing the said, that the law incorporating the bank, is a capital thereof, and may, also, establish any constitutional exercise of power by Congress. other bank or banks in said District, with capiBut taking into view the whole opinion of the tals not exceeding, in the whole, six millions of court, and the reasoning by which they have dollars, if they shall deem it expedient." This come to that conclusisn, I understand them to provision is continued in force by the act be. have decided that, inasmuch as a bank is an ap-fore me, fifteen years from the 3d of March, propriate means for carrying into effect the 1836.

enumerated powers of the General Government, If Congress possesses the power to establish therefore, the law incorporating it is in accor- one bank, they had power to establish more dance with that provision of the constitution than one, if, in their opinion, two or more which declares that Congress shall have power banks had been "necessary" to facilitate the

execution of the powers delegated to them in ject which comes within the scope of Congres the Constitution. If they possessed the power sional power, there is an ever living discretion to establish a second bank, it was a power de- in the use of proper means, which cannot be rived from the Constitution, to be exercised restricted or abolished without an amendment from time to time, and at any time when the of the constitution. Every act of Congress, interests of the country, or the emergencies of therefore, which attempts, by grants of monothe Government might make it expedient. It polies, or sale of exclusive privileges for a limwas possessed by one Congress as well as anoth-ited time, or a time without limit, to restrict or er, and by all Congresses alike, and alike at extinguish its own discretion in the choice of every session. But the Congress of 1816 have means to execute its delegated powers, is taken it away from their successors for twenty equivalent to a legislative amendment of the years, and the Congress of 1832 proposes to constitution, and palpably unconstitutional. abolish it for fifteen years more. It cannot bel This act authorises and encourages transfers "necessary" on "proper" for Congress to bar- of its stock to foreigners, and grants them an ter away, or divest themselves of, any of the exemption from all State and national taxation. powers vested in them by the Constitution, to So far from being "necessary and proper" that be exercised for the public good. It is not the bank should possess this power, to make it "necessary" to the efficiency of the bank, nor is a safe and efficient agent of the Government it "proper" in relation to themselves and their in its fiscal operations, it is calculated to consuccessors. They may properly use the dis- vert the Bank of the United States into a focretion vested in them, but they may not limit reign bank, to impoverish our people in time the discretion of their successors. This restric- of peace, to disseminate a foreign influence tion on themselves, and grant of a monopoly to through every section of the republic, and in the bank, is therefore unconstitutional. war to endanger our independence.

In another point of view, this provision is a The several States reserved the power at the palpable attempt to amend the Constitution by formation of the constitution, to regulate and an act of legislation. The Constitution declares control titles and transfers of real property, and that "the Congress shall have power" to exer most, if not all of them, have laws disqualify. cise exclusive legislation in all cases whatso-ing aliens from acquiring or holding lands withever, over the District of Columbia. Its con- in their limits. But this act in disregard of the stitutional power, therefore, to establish banks undoubted right of the States to prescribe such in the District of Columbia, and increase their disqualifications, gives to aliens, stockholders capital at will, is unlimited and uncontrollable in this bank, an interest and title, as members by any other power than that which gave au- of the corporation, to all the real property it thority to the Constitution. Yet this act de- may acquire within any of the States of this clares, that Congress shall not increase the ca- Union. This privilege granted to aliens is not pital of existing banks, nor create other banks" necessary" to enable the bank to perform its with capitals exceeding in the whole six mil- public duties, hor in any sense "proper," be lions of dollars. The Constitution declares, cause it is vitally subversive of the rights of the that Congress shall have power to exercise ex- States. clusive legislation over this district "in all cases The Government of the United States have whatsoever," and this act declares they shall no constitutional power to purchase lands withnot. Which is the supreme law of the land in the States except "for the erection of forts, This provision cannot be "necessary" or "pro-magazines, arsenals, dock yards, and other per" or "constitutional," unless the absurdity needful buildings," and even for these objects be admitted, that whenever it be "necessary only "by the consent of the legislature of the and proper" in the opinion of Congress, they State in which the same shall be." By making have a right to barter away one portion of the themselves stockholders in the bank, and grantpowers vested in them by the Constitution as a ing to the corporation the power to purchase means of executing the rest. lands for other purposes, they assume a power On two subjects only does the constitution not granted in the constitution, and grant to recognise in Congress the power to grant ex- others what they do not themselves possess. clusive privileges on monopolies. It declares It is not necessary to the receiving, safe keepthat "Congress shall have power to promote ing, or transmission of the funds of the Governthe progress of science and useful arts, by se- ment, that the bank should possess this power, curing, for limited times, to authors and in- and it is not proper that Congress should thus ventors, the exclusive right to their respective enlarge the powers delegated to them in the writings and discoveries." Out of this express constitution. delegation of power, have grown our laws of The old Bank of the United States possesspatents and copy rights. As the constitution ed a capital of only eleven millions of dollars, expressly delegates to Congress the power to which was found fully sufficient to enable it, grant exclusive privileges in these cases, as the with despatch and safety, to perform all the means of executing the substantive power "to functions required of it by the Government. promote the progress of science and useful The capital of the present bank is thirty-five arts," it is consistent with the fair rules of con struction to conclude, that such a power was not intended to be granted as a means of ac complishing any other end. On every other sub

millions of dollars, at least twenty-four more than experience has proved to be necessary to enable a bank to perform its public functions. The public debt which existed during the pe

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